First time buyer ? & which is better?

[snyderla]

DH & I are thinking of buying, but I'm wondering which is the better deal...resale or new SSR in the long term. I mean, I may only use it myself for 30 more years or less, but my grandkids will use it longer. I know someone out there has already done the math! Can you help me out? In the last 10 years, DH & I have been to WDW 9 times, but would go more if we owned. Actually, in the last 3 yrs we've gone 5 times! So I think DVC is the way to go. We don't have a spotless credit history, so I don't know how that will go. I know SSR points last longer than the other resorts, so I was wondering if that makes us for the price difference.

Also, can a first time buying get any other resort than SSR through Disney? How does that work?

Thank you for your help!

Lori

 

[disneyberry]

<font face="times" size="+0">I'm going to attempt some convoluted math here. (I call this convoluted because IMO there really is no way to truly valuate which one is "the better deal")

Assumptions:
Pay cash for your purchase (no financing, so no interest costs)
Contract size = 150pts
SSR price = $85/pt
BWV price = $74/pt
Resale closing costs = $450
SSR remaining life = 50 years
BWV remaining life = 38 years
Dues Increase Rate = 5%
Own DVC for entire lifespan
General Inflation is Zero (yeah right)

Capital Costs:
SSR = $85 x 150pts = $12,750
BWV = $74 x 150pts + $450 = $11,550

Dues Costs Over Lifespan:
SSR, 50 years of dues, forecasted out at 5% increase each year = a whopping $125,881
BWV, 38 years of dues, forecasted out at 5% increase each year = a whopping $72,239

Total Cost:
SSR = $12,750 + $125,881 = $138,631
BWV = $11,550 + $72,239 = $83,789

Divide Total Cost By Years:
SSR = $138,631 / 50 years = $2,772/year
BWV = $83,789 / 38 years = $2,205/year

BWV is thus "cheaper" using this "math".

Okay, I don't really agree with the concept of the above math (besides, it's quite flawed w/ no TVM accounted for), but I've seen a lot of people calculate it this way, so in anticipation of that, I thought I'd lay it out first.

Basically, you have to remember that the big bulk of your costs of owning DVC will be your dues over the lifetime of your ownership. So, obviously SSR will be more expensive.

I think you can't dwell on this kind of valuation too much, and other factors should be more important. Things such as which resort do you like better, which resort will be better for your family, etc. Also, how do you know your family's future generations will even WANT to vacation at WDW? There is no way you can know that.

I'll post back as I think of other factors, but that's just off the top of my head.
Hope this helps!</font>

 

[tjkraz]

A lot of the answer to this question depends on how you want to look at it. If you spread the costs out evenly over the number of years on the contract, you will get something similar to this:

Saratoga Springs = $1.73 per year ($85 per point / 49 years)
Other resorts (resale) = $1.97 / year ($75 net per point / 38 yrs)
Other resorts (direct) = $2.34 / year ($89 per point / 38 yrs)

Yes, DVC will sell you points at any of the sold-out resorts, but financially that is pretty much the most expensive route you can take.

That leaves SSR vs. resale. Now, if you use a straight-line method such as the above, SSR appears to have the advantage. However, anyone who works in finance for a living will tell you that $1 today does not equal $1 in 2054. If you take into account the time value of money, opportunities lost, blah, blah, blah, the resale should come out ahead.

Confused enough?

If there is one DVC resort that you love above and beyond the rest, then you most definitely want to buy there. However, if you don't mind trying all of the resorts over the years, or if you will rarely book your stays more than 7 months before the travel date, your Home resort doesn't matter much.

DVC will make it very easy for you to buy SSR. They can finance if neccessary. And you can literally book your first stay in the same phone call as when you call and commit to buy.

Resales take a bit more effort. DVC has Right of First Refusal on resales. If you negotiate a contract, they can basically steal it out from under you at the terms you negotiated. The seller gets his / her money from DVC, and you start out all over again. And, to complicate matters, about a week ago DVC started getting more aggressive in exercising its ROFR. And, note that you also need to pay cash or arrange your own financing on a resale.

Unfortunately there is no real clear-cut equation to determine which route is best in each situation. Digest all of that info, and the other advice you will get here, and decide where to go.

 

[Beca]

I think DVC may start actively selling "sold out" resorts to new members. I know Byron got a BWV contract for a new member in June. If you do not have a guide, you might ask for him and see. Here's a link to the thread that talks about it.
http://www.disboards.com/showthread.php?s=&threadid=590504&highlight=+Byron

Good luck,






Beca

 

[Deep-Thots]

This topic was raised a while ago. Here's the link to that thread:

http://disboards.com/showthread.php?s=&threadid=338313&highlight=+maintenance++fee++history


It has some information that you might find useful, and it's not a terribly long thread.

 

[disneyberry]

<font face="times" size="+0">Actually, if you want to know about Dues History, in addition to the link that Deep-Thots posted, you can click on the "DVC Dues History + Analysis" link in my sig. </font>

 

[spiceycat]

if you buy where you want to stay most of the time - then cost wise it may not make sense - but emotional you will be happy!!!

you won't have to try at 7 month to change and you know you will always get your favorite place.

 

[snyderla]

Thank you for your answers. I was sure I wasn't the first to think of this! I appreciate the feedback.

DH & I have stayed at OKW, in a 2BR with his parents & my parents were in a studio. I have seen the BCV 1BR & studio. I prefer the size of the OKW, but like the location of BWV. I like WL, but don't think I would want to buy at VWL. And I don't think the location of SSR is for me.

We don't usually plan our trips very far in advance, except the family reunion sept. '05, but that doesn't count. The farthest out so far was a trip that we had others going with us & we picked our place to stay in march for the trip in oct. A 7 month window is fine for us mostly. I don't think we would go during a time of year where location would be a problem. Plus we like to stay at different places for now.

I already have grandkids, they are only 3yrs & 16months old, but they sure do want to go to WDW right now! The 3 yr old wants to live with Cinderella in her castle & marry the prince! My daughter, they are her kids, loves WDW. My son, who has no kids & most likely won't, Likes to go there, too, but not as much as the rest of us! I have also hooked my in-laws. So I'm sure we will us it for years to come. Assuming there are years to come, of course!

I think I will follow up on some of the thread links and re-read these posts before talking to DH about it again.

Thanks again!

Lori

 

[POOH&PIGLET]

Which is the better deal? I don't know. However, I also think you should buy where you most want to stay.

 

[dianeschlicht]

since you prefer to not plan far in advance and like the large accommodations, I would buy a resale at OKW. That way you will most likely have the availability, low dues, and can always try to trade out to BWV or BCV when you want to plan ahead a little.