DVC - Is It Worth It?

[DizBub]

I'm not counting the initial price of the contract here. The reason for this is that the contract can always be sold and most (if not all) of the resale purchase price will most probably be recovered.

What am I missing here?

You aren't missing anything. In fact I feel the same way recouping the initial price, something that tends to get overlooked, especially if one buys resale.

I'm also a person who thinks there is value in actually using our points. In my opinion a DVC resort is a huge upgrade over a regular Disney hotel room. DVC changed the way we vacation. We spend more time at the resorts and less time at the parks.

 

[crisi]

I'm not counting the initial price of the contract here. The reason for this is that the contract can always be sold and most (if not all) of the resale purchase price will most probably be recovered.

What am I missing here?

That people who bought in 2007 or 2008 either resale or direct, then lost their jobs in 2009 and sold in late 2009 lost their shirts - they didn't collect nearly most of their purchase price - if they'd recently bought direct they didn't manage to get half their original purchase after paying commissions. For those that financed, the penalty was really steep - they had very little equity and often had to come up with money just to unload the contract and the payments. No fault of their own - bad timing in buying at the height of the market just before a major recession.

Never assume you'll get anything for your contract. Because all it takes is for a terrorist attack, or a recession, or a large and permanent increase in gas prices (and airfare) to see your value shrink considerably.

 

[Clare Voince]

Mousesavers has a great section on this topic. They run the numbers, and tell you when you'd break even if you go every year. They also discuss the opportunity cost, something that most people don't think about. You also have to consider that your life in 30 years may not be the same as it is now, and whether you really want that kind of commitment. I think that unless you are so rich that the cost is 'throw away' money, then it is not worth it. Of course, if I was rich enough that I could just throw around that kind of money, I'd be staying in Suites, not DVC. :>

 

[DizBub]

That people who bought in 2007 or 2008 either resale or direct, then lost their jobs in 2009 and sold in late 2009 lost their shirts - they didn't collect nearly most of their purchase price - if they'd recently bought direct they didn't manage to get half their original purchase after paying commissions. For those that financed, the penalty was really steep - they had very little equity and often had to come up with money just to unload the contract and the payments. No fault of their own - bad timing in buying at the height of the market just before a major recession.

Much like the housing market when that bubble burst. I know of people who are still upside down on their homes and we live in a stable area that wasn't hurt as badly as most places. Some of these people have since divorced or had to move for work and can't get enough out of their houses to pay off the note. Then there are the people who lost 40% of their savings and pensions when the stock market crashed who are still trying to recoup. This is life, stuff happens.

DVC is a luxury purchase. Going on a Disney vacation every year is a luxury, although to some people it's a "necessity". You are the only one that can calculate how much risk you are willing to take for many years of future vacations.

 

[Anna114]

Maybe it's me and I know things change but here's how I looked at it. I paid cash for my 203 VWL points. 3 different contracts at approx $70 a point for a grand total of $14000 give or take about $500, on the secondary market. I plan, God willing, to own my points until 2042, when the contract ends. That works out to about $450 (these really are round numbers for the sake of the argument but close enough) for the cost of my points a year. Now it's $1200 a year for maintenance. My husband and I usually average 2 times a years in a studio for a grand total of 14 days. When you add the maint and the cost of the points that works out to about $116 a day. For me that is worth it. If God brings me home earlier then my plan well then my kids are in luck. I'll be 78 in 2042 it's a good plan for me lol.

 

[skier_pete]

What am I missing here?

I think dismissing the initial cost of the contract - typically $10K - $20K - as totally a refundable investment isn't realistic for most people. If it is for you, that's great, but for many of us, that's a big chunk of change that we really have other more immediate uses for.

I considered that money as a loss leader. Part of why we bought DVC is we decided we want to be going to Disney well past our child growing up, well into retirement. Short term, that initial investment is a "bad" investment, When I average that initial cost over 10 years, our trips are going to cost more until we can pay that off, but long-term, to allow us to take Disney vacations 15+ years from now for MUCH less than it would cost otherwise, it is worth it.

That said, every person has to factor things their own way. The way that makes "sense" to them. Your opinion is not wrong, but it's not the way I would look at things.

 

[disneynutz]

You need to really look at what DVC gives you, how often you vacation at Disney now, if you will be happy staying at a timeshare which is different than a hotel room, if the DVC policies, rules, and customer service is acceptable to you, and finally what it will cost.

We sold some AKV contracts a few years ago at $10,000 less than what we paid for them. Disney exercising ROFR, the economy, and the number of owners selling will dictate the price. If more owners sell, the prices will go down, supply and demand.

