DVC Podcast - Not Great Advice

[seven4520]

Hi!

I'm new to the board, but I just caught up on all of the DVC eps of the DIS Unplugged podcast and I felt it necessary to comment on something that was said a few times and that I strongly disagree with and I think is factually inaccurate.

Both Pete and Jerry said that DVC points don't lose their value and should be considered an investment.
Yes, if you bought into DVC in the 90's and went to resell those points today, you'd likely see an appreciation in the per point value. However, for new buyers to look at DVC points as an investment which will appreciate and never lose value is a dangerous way of thinking and borders on financially irresponsible. If you buy Copper Creek today at $188 / point direct from Disney, it's currently reselling for between $145 - $165, which is between 10-20% LOSS of value.

Additionally, the rights of DVC resale owners are continuously being reduced, which further drives down the value of the points.

Overall, I just thought it necessary to chime in, in case someone was less well-versed in DVC was going to make a purchase based on the rationale that DVC points are a good investment strategy. While they do retain some value, unlike most other timeshares, the expectation that one will be able to cash-out after a few years and make money is not sound financial advice.

 

[cvjw]

Very much agree! We purchased our points 10+ years ago for a third of the direct price today. They have turned out to be a great investment for us. But, if I purchased them at today’s direct prices, you are almost assured to lose money when you sell.

Then, throw in the new resale restrictions on Rivera resort and those resale prices should go even lower.

 

[Lumpy1106]

Not to mention...
The contracts don't last forever. Right now if you buy resale, you could go on trips for the next 3-5 years and realistically re-sell the contract and only be out the maintenance fees for those trips - will probably come out ahead in fact. That's what makes DVC so much better than all of the other time shares. At some point you will see the DVC value go down as the contracts approach their end dates and that will no longer be true. Frankly I think we are just starting to see this with the 2042 properties.

 

[GAN]

Very much agree! We purchased our points 10+ years ago for a third of the direct price today. They have turned out to be a great investment for us. But, if I purchased them at today’s direct prices, you are almost assured to lose money when you sell.

Then, throw in the new resale restrictions on Rivera resort and those resale prices should go even lower.

Sure ....most of us thought the same thing 10-15 years ago when we bought in. It's no different today, ask the same question in another 10-years.

Both Pete and Jerry said that DVC points don't lose their value and should be considered an investment.
Yes, if you bought into DVC in the 90's and went to resell those points today, you'd likely see an appreciation in the per point value. However, for new buyers to look at DVC points as an investment which will appreciate and never lose value is a dangerous way of thinking and borders on financially irresponsible. If you buy Copper Creek today at $188 / point direct from Disney, it's currently reselling for between $145 - $165, which is between 10-20% LOSS of value.

Additionally, the rights of DVC resale owners are continuously being reduced, which further drives down the value of the points.

I've never considered DVC a financial "investment" and I think you may be taking Pete and Jerry's comments a little out of context ...I would consider it an "investment" in future vacations. I think(and I could be wrong) they both understand that at some point in time the contract reaches an age where you will get less than you "invested" if you were to sell. But the point there is you've already gained value from vacations you've taken -so is that truly a loss? I'm 15-years into my contract and I can say I've gotten close to every nickel back that I paid. If I sold today, I would get all my money back that I paid except for maintenance fees -and those fees have been offset through renting my points out to other people. I feel like the people buying in today will be able to say the same thing I am in 15-years. I understand your point and not being critical -one; it's not for everyone and two; it's not a financial investment by any means.

Now, has DVC "jumped the shark"? That's a question for @WebmasterPete and another show!

 

[WebmasterPete]

I'd have to go back and watch, but if I said I considered DVC an 'investment' than I misspoke. In fact, I don't think of it as an investment and I've been asked that directly a number of times in recent weeks. I do feel that it holds its value - and that if you buy in (even today) and decide in 5 or 10 years (historically speaking) and decided to sell, that you could recoup a decent part of your original purchase price.

 

[Ron from Michigan]

Sure ....most of us thought the same thing 10-15 years ago when we bought in. It's no different today, ask the same question in another 10-years.



