DVC Membership Appreciation???

[PamOKW]

OKW opened sales at about $48 per point. A quick look at the Timeshare postings today show OKW for sale as high as $88 per point. Of course, you should not buy DVC as an investment. Silly me who knew nothing about DVC when I bought in 1993, almost waited a few more years for the price to come down as the end date grew closer.

 

[ducklite]

We might not be typical, but...

250 BCV points purchased 3/02 for $63.75 per point, sold 5/05 $80 per point.

Anne

 

[dunnhorn]

I know that a timeshare should not be purchased as an investment.

Does anyone have any historical information as to how values have held up from initial offerring price and where they stand today in the resale market?

Okay - I was just emailing a friend of mine with the news that we are purchasing 125 points from Saratoga, and he asked how many years it will take to break even. Here is my rough analysis:

Maint fees are $4.12 per point for 2007. We are getting 125 points, so that amounts to $515 for the year. You can pay that lump sum or monthly without interest. Monthly would be $42.92.


We bought 125 points at $86/point, total was $10750. (Had we bought through Disney, minimum financial commitment would’ve been a little over $15K.) BUT this price also included ALL of 2005 points banked, ALL of 2006 points and our 2007 points come in October. So, the moment we close we will have 250 points at our disposal, without our having to pay additional maint fees. I’m going to bank 125 so we’ll have 250 next year. It will be good if we decide to do the cruise OR we could use it for excess points needed on any given years trip.



Next year DS starts kindergarten, so we will start being a slave to the school calendar. I am assuming that spring break will start around the first week of April every year, like it has for the past 3 years. If that is the case, we can stay at Saratoga in a studio Sun – Friday (5 nights) for 85 points, so we’d have 40 left over for the year. Or, if we did a 1 bedroom it would be 180 points. If we are able to get Old Key West (cheapest resort on property point-wise) a studio would be 75 and a one bedroom would be 150 for 5 nights. Keep in mind that this is the MOST expensive time of year, so if we decided to do something else for Spring Break and go another time, the point “cost” would be cheaper, and therefore we could get more days out of our contract.



The studio at OKW is great because it has two queen beds, plus a fridge and a microwave – you can’t get two queen beds unless you fork over dough for a Deluxe, which during spring break would be (easy) $200 a night, plus tax. I figure if we spent $235 a night in a deluxe, then staying 5 nights would be $1175 a year for lodging (okay, this is on the low end, but I’m taking into account getting any special discounts that we can get.) Subtract maint fees of $515, and that makes a savings of $660 a year… so if you think about it in those terms, we would be looking at “breaking even” in 16 years. DS has 13 years of spring breaks for us to consider… then 2 more for DD after that AND if we consider staying more than 5 nights out of that allotment of points, and the value of using the points to stay at a one bedroom (which rents for much more) then the payoff comes earlier.



Some folks actually rent out an amount of points equal to their maint. Fees. So – if we wanted to do that, we could rent out 50 points at $10/point and get $500, then we’d pay nothing and we would have 75 points left per year – so under the above, we’d get “paid back” in 9 years, and all of the vacations after that would be “free.”



We want to go ahead and prepay for our Disney dreams NOW so that we know our Disney trip with four-five star lodging is taken care of on around $500 a year, that we can pay with a small amount per month – or nothing, if we rent out our points. It was just a no brainer for our long term plans and options. I don’t want the headache of having to come up with $1500 or $2000 every year or every other year for a Disney vacation. I’d rather just come up with ten grand now and be done with it.


We chose Saratoga because I figured that over time the maintenance fees will be the lowest. It is that largest resort, so any large scale projects or improvements will be apportioned among a greater number of members. I figure main/refurb costs will be equal (bedspread for bedspread) so we would just be looking at the major things – pool overhaul, etc. Beach Club could be pricey, as it has stormalong (and that has had constant problems) and it is the smallest DVC. OKW is good, but the points are selling at like $80 a point, and for $6 more a point we would get an extra 15 years on the contract. As for the “new” resorts, I think the maint fees at AKV will go up higher over time because of the cost of maintaining the animals in the DVC savannah. Also, Contemp – well that resort is going to be so pricey – I wouldn’t be a bit surprised to see $140 - 150 a point. When Contemp comes, we may add on with a small 25 point contract, but I couldn’t see doing more than that, if we decided to do it at all.



