DVC Cruise Question / Reselling your DVC

[Kuzcotopia1]

I am a long time lurker, first time poster. My husband and I have been visiting Disney annually for the last 7 years and have always debated joining DVC. We kept nixing the idea until this year when we'll have the funds saved up to do so without financing. Since making the decision to join all of you have become my best friends!

Obviously, picking up a resale contract is the way to go since it's cheaper but you will not reap the benefits of a new contract, such as the cruise line. I understand it's not the optimum way to use points; however, I'm just curious about how many people have resale contracts and pay out of pocket for the cruise? Do those who purchase resale contracts have no interest in the cruise line? Again, just curious. I'm really fighting with myself on this one because I loved the cruises I took thru Disney.

For reselling, I know it's easier to sell smaller contracts (100 - 150 points) but how difficult is it to sell contracts later down the road? Does anyone know, on average, how long a contract stays on the market? When we join, I don't plan on reselling but you never know what will happen when a contract is until 2057, etc.

Thanks for all of the input! Without these boards, I would be lost!

Christine

 

[chalee94]

Obviously, picking up a resale contract is the way to go since it's cheaper but you will not reap the benefits of a new contract, such as the cruise line.

yeah, not really a "benefit." but i suppose it's nice to have options.

be sure to look at some actual point charts for the cruises and make sure the numbers really seem like a decent deal before you buy:

http://dvcnews.com/index.php/dvc-program/points-charts/non-dvc-destinations?id=147

(also, remember that pt charts for cruises are not locked in the way that the pt charts for the DVC resorts are, so they can change significantly.)

I understand it's not the optimum way to use points; however, I'm just curious about how many people have resale contracts and pay out of pocket for the cruise? Do those who purchase resale contracts have no interest in the cruise line?

most would rent their pts (by themselves or through a broker like David) and take the $11 - $14 per pt that they get from the rental and apply it toward a cruise.

the ability to pay cash always gives you more options, not less.

(there have been cases where DVC owners have been told that the cruises were full as a points option, so they could book with cash but not points.)

For reselling, I know it's easier to sell smaller contracts (100 - 150 points) but how difficult is it to sell contracts later down the road?

things can always change, but right now it's easy to sell a contract.

(and remember that if your circumstances change suddenly after your purchase and you need to sell, you will be selling at resale prices whether you purchased resale or paid extra to buy direct.)

the only thing that typically makes it tougher to sell a contract is if you buy direct and finance the contract heavily, you may have issues. after you sell the contract at resale prices and pay a 10-12% commission on the sale, you would still not have enough to pay off the debt to disney and need to add cash to be able to complete the sale.

Does anyone know, on average, how long a contract stays on the market?

it varies based on resort and size of the contract (and of course, how aggressively you price the contract).

a 50 pt BCV contract at a reasonable price will probably be sold in an hour. a 500 pt SSR contract will definitely take longer.

When we join, I don't plan on reselling but you never know what will happen when a contract is until 2057, etc.

it's smart to plan a possible exit strategy (or at least understand your options) before you pay tens of thousands to buy in...

edited to add: virtually all owners will wind up selling before the expiration date of the contract...

 

[Kuzcotopia1]

Thank you so much for an awesome response! It was really helpful. We have been leaning towards resales since they're cheaper but this week I had a OMG moment where I was like but what about cruising!

The whole of me wants to be completely irresponsible and just do it right now! but as I get excited, I try to knock myself down a peg (back to reality) and look at the cons too. I want to make sure pre-purchase that I truly know what I'm doing and what I can afford long-term.

Again, many thanks!

 

[disneynutz]

Thank you so much for an awesome response! It was really helpful. We have been leaning towards resales since they're cheaper but this week I had a OMG moment where I was like but what about cruising!

The whole of me wants to be completely irresponsible and just do it right now! but as I get excited, I try to knock myself down a peg (back to reality) and look at the cons too. I want to make sure pre-purchase that I truly know what I'm doing and what I can afford long-term.

Again, many thanks!

Take your time, do your homework, buy resale.

Your toughest decision IMO is knowing where to buy. You could make your best guess but it's like going on a first date. What you see on the outside, isn't necessarily what you find on the inside.

I also believe that you should buy where you love to stay. Each year more and more owners are added to the DVC and each year more and more owners are posting about their booking frustrations. Checking for availability several times per day and using waitlists isn't much of an enjoyable vacation experience.

You will be spending thousands of dollars to buy, hundreds of thousands to take your Disney vacations and if you didn't buy your favorite resort do you really want to hope that you can stay where you want, when you want???

Bill

 

[bobbiwoz]

Right now if you do not have any points bought direct you cannot book a Member Cruise. I love the presentations by Disney people offered during these cruises.

