Does it make sense for a 60 yr old to buy?

[chukdotcom]

But it's not a median estimate, it is best case scenario or close to it, everything else is on the negative side, it really can't work out much or any better long term. It very well may work out OK but there are a lot of areas of risk that could affect these assumptions and they are all to the negative. There really is very little that can happen that would make things work out better than this assumption hence the best case scenario. Many timeshares went from a modest value to you can't give them away or have to pay to do so a few years ago, to think that couldn't happen to DVC is being unrealistic. At the end of the day you're pinning your hopes on Disney, the local economy for Orlando and the national economy; any one of which could get you.

This is incorrect. What about people that bought DVC 10-15 years ago as resales? Are they down more than 50%? To call this even close to "a best case scenario" is just plain wrong. Having said that, there is no guarantee what will happen. There is nothing stopping the "worst case scenario" from happening. I am not making any prediction as to what will actually occur, but you are confused on what constitutes a "best case scenario". This is an "average" scenario. It COULD be much better or much worse. There is no doubt about that.

 

[jekjones1558]

Thanks for all the insight and suggestions. I think I will try to rent points at one of the resorts and then make the decision if it is something we want to invest in. It is nice to stay on property for the convenience of the transportation as well as the extra hours. I have rented timeshares in the past off property, and they were not in good shape, so I was thinking that the DVC timeshares would be better cared for.

This sounds like a great plan, OP. You will make a wise decision that fits your family, I am sure.
As you can tell by the replies, there are some DVCers for whom the financial costs of DVC are very important. For others not so much. We own 1150 points and so have considerable money tied up in buy-in and annual dues. We are not wealthy. We live very simple lives, have no debt and DVC is our luxury. If we are unable to get a single penny for our points on resale, I will have no regrets. We have enjoyed and continue to enjoy so much our time with family and friends at Disney. As DH's health has changed (he is 80), we find that WDW offers familiarity and wonderful accommodations for those with disabilities. We do parks less and enjoy the resorts so much. And it is hard to overstate how much our family values the memories we have of our big family trips.
Good luck with your decision!

 

[Dean]

This is incorrect. What about people that bought DVC 10-15 years ago as resales? Are they down more than 50%? To call this even close to "a best case scenario" is just plain wrong. Having said that, there is no guarantee what will happen. There is nothing stopping the "worst case scenario" from happening. I am not making any prediction as to what will actually occur, but you are confused on what constitutes a "best case scenario". This is an "average" scenario. It COULD be much better or much worse. There is no doubt about that.

We're talking now going forward, not past experiences though. Remember that those members also have points that are not restricted but now they are and some received free passes but no longer do. Also remember we're in a relative high time right now and prices seem to be edging back down. Also as the RTU comes closer to an end, other costs and just the aggravation factor take some people out of the market and tend to put further downward pressure on timeshares. Even for 50% after inflation and dues adjustment you've got to have NO major changes. No dramatic alteration to resale restrictions, no regional or national economic factors and a steady low marching of the relatively low fee escalation. I don't think anyone can make the argument that DVC RETAIL prices have been steady during the last 10-15 years or that expect nearly as much total or % increase as we've seen. As a % of retail, the numbers don't look nearly as favorable. My thoughts remains unchanged, this view is the ceiling or close to it and there is a LOT of downside risk. There is essentially zero chance it could be much better at that cutoff. What do I think will happen, I think it'll be modestly worse than half adjusted for variables in 15 years for 2042 resorts but what I think (and hope) will happen is a far cry from a realistic risk appraisal because it means there are no major variables during the time frame in question.

 

[chukdotcom]

We're talking now going forward, not past experiences though. Remember that those members also have points that are not restricted but now they are and some received free passes but no longer do. Also remember we're in a relative high time right now and prices seem to be edging back down. Also as the RTU comes closer to an end, other costs and just the aggravation factor take some people out of the market and tend to put further downward pressure on timeshares. Even for 50% after inflation and dues adjustment you've got to have NO major changes. No dramatic alteration to resale restrictions, no regional or national economic factors and a steady low marching of the relatively low fee escalation. I don't think anyone can make the argument that DVC RETAIL prices have been steady during the last 10-15 years or that expect nearly as much total or % increase as we've seen. As a % of retail, the numbers don't look nearly as favorable. My thoughts remains unchanged, this view is the ceiling or close to it and there is a LOT of downside risk. There is essentially zero chance it could be much better at that cutoff. What do I think will happen, I think it'll be modestly worse than half adjusted for variables in 15 years for 2042 resorts but what I think (and hope) will happen is a far cry from a realistic risk appraisal because it means there are no major variables during the time frame in question.

