DVC...am I ridiculous for thinking that this is do-able for us?

[crisi]

Disney stock almost doubled in value this last year (up 86%), but still I will never invest in stock again - only gold and real estate. But with DVC, at least you'll have an asset you:
#1 - can enjoy
#2 - can rent out if need to save (or even make) money for a few years
#3 - don't need to manage much, and
#4 - can resell for near what you paid for it, or even for a profit (if not near end of term)

On #4, a lot of buyers who bought in 2007 found that when they needed to sell in 2008 or 2008, they couldn't sell for near what they paid for it. Some people were taking thousands in losses. Plan on it taking several years before you make up "what you paid for it" - particularly if you buy direct (although people buying BCV in 2007 were paying near retail - especially for small contracts).

Similarly, if you consider renting to pay dues for a few years - over the past two years there have been a lot of points available, and a lot of bargain hunters comparing a DVC rental with Disney's offers of "Free Dining." As DVC continues to grow, there are more and more points available on the rental market - some of those points held by people who paid $60 a point for their contract and really do just need to cover dues and are making a tidy profit at $8 or $10 a point.

Its a risk analysis, but I wouldn't weigh "being able to rent" as a certainty, nor "being able to sell for what you paid for it." It is definitely something that can give you enjoyment and it is pretty easy to use. But that doesn't mean that its a wise financial choice for everyone.

 

[BoardwalkSuzy]

On #4, a lot of buyers who bought in 2007 found that when they needed to sell in 2008 or 2008, they couldn't sell for near what they paid for it. Some people were taking thousands in losses. Plan on it taking several years before you make up "what you paid for it" - particularly if you buy direct (although people buying BCV in 2007 were paying near retail - especially for small contracts).=

So true! Yes, if you purchase a brand new car, try to sell it one year later, you will lose a bundle. Buy used DVC points, buy resale after initial price drop, then hold your investment. A quick liquidation after buying retail can result in substantial losses.

Putting myself through college and graduate school, I had to buy several used cars - the first was an old VW bus, the next was a Mazda pick-up. I bought the VW bus for $1200, resold 4 years later for $1500. The pick-up I purchased in grad school for $7500, resold for $9500 two years later - went up in value. So it was like getting a free car for all those years. DVC kind of works the same, kind of like getting a free vacation, but with perks and tax write-offs, and without the car maintenance.

Guess better get back to work now...

 

[crisi]

So true! Yes, if you purchase a brand new car, try to sell it one year later, you will lose a bundle. Buy used DVC points, buy resale after initial price drop, then hold your investment. A quick liquidation after buying retail can result in substantial losses.

Putting myself through college and graduate school, I had to buy several used cars - the first was an old VW bus, the next was a Mazda pick-up. I bought the VW bus for $1200, resold 4 years later for $1500. The pick-up I purchased in grad school for $7500, resold for $9500 two years later - went up in value. So it was like getting a free car for all those years. DVC kind of works the same, kind of like getting a free vacation, but with perks and tax write-offs, and without the car maintenance.

Guess better get back to work now...

Though even resale prices dropped a LOT the past few years. Plus there is the commission involved in a resale. So even if you buy resale, you can't generally count on being able to flip for a profit - or even break even - if you need to. In early 2008 we could have resold points we bought resale for $63 in 2002 for $89, paid a 10% commission, and come out ahead by $17 a point. DVC not only looked like a great way to vacation, we were doing pretty well on it from an asset gain standpoint as well. By 2009 we would have been selling our points at less than $70 if we needed to make a quick sale, and not breaking even. Now we'd be able to sell them for $75-80 again. But had we bought BWV in 2008 for $89, we'd still be in the hole in 2010.

For a timeshare, DVC has really held its value very well. But it isn't something that you can count on long term - or even short term. If tomorrow Disney stops exercising ROFR on my BWV points - or starts exercising it down near $50 a point, the value will plummet.