First Riviera ROFR

[eticketplease]

Purchasing resale RIV is a reasonable low cost option if you are under 50 y/o and have a $15k budget to spend and want to go to WDW a week. Over the long haul it will be the Epcot low cost option. It is currently priced the same as BW with an additional 28 years of use.

Yes low cost option but you have to increase your costs as it does require more points. Depends on the season but sometimes the difference is significant.

 

[Mouseforward]

That works both ways though...

The resort is barely 5 years old. Arguably not a lot of sellers now with average ownership length of ~3 years (some bought last year, some bought 5 years ago). There will be a lot more inventory on the market in 4-6 years, once more original owners who bought earlier on sell for natural reasons like kids growing up, geographic move etc.

We will see an increase when the 10 year loan people have the ability to sell without bringing cash to the table. That will be around 8 years from the first sales.

 

[eticketplease]

I’m not sure direct sales have much impact on the supply side of resales. New direct buyers are going to be buying DVC’s newest offering not a resale. What will ultimately likely impact supply & thus price is the size of the resort - there’s a reason that SSR resales are so prevalent & cheap & VGC are so rare & expensive - there’s a lot of the former & very few of the latter.

Just to add on to this as this is why you will also see a lot of the same size contracts. It is generally what the minimum amount required at the time that the resort was being sold.

 

[Mouseforward]

Yes low cost option but you have to increase your costs as it does require more points. Depends on the season but sometimes the difference is significant.

It will be the lowest points in the Epcot area in 2042.

 

[eticketplease]

It will be the lowest points in the Epcot area in 2042.

True but you were comparing costs to BW. So while the sales price might be the same, RIV tacts on the 3% Foreign Transaction fee in terms of point costs.

Not saying it is a bad deal just that it is slightly higher but imo much nicer.

 

[BeachClub2014]

The impact of resale restrictions on the current market price for Riviera resale contracts has been discussed and debated since the first resale contract hit the market. Do the resale restrictions have an impact? Probably. Having said that, the actual impact is purely a matter of speculation and opinion. People will often point to Riveria having a relatively low resale price and attribute the restrictions as causation, which ignores a bunch of other variables that can, and will, impact the price.

 

[SugarSweetLee]

Sure - but if you're starting 45% down after 10 days, it's unlikely to get much better.

I don't know about others, but I'm happier to pay $330 direct for VGC knowing I can resell it in 1-3 years for 75%-80% of that amount, than I am to pay $180 for Riviera knowing I'll be lucky to get 50% back.

To be fair, you have no idea what the going rate for Riviera will be in 5-10 years when it is sold out.

 

[SugarSweetLee]

Duplicate

 

[Sandisw]

Sure - but if you're starting 45% down after 10 days, it's unlikely to get much better.

I don't know about others, but I'm happier to pay $330 direct for VGC knowing I can resell it in 1-3 years for 75%-80% of that amount, than I am to pay $180 for Riviera knowing I'll be lucky to get 50% back.

I paid $152 and $162 for my RIV points. My guess is I can sell between $115 and $120 today after 6 years of use.

This is about 75% back? Obviously people buying today will take a larger loss than those of us who bought earlier on.

For us, owning where we want to be has been well woth the resale value loss. I’d even say that if I was at $100/point now and my loss is close to 40%…

However, I’d personally never buy a resort I didn’t want to be at even if it meant my potential for selling.

Obviously if one has no real preference then buying PVB right now over RIV gives you the potential for a better return.

 

[MattB2G]

Resale value of RIV contracts were discussed long before the first resale contract for RIV made an appearance. Once the resale restrictions on the contracts were known before direct sales started, the discussions started. Seems that the resale value has come in a little below what most people thought that it would come in at.... from what I remember. But I think it is still early to get a true value of what the RIV resale contracts will be set at since it is still not sold out.

I think depending on how the new Lake Shore Resort enters into DVC (hoping it isn't part of the Trust with the Cabins), will put more pressure on RIV resale value because "everyone" likes to stay at the new resorts, and RIV will no longer be the new kid in school at that point.

 

[Dodgerburt8]

I think price of Riviera, like just about every other resale DVC for the past five years, will drop once it stops active sales.

There is a very strong reason to at least question whether Riviera will be different based on resale restrictions. To even stay there on points you will have to own there or use direct points. That makes it unique from every other DVC for the past 5 years. I personally speculate that RIV will maintain a similar delta to what it currently has to the other resorts. The resale market will move up or down (probably down) and Riv will move with it. Because the market is already pricing in the resale restrictions, I expect it to consistently sell for about $15-20 more than SSR/AKV and for about $45 less than PVB/VGF. Relative annual dues will also have an impact. But I’m just guessing.

 

[Sandisw]

I can assure you, I have less than 10% of the facts and zero expertise.

But no, I'm assuming RIV sells out within the next 12 months, I think resale RIV contracts bump up in price. I have no idea what happens 17 years from now.

My feeling is that when RIV is sold out that the resale value will at the very least stabilize.

Some of us predicted that RIV would never sell for more than $100 right out of the gate.

It did though and 6 years later, it seems to be averaging closer to $115 to $120.

So, the loss right out the gate is pretty high but it’s only a paper loss…all that matters is what happens when you sell.

Once sold out, someone who wants home resort at RIV has only two options…pay $275 direct…or buy resale.

If the person wants RIV, then why won’t they pay $120 or $130 for it vs $275 direct.

It really does come down to how important it is to be at a restricted resort.

For us, being at RiV is simply more important then the potential resale value down the road.

 

[DanCali]

To be fair, you have no idea what the going rate for Riviera will be in 5-10 years when it is sold out.