Irrelevant. Again, just as there is "risk" to the downside, there is "risk" to the upside. Look at people who bought 3 years ago. The economy was poor and then improved. You need to look at both sides of the trade. If you are a seller, you are taking the "risk" that the economy will improve, disney will keep MF the same, disney will raise their own prices, etc. As a buyer, you are taking the opposite risk. Anyone buying today has those exact same risk factors. Anyone buying in 15 years will too. Unless you have a crystal ball, there is no way to predict what will actually happen. But I assure you that dropping 50% in 50% of the time is not the "best case".

If you are arguing that prices are too high now, that is completely different and has nothing to do with the depreciation.

 

[a742246]

Thanks for all the insight and suggestions. I think I will try to rent points at one of the resorts and then make the decision if it is something we want to invest in. It is nice to stay on property for the convenience of the transportation as well as the extra hours. I have rented timeshares in the past off property, and they were not in good shape, so I was thinking that the DVC timeshares would be better cared for.

That is a good decision. I am around your age, I believe renting points in the epcot resorts area may be your most enjoyable experience. So if you have an option I would try there first.

 

[G'sMaman]

Have you considered buying a small contract and then getting points transferred in as needed? We used to have contracts at 5 different DVC resorts and sold off 2 of them so that we could do just that. It's been easy to find large point transfers and we get to try different resorts with the 11 month booking advantage. I get the points for the following use year and that way they "last" longer since you only get one transfer in/out per year. You can bank them as needed. If you back out what you would have paid for maintenance fees, the points end up costing between $6 - $8 a point, with no upfront cost of a large purchase to you. You also have the perks/discounts as a member with your small contract and complete control over your points once they've been transferred to your account. If you ever have to sell, the small contracts seem to retain the best value and don't sit for long.

 

[jekjones1558]

Have you considered buying a small contract and then getting points transferred in as needed? We used to have contracts at 5 different DVC resorts and sold off 2 of them so that we could do just that. It's been easy to find large point transfers and we get to try different resorts with the 11 month booking advantage. I get the points for the following use year and that way they "last" longer since you only get one transfer in/out per year. You can borrow them or bank them as needed. If you back out what you would have paid for maintenance fees, the points end up costing between $6 - $8 a point, with no upfront cost of a large purchase to you. You also have the perks/discounts as a member with your small contract and complete control over your points once they've been transferred to your account. If you ever have to sell, the small contracts seem to retain the best value and don't sit for long.

This is a another good alternative BUT transferred points CAN NOT be borrowed. They CAN be banked but not borrowed.

 

[G'sMaman]

This is a another good alternative BUT transferred points CAN NOT be borrowed. They CAN be banked but not borrowed.

Thanks for the clarification!

 

[Dean]

Irrelevant. Again, just as there is "risk" to the downside, there is "risk" to the upside. Look at people who bought 3 years ago. The economy was poor and then improved. You need to look at both sides of the trade. If you are a seller, you are taking the "risk" that the economy will improve, disney will keep MF the same, disney will raise their own prices, etc. As a buyer, you are taking the opposite risk. Anyone buying today has those exact same risk factors. Anyone buying in 15 years will too. Unless you have a crystal ball, there is no way to predict what will actually happen. But I assure you that dropping 50% in 50% of the time is not the "best case".

If you are arguing that prices are too high now, that is completely different and has nothing to do with the depreciation.

The current price affects future outcomes. One who holds that opinion should invest in as many points as you can with the intent of reselling them.

 

[chukdotcom]

The current price affects future outcomes. One who holds that opinion should invest in as many points as you can with the intent of reselling them.

But the current price does not affect the future price. If the contract is going to be worth 7.5k in 15 years, it will be if you paid 15k or 20k.

