DVC as an investment

[CowgirlTN]

if we bought into the vacation club could it be used as an investment? We don't plan to vacation at Disney year so would rent the points out. Do you get a tax right off?

 

[com_op_2000]

IMHO, no - do NOT buy into looking for use as an investment.
DVC has rules against always renting your points.
If you do a rental you have to include the income in your taxes, can only right off the actual taxes each year, check with your tax professional for details.

 

[chalee94]

if we bought into the vacation club could it be used as an investment? We don't plan to vacation at Disney year so would rent the points out.

disney prohibits what they call "commercial renting" so you couldn't claim to be surprised if DVC changed certain rules to make your investment less profitable.

it's already a pretty expensive timeshare, in terms of upfront cost and annual dues, so there's not a giant profit potential to begin with. this discussion comes up a fair amount with the general consensus being that there are cheaper timeshares with fewer corporate restrictions if you are thinking of "investing."

(naturally, most won't share specifics but i've gotten an idea from hanging out at TUG.)

 

[CowgirlTN]

Thank you so much for the feedback. This really helps and us deciding against buying into the timeshare.

 

[disneyberry]

Timeshares should never be treated as an investment. Buy only for the purposes of actually using it for vacations!

 

[suebeelin]

We bought so we could prepay our vacations, stay in 1 or 2bds, hopefully for at least a decade. If or when we resell, we hope to break even on the buy in cost.

In 10yrs, we are assuming finances will be stable (hubby in his residency, and should be done by then), so we may never resell. But the resale option is there bc we hope to minimize our initial investment by recouping most of the principal should we ever want to .

Hope that makes sense?

 

[Dean]

if we bought into the vacation club could it be used as an investment? We don't plan to vacation at Disney year so would rent the points out. Do you get a tax right off?

From an investment standpoint it's high risk and low return. I'd never buy as a planned investment, however, where DVC makes sense otherwise there are situations where one might buy more points than they'd need now and rent them out. There really are no tax advantages, just liabilities. The depreciation and 2 weeks tax free rental options applicable to a vacation home do not apply to timeshares. Technically it MIGHT be possible to qualify for both options for some timeshare situations but realistically it's not possible.

 

[Pigletpal40]

We bought VWL resale in '03. 9 trips in 12 years and sold it for $1600. more than our purchase price. We stayed at Beach Club(1), OKW(1), AKV(2),
and of course VWL(5) all for the cost of dues. My wife said as soon as Poly gets a DVC she's selling VWL. Great vacations, never regretted. Yes, you can break even or make a small profit. Not good as an investment. We'll see on Poly with the high price start point.

 

[CraigInPA]

If you consider the maintenance fees and the time value of money, DVC could never be considered a good investment. You'd be better off buying stock in Google and holding it until they own the planet...

 

[coastalhh]

Two bedrooms Yearly fees alone are $340 a night for example of animal kingdom in July. You could pay less for that offsite and that does not even include the huge upfront cost of buying the dvc points.

It just depends on what you want and what's important to you but it's all relative if dvc saves any money at all.

I find the savings much more practical in studios. If I wanted a multiple bedroom with kitchen off site has so many good deals but that's my preference and everyone is different

 

[Hogzilla]

If you consider the maintenance fees and the time value of money, DVC could never be considered a good investment. You'd be better off buying stock in Google and holding it until they own the planet...

If you buy 200 points resale for say $18000 all in..... and rent them every year and clear $6 per point above the maintenance fees, your return on that $18K is 6.7% per year. Not great, but not bad. You can probably do better elsewhere.

The real rub is that at the end of the contract you would no longer have the $18000 either. So if someone wanted to use it as a money maker, you can, but you either have to sell out when there is still value in it, or just recognize that you will lose the original investment in the end. You would get back in the neighborhood of 3X your initial investment over the length of the contract..... give or take. Of course inflation will drive up the income from the points, but your dollar in 30-40 years is worth less, so that part could basically be a wash.

In the end it's not a very good/sound investment vehicle......

 

[supersnoop]

If you buy 200 points resale for say $18000 all in..... and rent them every year and clear $6 per point above the maintenance fees, your return on that $18K is 6.7% per year. Not great, but not bad. You can probably do better elsewhere.

The real rub is that at the end of the contract you would no longer have the $18000 either. So if someone wanted to use it as a money maker, you can, but you either have to sell out when there is still value in it, or just recognize that you will lose the original investment in the end. You would get back in the neighborhood of 3X your initial investment over the length of the contract..... give or take. Of course inflation will drive up the income from the points, but your dollar in 30-40 years is worth less, so that part could basically be a wash.

In the end it's not a very good/sound investment vehicle......

That return also neglects the work you'll have to do in order to rent out the points.

 

[abner1776]

"Timeshare investment" is an oxymoron. Would I make money if I rented out my VWL points every year ? ...as of now, yes but who knows what will happen a few years. Right now the point rental value is very high but it could tank in a heartbeat. If you have an extra 20k that you want to invest, look to Wall Street, NYC not Main St, USA.