DVC re-sale value

[wls23]

just curious - how can one expect to resell this at a future point for at least the same price (if not more) than i paid originally if the number of years remaining (2042) is decreasing? (i.e. if I buy DVC now, I would have 38 years until the 2042 expiration, and if i sold it in 10 years from now, there will only be 28 years remaining, so how is it possible to break even?

 

[WolfpackFan]

Probably not possible; why would you expect it to be? Nobody should ever join DVC as a financial investment. Rather it should be viewed as a pre-paid vacation IMO.

 

[Disney4ever4569]

I agree. It should not be looked at as an investment. I also agree that the answer to the question is that it will not increase in value as time goes on. As long as there is strong demand for DVC your ownership will be worth something and people will want it. You have to recognize that everytime you use your points or rent them, you are getting value back on your initial investment and after a certain period of time it will have paid for itself and if you sell later any money you get for it is just the gravy.

 

[calypso*a*go-go]

DVC will keep increasing the price to buy from them, WDW will keep increasing hotel rates, inflation...inflation...inflation!!! With a little luck, that will be the silver bullet that keeps resale values at a level that you could get some -- if not all of your original investment back.

 

[tjkraz]

The only thing guaranteed about DVC is that you will get to utilize WDW resort accommodations for the next 40-50 years (depending upon resort) equivalent to the number of points you purchase.

That's it.

DVC is not an investment--it is a prepaid vacation.

IMO, the single largest factor that currently contributes to resale pricing is DVC's exercising of ROFR. As long as they continue to buy-back contracts priced below a given threshold, resale prices will stay within a few dollars of that level.

But if DVC were to ever get out of the timeshare business, or if they simply chose to not build any more DVC properties, ROFR would end and prices could (emphasize COULD) plummet. Consumer demand would still set resale prices at some level, but it's impossible to predict what that level might be.

But you can also expect values of ownership to decline as those 38 years diminish. If most people purchasing DVC are at least in their late-twenties, a contract with 38 years remaining would at least carry those folks well into their 60s. But as the years remaining hits 25-30 years, those 2042 contracts will inevitably become less and less attractive.

If your goal for buying into DVC is to get a few years' worth of vacations out of it and then sell for some price approaching what you will pay, IMO you are taking a pretty big risk. Buy DVC because you want to stay at first-class accommodations in Orlando for the next four to five decades.

 

[nuthut]

Who knows? But I know one thing, I will not sell the points I purchased in 1995 for their original purchase price of $60, plus I have gotten 9 years of use out of them..... It's sure been a better investment than I thought possible plus we have enjoyed more than 30 trips to Disney on those points.

 

[Zurg]

"who know?" is a good point - buying as a financial investment is not a great idea.

the value is in going and getting a great resort for a fixed cost.

that said IMHO too much is made about the "out" years.

finance talks about the time value of money, the flip side is that value far down the road isn't worth a lot today. compound interest and such.

"in 10 years from now, there will only be 28 years remaining,"

how long is your mortgage? just a few extra buck a month buys you back those "out" years.

buying into DVC has been a great investment for our family. the returns have been in family time that can't be matched. The kids will remember it. they will bring their kids, they will remember it too - all in the 10 + 28 years.

seems like the point to me.

 

[Skip Wiley]

IMO, inevitably the resale prices will decrease. Resales will hold their value as long as the buyer can get enough vacations in to break even on the initial purchase. The closer to the end of the contract, the less time to vacation and reach that break even point. On the flip side, as resort costs go up so does the cost of non-DVC vacations, requiring fewer vacations to reach break even.

Of course other factors affect the break even point: how the points are used (weekday vrs. weekends), maintenance fees, the value associated with the better accommodations available through DVC, demand to visit WDW, etc. If in 2027 it costs $14,000 for a 200 pt BWV contract, but resort costs increase to the point where it’ll cost at least that much for an equal number of vacations over the 15 years left, there will still be demand from buyers.

For me, it’s not about the resale value of my purchase, I’d add on points as long as I feel I can break even before the contract expires. Once I buy a contract that money is gone, I’m just going to enjoy the vacations and not worry if I’m getting a good value by taking cruises, staying at resorts like Poly, or staying outside of DVC once in a while. Like the song “Spending Money” says:

I got no financial conscience.
Can't worry where it went.
A lasting treasure or a moment of pleasure
Worth it every cent.

If the vacations you get from DVC bring joy to you and your family, you made a great investment.