For People Considering Buying Retail...

[Antonette2128]

Sorry I meant resale but i don't know how to change the title. Do the earlier expiry deter you from buying from certain properties?

I am 36 and really interested in BCV but I would only 62-63 when it expires. Am I wrong to not want to buy BCV and just go for the newer properties?

Any input would be appreciated

 

[supersnoop]

Retail versus resale doesn't affect the end date. You can pay direct prices for BCV and it will still have a 2042 expiration.

Do you really expect to hold onto the contract for 28 years? Does the price difference between retail and resale fairly value the extra years?

 

[chalee94]

a lot can change between now and 2042 for both you and disney. if i really wanted to stay at BCV, i would buy BCV.

if you are happy staying at a newer resort, buy there for the extra years (resale is still the best deal except for the very newest resorts) and see how trading for BCV some years works out...but don't count on getting BCV every time...

 

[ziravan]

I bought at BCV last year. No regrets.

I took your concerns into account. Staying where I wanted to stay was more important to me.

Besides, once you get involved with DVC and understand the system, your first purchase probably won't be your last.

Sure, BCV expires when I'm 74. But. The Poly points I just bought don't expire until I'm 98. So, I'm good to go.

 

[GrumpyInPhilly]

We purchased BCV when we were 57 & 54. It will expire when we're 87 & 84. We may not get full use of it but our kids will. We bought where we wanted to stay. I think that's the most important consideration.

 

[Dean]

Sorry I meant resale but i don't know how to change the title. Do the earlier expiry deter you from buying from certain properties?

I am 36 and really interested in BCV but I would only 62-63 when it expires. Am I wrong to not want to buy BCV and just go for the newer properties?

Any input would be appreciated

I wouldn't let the RTU expiration deter you from buying per se but I would take it into account somewhat in terms of pricing and $$ value. I think the difference between 2042 and something later is fairly large, from 2054 to 2057 or 2057 to 2060 as negligible. Worst case scenario is you lose it to RTU and buy something else. Whether they'll offer an extension or not is unknown and if they do, we don't know if it'll be a reasonable one (OKW's wasn't). Do compare BWV to BCV if that's your focus, BCV is can be as much as 30-35% more expensive than BWV when you include both the higher purchase price and the BWV standard view option. Looking at BCV as 20% more is very conservative, IMO. There is currently no EPCOT option that has a later RTU expiration.

 

[NH Disneyfan]

I consider DVC an investment. Not the type of investment where I intend to make 10% annually, but I anticipate it is an investment in family and time off and doing things that make us happy. This said, I don't want to lose my shirt so I'm not open to seeing a DVC contract expire. This is the exact reason I'm selling my 2042 expiring OKW contract and just purchased a 2060 expiring GCV contract. GCV is increasing in value with more years and OKW is maintaining value with less years. OKW is at WDW where more resorts are being built, GCV is at Disneyland, a highly desired location. It is real estate with an expiration - make smart decisions. (I love staying at Disneyland - so this weighed heavily too)

Once the expiration date makes contracts no longer attractive to buyers, the value is likely to plummet and owners will be stuck with annual fees (increasing every year) with no way out. Something to think about - whether you like staying there or not.....

 

[NH Disneyfan]

Higher prices with later dates could be cheaper contracts than lower prices with earlier expiration. You need to take the total cost (price + closing + financing) and add up all points until expiration. Divide cost by total price and you have a per point value. Add annual fees and you have total per point cost. Bounce this up against the $11.25-13 per point rental market - are you making money or losing? This calculation will tell you a lot.

(note: I realize I'm not considering future value of money or any investment calc here....keeping it simple)

 

[ziravan]

I consider DVC an investment. Not the type of investment where I intend to make 10% annually, but I anticipate it is an investment in family and time off and doing things that make us happy. This said, I don't want to lose my shirt so I'm not open to seeing a DVC contract expire. This is the exact reason I'm selling my 2042 expiring OKW contract and just purchased a 2060 expiring GCV contract. GCV is increasing in value with more years and OKW is maintaining value with less years. OKW is at WDW where more resorts are being built, GCV is at Disneyland, a highly desired location. It is real estate with an expiration - make smart decisions. (I love staying at Disneyland - so this weighed heavily too)

Once the expiration date makes contracts no longer attractive to buyers, the value is likely to plummet and owners will be stuck with annual fees (increasing every year) with no way out. Something to think about - whether you like staying there or not.....

Disney can't afford to let the bottom fall out of the resale market. It's one of the major ways in which DVC distinguishes itself from other timeshares: it holds value. Besides, there is a relationship between resale and retail prices. Yes, other timeshares sale 20k plus contracts that can be bought on Ebay resale for a few bucks, but they must use high pressure sales to do so.

Disney will use ROFR to keep prices up, and they will eventually make extensions available.

Look at the proposed expansions of VWL and BCV. They will have to sell new with 50 year contracts. Disney can't lose half of its MF payers halfway through those new contracts. They'll have to bring those other points along. Keeping the current owners will be easier then trying to resell a 40 yr old resort as new in 2042.

When I bought BCV, I made the calculation that extensions would be offered down the road (either with the rollout of new points with expansion or around the 15 year mark (2027) where resale prices will start to really get squeezed). If I'm wrong, 27 years at BCV for $84/point was still a bargain.

I don't think I'm wrong.

Even if DVD decides to tier off expansion into a technically different home resort, the option will still exist to sell 2042 points and then buy 2069 points and be at Beach Club for cheaper than whatever the direct price will be (and until I'm older than 100). No matter how I looked at it, the downsides to buying a 2042 resort wasn't a serious factor in my purchase. This is a problem that will have a solution when the right time comes.