 

[Dean]

But the current price does not affect the future price. If the contract is going to be worth 7.5k in 15 years, it will be if you paid 15k or 20k.

I do think current resale prices roughly reflect where the market is currently though they are high IMO the last year or so. I think the prices from 2-3 years ago is more indicative of the true underlying value of the contracts. However, what you pay does determine what your return or loss is and that was my point. To add, even when you consider that those of us who bought in the timeframe (I'm at 20 yrs total, 13 with my current oldest contract) and could sell at or just above what we bought for, we'd still be far closer to my prediction when you consider 4% compounded inflation, actual sale price and the sales commission. And I don't see any way of that happening going forward. We only have another 15 years to wait to see which of us is closer the correct. Have a great rest of the weekend.

 

[dcfromva]

I've been contemplating buying a re-sale. I will be 60 years old this year and my hubby is 57. We do not have children. We do a week vacation at DW every other year, but would come every year if we could afford to stay on property. I might add that we are eligible to stay at the military Shades of Green, but we would really like having a kitchen (saves on eating out). I could see us getting about 10 or 15 years out of owning. What would you do?

In some ways I think a resale that expires in 2042 would have some advantages in this scenario.
I don't know how much the residual value would be in 10 or 15 years (for the resorts that expire in 2042), but it would be safer to assume 0 in your calculations. Also, there is a liability in that if you were not able to sell your contract at the 15 year point (and you didn't want to go to WDW anymore) you would still have to pay for the dues and manage the contract (possibly rent the points?).
A unit with a kitchen is going to cost you more--you would need at least a 1 BR unit in order to have a kitchen. Is there a particular time of the year that you would plan to go? There is a wide variance in the amount of points you will need based on when you plan to go.
I think it is a great idea to rent points before you decide to buy. I think G'sMaman's suggestion of purchasing a small contract and transferring points in as needed is also a great idea. It allows you to rent points, but also control your reservations. There is a lot to think about.

 

[chukdotcom]

I do think current resale prices roughly reflect where the market is currently though they are high IMO the last year or so. I think the prices from 2-3 years ago is more indicative of the true underlying value of the contracts. However, what you pay does determine what your return or loss is and that was my point. To add, even when you consider that those of us who bought in the timeframe (I'm at 20 yrs total, 13 with my current oldest contract) and could sell at or just above what we bought for, we'd still be far closer to my prediction when you consider 4% compounded inflation, actual sale price and the sales commission. And I don't see any way of that happening going forward. We only have another 15 years to wait to see which of us is closer the correct. Have a great rest of the weekend.

So basically it seems that you think prices are too high now. I can agree with that. And for the record, I'm not predicting that these are actually going to be worth 50% in 15 years. That is simply the mathematical expectation. One can say the stock market goes up 8% on average, but can still be expecting it to drop 25% one year.

 

[Dean]

So basically it seems that you think prices are too high now. I can agree with that. And for the record, I'm not predicting that these are actually going to be worth 50% in 15 years. That is simply the mathematical expectation. One can say the stock market goes up 8% on average, but can still be expecting it to drop 25% one year.

As it pertains to our discussion, I think prices are artificially high right now, that there are a lot of BIG but unlikely risks with DVC, and that if you can get half in 15 years adjusted for inflation (basically where those are from 15 yrs ago that bought resale anyway) count yourself very lucky. And the best part, we can have this discussion several more times over the next few years.

 

[Daisy54]

This sounds like a great plan, OP. You will make a wise decision that fits your family, I am sure.
As you can tell by the replies, there are some DVCers for whom the financial costs of DVC are very important. For others not so much. We own 1150 points and so have considerable money tied up in buy-in and annual dues. We are not wealthy. We live very simple lives, have no debt and DVC is our luxury. If we are unable to get a single penny for our points on resale, I will have no regrets. We have enjoyed and continue to enjoy so much our time with family and friends at Disney. As DH's health has changed (he is 80), we find that WDW offers familiarity and wonderful accommodations for those with disabilities. We do parks less and enjoy the resorts so much. And it is hard to overstate how much our family values the memories we have of our big family trips.
Good luck with your decision!