I've never considered DVC a financial "investment" and I think you may be taking Pete and Jerry's comments a little out of context ...I would consider it an "investment" in future vacations. I think(and I could be wrong) they both understand that at some point in time the contract reaches an age where you will get less than you "invested" if you were to sell. But the point there is you've already gained value from vacations you've taken -so is that truly a loss? I'm 15-years into my contract and I can say I've gotten close to every nickel back that I paid. If I sold today, I would get all my money back that I paid except for maintenance fees -and those fees have been offset through renting my points out to other people. I feel like the people buying in today will be able to say the same thing I am in 15-years. I understand your point and not being critical -one; it's not for everyone and two; it's not a financial investment by any means.

Now, has DVC "jumped the shark"? That's a question for @WebmasterPete and another show!

I'd have to go back and watch, but if I said I considered DVC an 'investment' than I misspoke. In fact, I don't think of it as an investment and I've been asked that directly a number of times in recent weeks. I do feel that it holds its value - and that if you buy in (even today) and decide in 5 or 10 years (historically speaking) and decided to sell, that you could recoup a decent part of your original purchase price.

We have been DVC members for 11 years now and with 3+ trips each year I feel we have gotten our investment back on all the trips we have taken. We bought into AKL when prices were much lower than what we are seeing now. I just wish we had bought into DVC much sooner.

 

[PamNC]

I took that as it's an investment on future vacations - not for making money.

 

[WebmasterJackie]

I took that as it's an investment on future vacations - not for making money.

 

[SorcererHeidi]

I took that as it's an investment on future vacations - not for making money.

Great point, @PamNC - Have had many friends/acquaintances who were owners over the years, and they have all said that very thing.

Kind of how I personally feel about Disney stock - I bought my first share many years ago - not as an investment (although if I sold today, it would be worth much more!). I bought it for sentimental, and "belief in the company" reasons, as well as wanting to have the beautiful certificates they used to give out.

 

[Nvrgrowup]

When we bought our DVC in 2001 at now called BRV we didnt consider it a financial investment where somewhere down the line we could make money. For us it was because of our love of Disney World and the frequent trips we would make with our family. It has given us so many wonderful memories . Would we make money if we sold ? Sure. Would we? No. We are so happy and feel fortunate that we had the opportunity to be able to make that purchase.

 

[TheMaxRebo]

I took that as it's an investment on future vacations - not for making money.

particularly if the accommodations that DVC provides match up with what you want/need from your Disney trips

If you plan / want to vacation frequently at Disney, stay on property, and ideally in larger/deluxe accommodations, then it makes a ton of sense (if you have the $) - and is, as you say, an investment now on those future trips

 

[hertamaniac]

I think the OP makes a valid point. If the restrictions on DVC owners on resale continues to grow, I would expect the perceived value would likely go lower.

We did the tour to purchase DVC a couple of years ago and really wanted to justify the "investment". But, when I investigated the overall financial market tendencies and real estate histograms, we decided to pass at this time.

 

[OKW Lover]

We originally bought in 1995 so that "investment" has well paid off for us. Our early add-on contracts are also good deals. I say that in terms of what I could sell for in today's market. More recent (past 1-4 years) add on contracts are underwater.

However, none of that matters to me. I bought DVC solely to use for stays at DVC resorts. I always looked at it as pre-paying my vacations. Still do. I've got contracts that won't expire until after I do. My heirs will hopefully get enjoyment out of them as well. If not, they will at least have an asset they can sell and use the money for whatever suits them.

 

[hertamaniac]

Yes, if you bought into DVC in the 90's and went to resell those points today, you'd likely see an appreciation in the per point value.

Would you? Would the $/point in the 90's actually equate to today's USD$/point? In other words, today's USD$/point might be on par with those that bought in 20 years ago.

 

[GAN]

Would you? Would the $/point in the 90's actually equate to today's USD$/point? In other words, today's USD$/point might be on par with those that bought in 20 years ago.

