Help! I have 3 days to decide!

[Greenlawnsue]

I need help! We have signed a contract for 300 points at BLT. My window to change my mind ends Friday. I have never done anything like this before. No vacation clubs, no timeshares, only paid by the vacation. We vacation somewhere every year. The last few years at Disney in Oct. and the Florida panhandle beaches in the summer. My questions that are giving me an ulcer are:

- Is the price worth it in the long run? ($33,000 plus $1100 a year for 50 yrs!!!) yikes!

-If I want out, can I sell easily and not lose my shirt?

-Does anyone wish they had not done it?

With the stock market down and the economy like it is, am I crazy?

 

[CPTJAK]

I love DVC. Having said that I would not buy if I had the questions you have. You should cancel the contract and research and than decide. The price will not significantly change and there are tons of timeshare/vacation club options that may be better for you. Try researching Timeshares on the timeshare user group http://www.tug2.net/ find TUG BBS link and click on it for the discussion forum there.

If after extensive research fo the resale market and other timeshare groups (Marriott/Starwood/Hilton/Bluegreen/Wyndham/Hyatt/worldmark/etc..) you still want DVC than I would reccomend the following:

Buy the minimum number of points and than add on, make sure the resort you purchase is the one you want to stay at, plan on going to Disney at least 1 time every 3 years to make it worth your while,

 

[jschrots]

My DH and I went through the same thing. We put down deposits twice and both times changed our minds and backed out as we did not want to finance with the current market. ( I am a worry wort)

What we decided to do is " baby Steps". We just put a bid on a 50 point contract and are going to start small so that we can pay cash of our DVC. In a few years, hopefully when we save a bit more, we will buy more points.
We also have been researching DVC for about a year and see that the small contracts tend to sell quickly. So in the future if we ever do want to sell, we hope to sell the small contracts quickly. (Don't ever see us selling though as we are DISNEY NUTS!.......We love Mickey Mouses' House.. as my kids call it)

Right now, this is what works for us. You and your family need to decide what will work best for YOU!

In the end, I know that DVC is the way to go as we go to Disney about 4 times per year. So we will use our little 50 points for short 3 day trips and then spend the rest of the time at the Value Resorts as we love POP Century too!

Good luck!!

 

[tjkraz]

- Is the price worth it in the long run? ($33,000 plus $1100 a year for 50 yrs!!!) yikes!

If you are used to paying cash for Deluxe Disney accommodations, you'll make out like a bandit in the long run. Figure how far those points will go in a year, and how much you would pay cash for similar accommodations. Chances are with DVC you are vacationing for about $.40 on the dollar (rough guesstimate.)

-If I want out, can I sell easily and not lose my shirt?

As long as you hold the contract for about 4-5 years, you should do OK. Resale prices tend to be about $10-15 below DVC's sale prices. By 2013, DVC's price will probably be in the $120 neighborhood, meaning you could recoup your $107 (or close to it) in a sale.

Of course, that doesn't include broker commission on the sale, which runs at least 10%.

If you hold for a few years, you won't lose your shirt but you may not get every penny back. But what you will do over that time is save a lot on your Disney trips.

-Does anyone wish they had not done it?

You'll probably have a hard time getting an objective answer to that question on a DVC forum.

With the stock market down and the economy like it is, am I crazy?

Not as long as your finances are stable. If you are a few years away from retirement and your 401k is going in the toilet, you may want to reconsider. Or if there is any reason to believe you may be out of a job soon.

Just make sure you don't view this as any sort of investment. You are pre-paying for the next 50 years' worth of vacations.

One other comment: Since you said you are buying 300 points, you may want to ask that the contract be split into at least 2 separate units. I believe you need to have at least one contract of 160 points, but then you could have a second contract of 140 points. DVC contracts can only be sold in their entirety. Thus if you were to discover that 300 points was too many for your family to consistently use, your only option would be to sell the entire 300-pt contract and buy a smaller one.

With two contract of 160 and 140, you could someday sell the 140-pt contract and keep the other.

In fact, if you intend on using your points at more than just the one DVC resort (Bay Lake Tower), you could buy ownership at two separate resorts--get 160 points at BLT and 140 at the Animal Kingdom Villas...or something like that.

 

[ranthony]

One other comment: Since you said you are buying 300 points, you may want to ask that the contract be split into at least 2 separate units. I believe you need to have at least one contract of 160 points, but then you could have a second contract of 140 points.

You would be wise at the very least to have the contract split into 160 and then at least 1 other 140 point contract, if not two 70 point contracts. Your resale options would be greatly increased!

If it doesn't feel right to you to follow through with this contract then back out and take your time.

 

[MyDizneyBoyz]

That's a lot of money to spend without having done the research ahead of time to answer those basic questions. If you're feeling pressured, back out of the sale and take the time to get your questions answered. I personally wouldn't be comfortable spending that kind of money on an impulse purchase. But then again I have friends who walk into car dealerships on a whim and buy a brand new car for that kind of money without having done any research. I tend to research things to death so a lot of it has to do with your personality and what falls within your comfort zone.

At the very least, I agree with breaking such a large contract up into smaller ones. If nothing else, it will make it easier to sell or hand down to family members in the future.