No, I don't... But I do know what happened to resort resale prices when other developers implemented these types of restrictions (it wasn't pretty) so I can make an educated guess based on that.

 

[muppets3d]

No, I don't... But I do know what happened to resort resale prices when other developers implemented these types of restrictions (it wasn't pretty) so I can make an educated guess based on that.

Not comparable at all. Do any of those other developers operate within the Central Florida Tourism Oversight District?

 

[stat]

One interesting comparison in my mind is BWV. I'd guess that the majority of people paying $100+ for a mere 16 years of life left are treating those contracts as if they were restricted points. That gives me hope that resale Riviera (nearly triple the years left) will have a decent floor on the pricing. A Disney resort (even a contract purchased for a single resort, whether functionally or legally) has a tangible value that keeps resale from going to zero IMO. Perhaps roughly the premium the people are paying for DVC over other timeshare systems.

In the end, I'd bet resale RIV will hold up better than many are predicting, but it really won't matter in 20+ years since I'll be well past my break even point.

 

[Carouselofplanning]

The impact of resale restrictions on the current market price for Riviera resale contracts has been discussed and debated since the first resale contract hit the market. Do the resale restrictions have an impact? Probably. Having said that, the actual impact is purely a matter of speculation and opinion. People will often point to Riveria having a relatively low resale price and attribute the restrictions as causation, which ignores a bunch of other variables that can, and will, impact the price.

It’s a well built, intimate resort with a nice location and a unique transportation option. It has solid dining. The rooms are gorgeous. People complain it’s not an extravagant pool complex and that the building isn't colorfully painted. Bottom line the common negatives cited of the actual place are miniscule. It also still feels very new. The resale price is alarmingly low for being so new and so deluxe. That’s because of what. Exactly.

 

[DanCali]

Some of us predicted that RIV would never sell for more than $100 right out of the gate.

It did though and 6 years later, it seems to be averaging closer to $115 to $120.

There are contracts out there with asking prices sub $110 that are sitting on the market. So whatever brokers (who have incentives to report high numbers) are advertising about "average selling prices", I'm not sure I buy it - no pun intended. I suspect a non-loaded/non-stripped contract averages $100-$105 nowadays, and that we may see more ROFRs in the high $80s or low $90s when there are motivated sellers.

My feeling is that when RIV is sold out that the resale value will at the very least stabilize.

Once sold out, someone who wants home resort at RIV has only two options…pay $275 direct…or buy resale.

If the person wants RIV, then why won’t they pay $120 or $130 for it vs $275 direct.

Because it's not the same product. One if fully functional and the other is purposely engineered to lack functionality all owners value... The market for owners who want a timeshare and never trade out to a different one is probably very limited.

My guess is that IF THE PRICE WAS EQUAL a lot of those who think they want Riviera as a top choice, would "settle" for BLT, VGF, or POLY and have access to 14 resorts for at least 10-15 years (and 8 resorts for ~2 decades after that) than stick to Riviera, and only Riviera, until they die or until 2070. And, if that's the case, the price will have to stabilize at a much lower level to reflect those two different product types that will be on the market.

It really does come down to how important it is to be at a restricted resort.

For us, being at RiV is simply more important then the potential resale value down the road.

You are an informed buyer, and made an informed decision based on your preferences.

But if you put yourself in the shoes of a the resale buyer looking at an array of resale contracts at "sold out resorts", it's hard to ignore that the O14 contracts have a strong advantage over the restricted ones, and one that will last for decades. That's why I don't expect the restricted ones to sell at similar prices in equilibrium.

 

[Carouselofplanning]

One interesting comparison in my mind is BWV. I'd guess that the majority of people paying $100+ for a mere 16 years of life left are treating those contracts as if they were restricted points. That gives me hope that resale Riviera (nearly triple the years left) will have a decent floor on the pricing. A Disney resort (even a contract purchased for a single resort, whether functionally or legally) has a tangible value that keeps resale from going to zero IMO. Perhaps roughly the premium the people are paying for DVC over other timeshare systems.

In the end, I'd bet resale RIV will hold up better than many are predicting, but it really won't matter in 20+ years since I'll be well past my break even point.

This all leads to another question. Does DVC really use ROFR to “set floors”? I think they use this to buy up cheap points in sold out resorts to repackage and sell back to buyers. Other than resorts in active sales I’m starting to think they don’t care about floors. Curious what experienced timeshare people think.

 

[BeachClub2014]

It’s a well built, intimate resort with a nice location and a unique transportation option. It has solid dining. The rooms are gorgeous. People complain it’s not an extravagant pool complex and that the building isn't colorfully painted. Bottom line the common negatives cited of the actual place are miniscule. It also still feels very new. The resale price is alarmingly low for being so new and so deluxe. That’s because of what. Exactly.

Because of what, exactly? Nobody knows for certain. There's lots of speculation but no real causal evidence. It could be location. It could be theme. It could be the small lobby. It could be the skyliner. It could be the pool. It could be the grey building. It could be the views. It could be resale restrictions. It could be all of the above.

My point is that nobody can say with any authority that the restrictions on resale contracts are the determining factor in setting the market price.

 

[stat]

This all leads to another question. Does DVC really use ROFR to “set floors”? I think they use this to buy up cheap points in sold out resorts to repackage and sell back to buyers. Other than resorts in active sales I’m starting to think they don’t care about floors. Curious what experienced timeshare people think.

I don't believe so. I used the term to mean a natural floor based on organic demand, not something artificial. That said, ROFR can help provide price support but I agree with others who'd say this is an indirect effect and not Disney's actual strategy.