Bobbi

 

[iluvthsgam]

Rent X numbers of points * $12-$13 per point then pay cash for the cruise.

This almost always is a better way to go then using points for the cruise. Just do the math.

And this is assuming you already own DVC. If the only reason you want to buy direct is because of option for the cruise, buy resale.

You will save more buying resale AND renting the points and paying cash for the cruise is a better option, so you get savings on two levels.

 

[apple9117]

I agree with the other members here. Buy resale to save lots of $$$, and then if you ever need cash, rent out your points to get cash, and use the cash to book a cruise!

The DW and I have been on about 4 disney cruises, before we bought into DVC. When we first decided to buy DVC, I wanted the option to book cruises using our points, as we LOVE the disney cruises. However, when I looked at the how much points cost to book a cruise though DVC, it's totally not worth it. You can get such better deals paying cash. Ultimately we decided to buy into DVC through resale at the resorts we love (GVC and AK). We still plan to go on cruises in the future, and plan to rent our points out, and use the cash to book cruises.

Gluck!

 

[crisi]

We have enough DVC points to go every other year. In alternate years, we pay cash to do something - sometimes that has been a cruise. We don't see DVC as a means to accommodations for or funding all of our vacations, just the WDW ones - which are only about 25% of our trips.

As for renting your points to pay for a cruise, you can rent points - through a broker its pretty easy - but I'd hesitate looking at it as an exchange of points for a cruise. Its points for cash - at which point cash becomes very fluid If you aren't going to use your points, rent them - whether THOSE dollars pay for a cruise or pay a new refrigerator is sort of moot. If you aren't using your points because you are cruising, that's great, but its possibly best to think about it as just "not going to use those points this year." That frees you to make all sorts of fun decisions about what to do with any rental income - as well as discourages you from buying extra points to fund non-points vacations (because while it isn't a bad exchange rate, you'd likely do better investing in something other than renting DVC points to fund your other vacations.)

 

[iluvthsgam]

As an easy example:

I picked a random cruise to look at. March 21, 2015 7 night Eastern Caribbean on Disney Fantasy.

Current retail cost for 2 adults and 1 under 2 child is $4,192.46 for a "deluxe oceanview stateroom category 9D (cheapest oceanview).

The same cruise in points is 280 per adult and 115 for child = 675 points.

Now - ignoring just for now (which I know you shouldn't do but for ease of analysis we are going to) the buy-in cost of DVC:

The lowest maintenance right now is Bay Lake @ $4.7846 per point.

Those 675 points will cost you $3,229.61 +$95 fee for booking cruise. So far that looks like a better deal then paying retail (save $867.85).

But, those 675 points are "worth" $7,425 at David's rental service at a minimum ($11 per point). And worth more if you rent yourself.

So instead of paying $3,229.61 in maintenance fees and using the points for the cruise, you pay $3,229.61 in maintenance fees to rent the points and receive $7,425 in exchange.

Your net after renting is $4,195.39 and now you pay for the cruise with this cash.

This particular example, it works out to be almost the same. BUT to get the points by buying direct you are paying a whole lot more.

So where before we ignored that cost, now we need to look at that cost. If the only reason is to get the cruise, why pay 25%-50% more at direct where it is usually the same or better to rent and pay cash.

Also, you have flexibility with booking the cruise with cash, and not as much when booking with points.

If renting points makes you uneasy or uncomfortable, then obviously the analysis is different. And if you want to use points for the cruise you must buy direct.

 

[Dean]

I am a long time lurker, first time poster. My husband and I have been visiting Disney annually for the last 7 years and have always debated joining DVC. We kept nixing the idea until this year when we'll have the funds saved up to do so without financing. Since making the decision to join all of you have become my best friends!

Obviously, picking up a resale contract is the way to go since it's cheaper but you will not reap the benefits of a new contract, such as the cruise line. I understand it's not the optimum way to use points; however, I'm just curious about how many people have resale contracts and pay out of pocket for the cruise? Do those who purchase resale contracts have no interest in the cruise line? Again, just curious. I'm really fighting with myself on this one because I loved the cruises I took thru Disney.

For reselling, I know it's easier to sell smaller contracts (100 - 150 points) but how difficult is it to sell contracts later down the road? Does anyone know, on average, how long a contract stays on the market? When we join, I don't plan on reselling but you never know what will happen when a contract is until 2057, etc.

Thanks for all of the input! Without these boards, I would be lost!