Assuming I'm understanding correctly, I’m not sure why anyone would buy into DVC expecting point values to be equal or more than when originally purchased over long-term. I can sell my contract for close to what I paid, if not equal, but how that translates to year-year value who knows....probably less? I think if someone(and I know people do) work an analysis down to how much you stand to lose if you invested the money rather than buy DVC, then chances are DVC isn’t for you. Just my opinion.

 

[Ron from Michigan]

We originally bought in 1995 so that "investment" has well paid off for us. Our early add-on contracts are also good deals. I say that in terms of what I could sell for in today's market. More recent (past 1-4 years) add on contracts are underwater.

That's exactly why we bought in. We would not be making 3-4 trips a year if we had not bought into the DVC.

However, none of that matters to me. I bought DVC solely to use for stays at DVC resorts. I always looked at it as pre-paying my vacations. Still do. I've got contracts that won't expire until after I do. My heirs will hopefully get enjoyment out of them as well. If not, they will at least have an asset they can sell and use the money for whatever suits them.

 

[hertamaniac]

Assuming I'm understanding correctly, I’m not sure why anyone would buy into DVC expecting point values to be equal or more than when originally purchased over long-term. I can sell my contract for close to what I paid, if not equal, but how that translates to year-year value who knows....probably less? I think if someone(and I know people do) work an analysis down to how much you stand to lose if you invested the money rather than buy DVC, then chances are DVC isn’t for you. Just my opinion.

Your validating my point to the quote I referenced. I definitely don't see an appreciation on the points/contracts. What I have seen is a partitioning of seasons for the value of those points. I also have seen restrictions on resales on the latest DVC resorts (and possibly all future ones). So I think the OP is correct in stating the value of those points, restricted to the 14 DVC properties, has a good chance of going down especially as contract terms are nearing the end.

I guess the question I have is there a cap/limit on the number of points that can be increased year-over-year at the current 14 resorts? If Disney merely increases the number of points more dramatically, doesn't that effectively lower the value of your contract? I'm just trying to understand the metrics.

 

[Captain Dan]

particularly if the accommodations that DVC provides match up with what you want/need from your Disney trips

If you plan / want to vacation frequently at Disney, stay on property, and ideally in larger/deluxe accommodations, then it makes a ton of sense (if you have the $) - and is, as you say, an investment now on those future trips

_______

Hi Pete -

Am I allowed to disagree with Max? The DVC accommodations (studio) at Poly are not larger than the rooms in the original longhouses. I have looked at DVC 10 ways including sideways and blind folded with a mouthful of pixie dust. Financially it does not make sense for Poly people to convert to DVC. When DVCers attempt to convince me, they never include the added cost of the yearly fees.

When we stay at poly we are getting great value for our money. My stress and anxiety in life evaporates instantaneously when I step of the Magical Express, hear the music and the water, walk straight through the lobby and get my first hit of Dole Whip!

#polytothepeople

 

[OKW Lover]

I guess the question I have is there a cap/limit on the number of points that can be increased year-over-year at the current 14 resorts?

Disney cannot increase the total number of points needed at a particular resort in a year. Points per night can be re-allocated within the resort, but the total number of points remains the same.

 

[TheMaxRebo]

_______

Hi Pete -

Am I allowed to disagree with Max? The DVC accommodations (studio) at Poly are not larger than the rooms in the original longhouses. I have looked at DVC 10 ways including sideways and blind folded with a mouthful of pixie dust. Financially it does not make sense for Poly people to convert to DVC. When DVCers attempt to convince me, they never include the added cost of the yearly fees.

When we stay at poly we are getting great value for our money. My stress and anxiety in life evaporates instantaneously when I step of the Magical Express, hear the music and the water, walk straight through the lobby and get my first hit of Dole Whip!

#polytothepeople

you definitely can disagree with me and don't need Pete's permission

and maybe for standard rooms at Poly that is the case - but thinking more in general about staying at the larger size rooms especially in Deluxe accommodations

But I also am the wrong person to ask as I think all of this is way over priced and 99% of the time we stay off property so the "value" of any of this is not apparent to me