Bottom line is – we locked in the cost of Disney vacations for 47 years by paying $10K now. All in all, it is not a bad deal. For folks who enjoy or are fine staying at value resorts, it is not a good deal. But – we really like deluxe resorts and what comes with it (slide, hot tub, ambiance, “magic”) so it is really the best thing to do to ensure regular trips in the long run.



Plus – I figure – OKW is still selling well and it is 15 years old. SSR is still fairly new. Lets say we use the SSR points for 15 years and decide we’re burned out, want to do something else or we need the money. We could always put it on the market and get our money back, because smaller contracts (like 125) are much easier to sell. OKW started selling for around $55 a point and now it can fetch $80…. I do believe that based on what has happened with the other resorts, we could get even $86 a point 15 years from now. So we would have had all of those vacations throughout the years…. for the annual cost of the maint fee? What a bargain.



Just my opinion/viewpoint. It is not right for everyone – but it is totally for us! J

 

[BigBahamaDada]

It's also worth noting that Disney resorts currently average an occupancy percent in the high 80s. And that rate is only reached with a variety of Passholder, AAA, FL resident, free dining, free ticket, and other discount programs.

While they may be at full occupancy during peak periods, the published occupancy level means that Disney still has thousands of resort rooms sitting empty most nights each year. There's not much incentive to add more rooms to their inventory if it just means additional vacancies.

Very interesting points. If the WDW propoerties as a whole are in the high 80s, does anyone know what the average is for DVC properties? And how does that compare to other properties in Orlando?

Also, on this topic I've been wondering about just what happens to points that are repurchased by DVC. It seems they do resell some, even at "sold out" resorts.

But do they also retain some? And, if they do retain some of the universe of points, do they then use those to step into the DVC reservation marketplace to, for lack of a better term, make a block of reservations for resale to the general public.

I have seen some discussion on these wonderful boards indicating that, at a minimum, this is exactly what goes on when a DVC member trades their points for use outside the system. And, if Disney does use repurchased points to "reserve" DVC time, do they do it on a more favorable basis than the average DVC member has access to? To your point of the peak periods being sold out, if Disney - as a holder of DVC points -- could reserve for its own use (i.e. resale) DVC properties at the peak period, they would be essentially double or triple dip on the DVC front. To wit: (1) money from DVC buyers is used as a financing vehicle to build properties more rapidly than otherwise would take place; (2) Disney, via repurchases or unsold point inventory, has access (preferred?) to reserve DVC properties during peak times, thereby generating additional cash flow from cash paying hotel customers at the highest possible marginal rate; (3) DVC'ers that are unable to get reservations during the peak periods, opt to vacation at other times, thereby giving Disney increased occupancy during slower times of the year.

 

[BigBahamaDada]

There's a Wall Street Journal article entitled "The Magic Kingdom Looks to Hit the Road" that disagrees with this. I would post the link but apparently I'm not allowed to yet (not enough posts). Second to last paragraph reads "Disney's time-share business, Disney Vacation Club, is also plotting new locations. Outside of Florida, the company may consider locations such as California, Mexico and the Caribbean, says Mr. Rasulo. It could take several years for such new ventures to really move the needle, however."

Here is a link to the referenced article: http://online.wsj.com/public/article/SB117090283470501808-pJ_NgrpKGesSx1OEejz1VYOKLXQ_20080208.html

 

[CarolMN]

Well lets see if I can get this math right.

I could sell it now for $93 per point which equals 14K.
I bought BCV 3 years ago for 11K ($73pp x 150 points).
Gross Profit = 3K

I had to pay $500 per year in Maint Fees for 3 years
Net Profit = 1.5K over 3 years = $500 per year

$500/11K = 4.5% ROI

AND I GOT 8 AMAZING VACATIONS TOOOOOO. Not too bad of an investment in my mind.

I could have put the 11K in a bank and made 4% or in the market and made 10% but it just would not have been as much fun.

Unless you could find a buyer on your own willing to pay $93 per point, you would have to hand over a good chunk of that "profit" to a broker. Many charge 10% and more to handle timeshare properties.

 

[senecabeach]

oooopsss