Bill

 

[Disneyandphilliesfan]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

 

[crisi]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

Why would you only feel safe buying direct. Many of us have bought resale - and have owned for a decade or more. Thousands of resale owners are out there.

As for perks that Disney tells you may only be available if you buy direct, what they aren't saying is that all perks are perks, they can be removed from the program at any time. Disney cannot change what you contractually get for anyone - but they can change what you don't contractually get for everyone.

To date, the features Disney has removed from resale buyers are the ones that "sell" the system, but you discover are bad deals once you are in.

 

[graychef]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

Process of buying resale:
1. Find a listed contract for sale
2. Make offer
3. Seller accepts offer (may be a back and forth negotiation)
4. Contract is sent to Disney for ROFR
5. Disney exercises right within 30 days or so
6. If Disney passes, Buyer and Seller receive closing documents from closing company; If Disney takes, go to step 1
7. Buyer and Seller send in closing documents and all associated forms and payments to closing company
8. After closing, Disney sets up account for new member or adds contract to existing member (as applicable)

From my experience, the process takes 2.5-3 months from step #4 to have the points in the account and ready for reservations.

Pros:
1. Savings, potentially huge savings
2. Availability of "sold out" resorts
3. Negotiable prices
4. Potential for loaded contracts
5. With the exception of the Concierge Collection, the Disney Collection or the Adventurer Collection, the contracts are treated the same as buying direct
6. Variety of point amounts, use years, resorts

Cons
1. Time
2. Concierge Collection, the Disney Collection or the Adventurer Collection are not allowed under resales after March 2011
3. Cash or third-party financing required (Disney has financing options, albeit expensive)
4. Subject to ROFR
5. Subject to loaded or stripped contracts, occasional limitations of closing dates due to owner's use of points


After all of this, I decided on resale.

 

[skier_pete]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

Not sure what your "safety" issue is. Your not buying a used car where the history could affect you. A resale contract works exactly the same as a direct buy contract. At 30 - 60 % discount for almost the same benefits - you do lose out on some trade options by not buying direct - I would let safety be a concern.

I agree that I wouldn't buy from just some personal ad in the paper, but there are reputable resale sites (I used the one advertised at the top of this site but there are others) that do everything buy the books, including putting your deposit in escrow until the sale goes through. They also shouldn't take a commision until the transactions complete.

 

[Minniesgal]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

Not sure why paying a lot more money for the same thing is safer.

Resale is a lot cheaper depending on where you are buying and you are buying the same product. There are resale companies who have been doing this a long time and I dependant closing companies. All above board

 

[chalee94]

I would only feel safe buying direct.So my thing is I want someone to tell me why to buy resale and how does it actually work? I am 37 now so hopefully have 30 years to play with it.

another thing to keep in mind is that if your life or interests change and you need to sell, you WILL be selling on the resale market. disney will not buy it back so there is no other option (unless you want to give it back to disney for free as a foreclosure).

so might as well get over the fear of "resale" now...

take your time and read about the program. talk to the timeshare store people. it's not very risky when using a competent broker - you are just buying from someone (much like you now) who has had a divorce...or job loss...or their kids no longer want disney but prefer beach vacations...or they think ticket prices are too high and would rather go hiking around vancouver or whatever...

 

[HokieGCC]

I'm not counting the initial price of the contract here. The reason for this is that the contract can always be sold and most (if not all) of the resale purchase price will most probably be recovered.

What am I missing here?

I would agree that if you buy then later sell your points for an equal amount then it would save you right off the bat.

The real truth here to remember is that Disney is the most effective company in the history of the world at separating you from your money. I say that as a compliment to Disney for unmatched excellence and business ability. However, assuming this is true then everything they do (DVC included) is for Disney to make more money not for us to save money. I think this typically plays out that DVC enables people to get (spend) more Disney.

 

[Disneyandphilliesfan]

Thanks for the advice everyone but I think the best move someone can make is buy a house near Disney World and make a profit down the road from it.

 

[nalajms]

Thanks for the advice everyone but I think the best move someone can make is buy a house near Disney World and make a profit down the road from it.

I remember having this debate in 2012 on this board! My answer to that is, Good luck!

Did you see what the market was like down there after the housing bubble? I don't think it's even recovered after 6 years. The Orlando area was/is over built. While it may look good to buy at 150k property in a managed community and rent it out for 600/wk, the likelihood of actually renting the place out enough to cover your expenses is low. You're competing with hotels, resorts and a ton of others on vbro. If you get a mortgage, you're also risking your credit if things go bad.

 

[Anna114]

Thanks for the advice everyone but I think the best move someone can make is buy a house near Disney World and make a profit down the road from it.