I agree, there have been a lot of posts about the +/- of the investment. We do not have children, never have, so this would be for us. We like to visit during non-school vacation times (Sept/Oct/Nov & mid Jan) We are not wealthy either and live within our means. Vacations at WDW are our one luxury. I'm not concerned with making money when the time comes to sell. I'm looking at it as pre-paying for our WDW vacations.

One other question - do points retain their value? I.E. will 160 points get you the same room in 5 years?

 

[Dean]

One other question - do points retain their value? I.E. will 160 points get you the same room in 5 years?

The total points for a given option won't change other than they can reallocated within that resort so that the total points for the resort for a year go unchanged. They can increase points for future resorts so you could be priced out in that way. I'd discourage against buying exactly the number of points you need simply because if you have 100 and it changes to 104 yearly, it may affect your usage. This is more important for those trying to cut it close than those looking at averages, esp for those looking for smaller units and/or specialty units during low demand times.

BTW, if all you got out of that discussion was it was about the investment potential or lack of, then you missed my two main points, that of the risks involved (both personal and the system) along with the fact there are other ways to enjoy DVC without owning.

 

[jekjones1558]

One other question - do points retain their value? I.E. will 160 points get you the same room in 5 years?

Sort of. There have been a couple of adjustments over the years in the number of points needed to book a particular room. But the rule is that the total number of points for a resort cannot change. So if Disney deems that, for example, BW view rooms need to be a few more points then another category would need to be a few less. Or if Disney thinks that weekend point costs for rooms are a little too high and should be lowered then weekday costs would need to go up a bit. Some DVCers who had counted on the really low cost weekday rooms a few years ago were upset when the point costs shifted a little and their points would not stretch far enough. My advice would be to buy a few more than you think you will use each year to provide a cushion. You can always bank extras and, if you ever had way too many, you could rent them out.

 

[Daisy54]

The total points for a given option won't change other than they can reallocated within that resort so that the total points for the resort for a year go unchanged. They can increase points for future resorts so you could be priced out in that way. I'd discourage against buying exactly the number of points you need simply because if you have 100 and it changes to 104 yearly, it may affect your usage. This is more important for those trying to cut it close than those looking at averages, esp for those looking for smaller units and/or specialty units during low demand times.

BTW, if all you got out of that discussion was it was about the investment potential or lack of, then you missed my two main points, that of the risks involved (both personal and the system) along with the fact there are other ways to enjoy DVC without owning.

Thanks for your reply. No, investment or lack of is not all I got out of the posts. To me, investment = risk.

 

[Dean]

Thanks for your reply. No, investment or lack of is not all I got out of the posts. To me, investment = risk.

Enjoy your quest and DVC if you end up proceeding with buying it, it really is a great system for those who can plan ahead and value staying on property enough to justify the increased costs.

 

[quandrea]

This sounds like a great plan, OP. You will make a wise decision that fits your family, I am sure.
As you can tell by the replies, there are some DVCers for whom the financial costs of DVC are very important. For others not so much. We own 1150 points and so have considerable money tied up in buy-in and annual dues. We are not wealthy. We live very simple lives, have no debt and DVC is our luxury. If we are unable to get a single penny for our points on resale, I will have no regrets. We have enjoyed and continue to enjoy so much our time with family and friends at Disney. As DH's health has changed (he is 80), we find that WDW offers familiarity and wonderful accommodations for those with disabilities. We do parks less and enjoy the resorts so much. And it is hard to overstate how much our family values the memories we have of our big family trips.
Good luck with your decision!

What a terrific post. I am only 41, with a young family but I think at this point in your lives if you can swing it financially and it is something that brings you joy, do it. Not everything has to make complete sense financially. If you were squandering your savings on dvc that you be another matter. Enjoy this time with your spouse.

We are just wrapping up a two week stay at animal kingdom kidani village. It is home. We had an amazing time. We enjoyed the parks and the resort equally. When we retire we hope to be down here a few months a year. We like it because it isn't far, the amenities are great, access to health care is good and, for future, disney caters to those with special needs.

My parents are your age and I wish they'd buy. I hate when they go to an all inclusive in Cuba and I have to worry about them becoming ill. They would have a great time here, and they'd be safe. I'll keep working on them. You, in the meantime, should enjoy your retirement.