DVC as an investment

[Susieab]

I need to get the forum's opinion on DVC as an investment. We have a couple hundred points in BCV and are considering adding on more points. These points would be almost all used to sell or transfer to other members. Does anyone else have experience with this? We have sold some points in the past and it seems to work out well. However I am just curious to see if the market will still be in a few years?

Also we are looking at using Timeshare store rather than purchasing from Disney. The cost seems to be less and more variety of resorts. Comments?

Thanks

Susie

 

[erikthewise]

This is sort of a touchy subject so don't be surprised if not too many touch it.

The contract clearly states that a DVC purchase should not be considered as an investment; perhaps others will provide more details. There is a lot in the contract that is just legalese and rear-covering, but I think this particular clause should be taken seriously.

As to whether it would actually be a good idea to buy points with the intention of only renting them, there are a lot of aspects to this, including the hassles and risks of renting, and the fact that neither DVC nor much of the membership are happy about this practice.

But even from a strictly financial point of view, this is a tough way to make a living. You're only going to be making 3%-4% annually. At $84/pt , 4.25% (home equity) interest, and 1% annual dues increase, it would take you more than 20 years to pay off your original purchase. That's assuming you get $10 per point in perpetuity. Sure you may be able to get more, but interest rates and annual dues may also increase. Although there's an active resale market, it's unclear when or if you would be able to get your full purchase amount back.

 

[CarolA]

NO timeshare (including DVC) should be considered an investement.

As to what you are considering, I personally think it is TOO much work for too little return. You are the at risk party if the renter's check bounces, the renter doesn't pay etc... The other downside to renting is that right now with the economy down Disney is still offering pretty good discounts on regular rooms.

As a consumer I would not rent from an individual. I really perfer to be able to deal with a known entity.

 

[vernon]

I know there are people who have done what you're thinking about. IMHO it seems that it is something they have to work quite hard at ( looking at some of the postings trying to get the "going rate " up and the "sales pitches" that go on). I'm sure there is some money to be made in it, but I think there is also quite a lot of frustration and effort as well. It's not something I would do as a "business plan" as IMHO there are too many things that can go wrong, but maybe that's just because I prefer a simple/stress free life

 

[Susieab]

Thanks for the advice to this point. I will definitely check out the legal aspect of it, that is something I had not thought of to this point. The return is about what I had figured. Not great but as good as the stock market right now.

 

[CarolAnnC]

I do not rent out my points, but here is my situation.

I own 770 points at OKW, Vero, BWV and BCV. I have paid as little as $54 pp all the way up to $74 pp (with MB) for my last BCV purchase.

I have taken many wonderful trips and cruises using these points since 1997. I could turn around and sell them for lots more money right now than I even paid for them.

Is it an investment? Not designed to be thought of as one, but I venture to say my return on my money has been greater than the stock market the past couple of years...my 401K attests to that! LOL!!!