Christine

You have the unique opportunity to judge buying DVC and paying cash for DCL or other non DVC options. In doing so you simply need less points. You'll spend less long term by buying less points and ONLY using them for DVC an paying cash for the other options. That is clearly the best choice. I would also recommend against buying with the idea of selling later. What you're essentially talking about is structuring the contracts as insurance for later for possible resale. However, what most don't realize is that insurance is VERY expensive. If one's total points will exceed 300 then it STARTS to become reasonable to get multiple contracts but even then not generally worth it simply for the insurance for possible resale later. Once one gets to around 400-500 total is where I'd think it more mandatory to seriously consider multiple contracts. Now IF one can find multiples that are tied together such that it functions as one contract in the purchase (price per point and closing as if all one large one) then it's basically free insurance and a no brainer.

 

[chalee94]

Your net after renting is $4,195.39 and now you pay for the cruise with this cash.

(but to make things just a little more complicated, let me throw in that you would owe taxes on the rental income...)

 

[Msmithmd]

(but to make things just a little more complicated, let me throw in that you would owe taxes on the rental income...)

Technically true.

Although I'm confident that the percent of people who actually pay taxes on DVC rental income are analogous to the percent of people who submit annual instate sales taxes for all their non-taxed internet purchases. And the percent of babysitters who declare their wages.

This is indeed legally taxable income, after deducting your cost basis. Whether that income is actually captured by the IRS, is a different matter entirely.

 

[Kuzcotopia1]

I would also recommend against buying with the idea of selling later.

It isn't that I'm thinking "take this for a couple years, then sell it..." I am just trying to cover all my bases and get a full understanding of what it means to be an owner long term. You never know what could happen later on down the line, so I need to keep that in mind during this process.

That being said - THANK YOU ALL for being so helpful with my questions! I appreciate the time you took to do all of that math and post replies.

 

[CarolMN]

Those of you interested in further discussing the VALUE of using points to cruise are asked to do so in this thread:

Using Points for the DVC "Collections"

Thank you!

 

[DizBub]

One bit of advice I can offer is (after you buy resale ) you can buy a small add-on direct from Disney. As an existing member you can buy as few as 25 points to give you the ability to book a members cruise.

Of course, you will have to pay cash for the members cruise and most will tell you that it's actually cheaper to book a regular cruise but that's another thread.

As for selling your DVC at a later date, at least you can sell unlike a lot of other timeshares. The smaller the contract the easier, faster and higher the asking price.

 

[LisaS]

Another thing to be aware of re: cruising on points is that once you commit points to booking a cruise those points are considered Reservation Points. If you cancel your cruise, those points cannot be used to book a DVC resort. They can be used to book another cruise or a non-DVC Disney hotel. Both options come with a $95 booking fee. If you could not use those points to book one of those options before the points expired and opted to rent them, it would be more difficult to do so because of the booking restrictions on the points. For a potential renter, booking either option on rented points is much more expensive than cash so you would have to let the points go for very little money.

 

[Dean]

It isn't that I'm thinking "take this for a couple years, then sell it..." I am just trying to cover all my bases and get a full understanding of what it means to be an owner long term. You never know what could happen later on down the line, so I need to keep that in mind during this process.

That being said - THANK YOU ALL for being so helpful with my questions! I appreciate the time you took to do all of that math and post replies.

Making the assumption that the ONLY component of the decision is for future options (insurance) and that one will end up with the same number of points and same home resort, the cost difference should be around $1500-2000 on 200 points but it could be more at some resorts, roughly 10% more. I realize there may be other reasons to have multiple smaller contracts (phase in # of points, multiple home resorts) but I'll just stay with the simple question of smaller vs larger. Certainly it's worth having option so if one can find multiple together such that there's only one closing AND the price per point is comparable to a single contract, there's no reason not to but it's not the usual. However, paying the extra for this option is probably never worth it if the cost fits the thinking above.

In addition, it's very possible it'd be even more costly than above for several reasons. It reduces the number of contracts in play dramatically and makes it far more likely one will actually pay even more pp than the assumptions above. It also makes it more likely the buyer will overbuy in number of points, esp since I believe many should actually underbuy (both resort and size) early on in many cases. It also makes the assumption that smaller contracts will continue to be worth more, something that is likely but no where near a guarantee. I can think of several changes that could reverse that trend. Also, what if DVC doesn't link them and you end up with 2 smaller but totally separate contracts or simply different UY which also keeps them totally separate. To phase in by buying less now and more later and/or to buy 2 different resorts adds additional value which would make this approach more reasonable for some. Since I don't believe it's reasonable to buy now planning to sell later, I don't think it's reasonable to break up into smaller contracts until you get the contracts large enough that you don't have trouble finding appropriate contracts, likely around 200 points per contract roughly.

For those looking to buy a resale contract AND a retail contract, in almost every case I'd buy the resale first.

 

[Shelly F - Ohio]

What happened to us is that we bought into DVC during a vacation. Well then we were faced with 160 point that were give to us for the purchase but we had just finished our WDW vacation. So we banked those points and use the points the follow year to book a 4 day cruise and 3 night DVC stay.