 

[JimMIA]

Disney can't afford to let the bottom fall out of the resale market. It's one of the major ways in which DVC distinguishes itself from other timeshares: it holds value.

First of all, DVC is certainly not the only timeshare that retains some value...although most don't. There are others which do better than the rest of the pack.

Secondly, the threat of ROFR is more psychological than economic, but to the degree that it's effective it does help DVC sales. However, I think the real reason DVC retains value is that it is a preciously-rare commodity with a lock on a very attractive market. It's the only onsite timeshare at WDW, and nobody else can make that claim or deliver that product.

Limited supply, high demand, economic support for resale values. Simple Economics 101.

Yes, other timeshares sale 20k plus contracts that can be bought on Ebay resale for a few bucks, but they must use high pressure sales to do so.

Yes they do. SHAME on them -- SHAME, I say!!! Actually, I guarantee that nobody cares what the sales tactics are, as long as sales result. High pressure ain't pretty -- and it wouldn't work on me -- but it does produce sales.

And BTW, $20K is NOT a large timeshare sale in the non-DVC world. Sales of greater than $100K are not that unusual. It's sad to look at some of the listings on eBay where someone who has $60-$100K sunk into some timeshare and you see comparables right next to it for $1.

Look at the proposed expansions of VWL and BCV. They will have to sell new with 50 year contracts. Disney can't lose half of its MF payers halfway through those new contracts. They'll have to bring those other points along. Keeping the current owners will be easier then trying to resell a 40 yr old resort as new in 2042.

I tend to be negative on extensions, but this point is very valid, and this is the first time I've seen this raised.

 

[Dean]

Disney can't afford to let the bottom fall out of the resale market. It's one of the major ways in which DVC distinguishes itself from other timeshares: it holds value. Besides, there is a relationship between resale and retail prices. Yes, other timeshares sale 20k plus contracts that can be bought on Ebay resale for a few bucks, but they must use high pressure sales to do so.

Disney will use ROFR to keep prices up, and they will eventually make extensions available.

Look at the proposed expansions of VWL and BCV. They will have to sell new with 50 year contracts. Disney can't lose half of its MF payers halfway through those new contracts. They'll have to bring those other points along. Keeping the current owners will be easier then trying to resell a 40 yr old resort as new in 2042.

When I bought BCV, I made the calculation that extensions would be offered down the road (either with the rollout of new points with expansion or around the 15 year mark (2027) where resale prices will start to really get squeezed). If I'm wrong, 27 years at BCV for $84/point was still a bargain.

I don't think I'm wrong.

Even if DVD decides to tier off expansion into a technically different home resort, the option will still exist to sell 2042 points and then buy 2069 points and be at Beach Club for cheaper than whatever the direct price will be (and until I'm older than 100). No matter how I looked at it, the downsides to buying a 2042 resort wasn't a serious factor in my purchase. This is a problem that will have a solution when the right time comes.

Disney doesn't care about resale price, only selling retail. Many other timeshares sell when their product is worth pennies on the secondary market. Most don't research this area. Historically the ROFR has only established somewhat of a floor for sales prices roughly half the time. All it really does is prevent the fire sale situation. DVC doesn't have to offer extensions unless they roll a new option into the old resort matrix, they could just as easily make any new option a completely separate and new resort. For THV they should have IMO. As for extensions, DVD has painted themselves into a corner with the OKW debacle. They'll have to do any future extensions far different than that experiment to avoid a major pushback. There certainly are ways they could do so but that most likely means something like an extension tied to a new purchase or very late in the RTU timeframe.

 

[ziravan]

Disney doesn't care about resale price, only selling retail. Many other timeshares sell when their product is worth pennies on the secondary market. Most don't research this area. Historically the ROFR has only established somewhat of a floor for sales prices roughly half the time. All it really does is prevent the fire sale situation. DVC doesn't have to offer extensions unless they roll a new option into the old resort matrix, they could just as easily make any new option a completely separate and new resort. For THV they should have IMO. As for extensions, DVD has painted themselves into a corner with the OKW debacle. They'll have to do any future extensions far different than that experiment to avoid a major pushback. There certainly are ways they could do so but that most likely means something like an extension tied to a new purchase or very late in the RTU timeframe.

I agree that an extension will either be tied to the new points in expanding DVC at a resort, or will come late enough in the RTU cycle that the resale market is actually being affected by the 2042 date.

With OKW, the decreased value of unextended points was a theoretical threat decades in the future. Very few people will write multi-thousand dollar checks for that. But. 15 years out, with resales plummeting in comparison with later end date resorts... Many more people will be willing to write that check, just to preserve future value. At the point, the benefit of increased resale value will outweigh the cost to avoid total loss. Even if owners decided not to keep BCV, it would be more cost effective to extend and sell then to let expire.

 

[Antonette2128]

Thank you all for your responses. Lots to think about it for sure. I appreciate all the insights on the system

 

[Dean]

Many more people will be willing to write that check, just to preserve future value. At the point, the benefit of increased resale value will outweigh the cost to avoid total loss. Even if owners decided not to keep BCV, it would be more cost effective to extend and sell then to let expire.

We'll see, it depends on specifics and DVD has a history of being overly optimistic in such areas. There were several problems with OKW including lead time, price (way too high) and the heavy handed process. IF they tie in an expansion to the existing resort they will have to offer some type of extension but there's no reason they couldn't just do a "new resort" at the same location, timeshares do it all the time.