That works for some but I'm not sure you can compare apples and orange crates. Specifically, the initial cost, house vs DVC. Also, unless you have the money to hire a company to oversee your house and find vacationers there is a heap of work involved. You also stand to lose a lot more money if the plan doesn't work out. Also, many people want to stay at a Disney resort for the theme and the ability to not drive if they don't want to. Disney does bring things to the table in spite of the lesser value it use to be. Those are just the first couple of thoughts.

 

[lovin'fl]

Didn't I read, and correct me if I am wrong, that folks who have a 2nd home in FL pay double property taxes or something crazy like that???? We had planned to buy a condo in FL. DH works from home and our kids are all in HS, so were were thinking of selling our house when youngest graduates, in 2017, and buying a townhouse here and a condo in FL until I heard about the crazy property taxes. So, we then decided to use our DVC to do 4-6 weeks in the winter in FL (only would take 500-600 points, but we'd maybe have to do a lot of it in a studio...but we already have 480 points and plan to add more).

Kind of got off topic. OP, yes it's worth it...or it has been for us. I don't really consider the initial buy in but I suppose I should (my thinking is that we'll use it to the bitter end so that only adds a couple-few dollars per point to the annual dues...or if we sell, we'll make back, close to, what we paid). We started going to WDW in 2003 and stayed offsite that year (boo) and then in a moderate, POR (family of 5) the next trip. But we bought to get the 1BR and have 2 sleeping spaces for us to get our own space and kids to get theirs (plus the W/D is really nice to have). We likely would never go as much as we do if we had to, all 5, cram in 1 room or get 2 rooms. But, yes, now we give more $$ to the mouse (PAPs, TIW, dining) but we like what we get in return so it's all good.

 

[bakerworld]

Thanks for the advice everyone but I think the best move someone can make is buy a house near Disney World and make a profit down the road from it.

You sound like my better half - maybe it's a Philly thing - but I talked him out of it I didn't want the upkeep of a 2nd home or being a landlord.

FYI - the majority of the 'verbal' posters here are resale addicts. We're direct buyers - we financed our purchase and paid them off over time (like a car payment - another analogy that posters here). We've traveled, done the 'work' vacations and now I just want a relaxing vacation. Seriously, our last vacation was 3 pages of bar bills. The plus now is that the initial direct buy is 100 pts. If I were just starting out I'd purchase either BC or BW and stay a couple of years. When you've used all your points then make a decision. If you decide you don't like it those BC/BW 100 pt contacts resale pretty easily. You'll need to factor in the loss if you sell after 2 years because they'll be one but I don't think it's be huge on 100 pt contract and you'll've learned the 'system'. Renting pts will give you a venue idea but it won't teach you the system like using it. JMO

 

[gfyjny]

We first found out about renting points through this forum and rented points for $11 per points from an owner of BLT. It was definitely cheaper than booking directly through Disney and by doing renting we save close to $2000 for a nine night stay at two bedroom suite with MK view. This was back in 2010, during that trip we made a decision to purchase 270 points of Grand Californian since we live in CA. We paid $95 per point after the incentive discount and also got 270 points of developers points addition to our initial 270 points from the purchase. with that additional points we were able to go on a five night Bahama cruise on Disney Dream on 2012. On that cruise we purchased 160 points of Aulani points because the resort wasn't open yet, we were not able to get that developers points but we did get our founding member plaque at the resort as well as nice framed plaque shipped to our house. I believe we paid about $106 or so after the discount they offered on the cruise and we got the initial low maintenance fee. We ended up adding 120 points later when they offered buy 100 get 20 for free.

Over all, we are loving our ownership of DVC. We took many trips to Grand Californian and allowed us to have our friends and family to use our points to stay there or Paradise Piers using the points on Disney Collection. We were able to also take 10 day stay at Aulani and are looking forward to many more trips in the future. We will be staying at Grand Floridian for a week and another three nights at Boardwalk Villas, using our Aulani and Grand Californian points (booked right at 7 month in advance.)

Checking the resale pricing on Grand Californian and Aulani, GC points are selling about $40 more per point than what we paid for and Aulani is fairing about even pricing. We have no plans to sell our points anytime soon, and feel very lucky that we made the right choice on which resorts to buy into.
We have 550 points total and it works great for us and never lost any points. If we buy anymore points, it would be for Polynesian Villas open up and if it would be impossible to get the over water villas using our points at GC and Aulani.

If you love staying on site, deluxe accommodations, planning vacation at least 7 to 11 months in advance, and can afford it, then I would highly recommend buying into DVC.