Without knowing your personal circumstances it's impossible for someone to say whether buying DVC is a good choice for YOU. If you're worried about buyer's remorse, I'd back out during this window of opportunity.

 

[jlewisinsyr]

One other note, the $1,100 a year is for the first year, your dues will continue to go up every year at an average rate of 3% - 4%. Granted this is significantly less than the 8% hotel rates go up, but it is something to consider.

 

[tjkraz]

One other note, the $1,100 a year is for the first year, your dues will continue to go up every year at an average rate of 3% - 4%. Granted this is significantly less than the 8% hotel rates go up, but it is something to consider.

Yes, dues will increase. But Disney hotel rates do not increase at an 8% rate annually.

I have been monitoring the Disney cash rates since we bought into DVC 6 years ago. Room rates have also gone up 3-4% per year with some of the higher-priced rooms being closer to 5%.

So the rate of inflation is about the same DVC vs. cash. Of course, a 4% increase on a $400 per night room is a lot more than 4% on a DVC point (or the points required for a single night's stay.)

 

[Greenlawnsue]

Thanks for the info. I am the kind of person who researches for months to even buy a car, so I am suprised that I want to do this so much. But who knows what the right thing to do is, but you are all correct. I need to rethink this whole thing. I knew this board was where I could ask the questions.
THANKS

 

[jlewisinsyr]

Yes, dues will increase. But Disney hotel rates do not increase at an 8% rate annually.

I have been monitoring the Disney cash rates since we bought into DVC 6 years ago. Room rates have also gone up 3-4% per year with some of the higher-priced rooms being closer to 5%.

So the rate of inflation is about the same DVC vs. cash. Of course, a 4% increase on a $400 per night room is a lot more than 4% on a DVC point (or the points required for a single night's stay.)

If you're going to compare, first you need to look at just Deluxe and go back a little further than 6 years to get a good average. When the Polynesian opened in 1971, the rate was $29.00 a night. Looking from then until now, the base rate has increased 1276% to an regular room rate of $399 a night. The average increase between now and then is roughly 7.33%. Also remember, this is exponiantiated by the room tax that currently is 12.5%, so for every dollar in rate increase, your also paying more in taxes.

Because DVC is a timeshare, the tax rate is not based on the room rate tax, rather property.

 

[backyardponder]

If you are not 100% sure, cancel while you can cancel. Do some research, look at re-sales, etc. Can you really afford this? Will there be kid's college expenses this might get in the way of? Are your jobs secure, etc?

 

[tjkraz]

If you're going to compare, first you need to look at just Deluxe and go back a little further than 6 years to get a good average. When the Polynesian opened in 1971, the rate was $29.00 a night. Looking from then until now, the base rate has increased 1276% to an regular room rate of $399 a night. The average increase between now and then is roughly 7.33%. Also remember, this is exponiantiated by the room tax that currently is 12.5%, so for every dollar in rate increase, your also paying more in taxes.

Looking at the last 6 years is a much more relevant sample than going back 30+ years. There is nothing in recent history to suggest that rate increases will even approach 8% in the future.

 

[Amy5000]

You would be wise at the very least to have the contract split into 160 and then at least 1 other 140 point contract, if not two 70 point contracts. Your resale options would be greatly increased!

If it doesn't feel right to you to follow through with this contract then back out and take your time.

This is good advice. If you are not going to cancel, please split this up into smaller contracts. Larger ones are much harder to sell.

 

[permavac]

It looks like it's all been said already by all of the above. One thing that I would add is that if it feels like you're making a mistake (and you know that "feeling") you should just cancel - for now. You can always change your mind to sign another contract next week or next month or next year, but if you go through with it there is no opportunity to change your mind after Friday. Also, not sure if your guide is one of the good/bad ones, but make sure you don't let them push you into something you're just not ready to do - there really is no harm in waiting since BLT is nowhere near to being sold out and the more seasoned DISers seem to think there are even more incentives on the horizon. It seems that most DVCers had higher levels of excitement to drown out the worry - if the worry is more at your forefront then maybe the time to buy is not now.

 

[Greenlawnsue]

If you are not 100% sure, cancel while you can cancel. Do some research, look at re-sales, etc. Can you really afford this? Will there be kid's college expenses this might get in the way of? Are your jobs secure, etc?

I know it's hard to answer this question with so little info, but in this case, yes the kids (10 and 12) have college taken care of. I could also pay for it in full right now. I'm just a worrier and ALWAYS want to know that I have a way out of anything!

 

[KAT4DISNEY]

I would agree that if you aren't 100% sure then cancel this contract and do some more research. At this point you cannot even use the BLT points so there is nothing lost there.

I also agree that if you do go ahead at the very least you should split up the contract.

 

[jlewisinsyr]

Looking at the last 6 years is a much more relevant sample than going back 30+ years. There is nothing in recent history to suggest that rate increases will even approach 8% in the future.

I disagree...and for any sort of averaging, the more data you have, the more accurate your average is because you help eliminate or devalue outliers.

 

[Mtnman44]

This is important. IF you decide to go through with the purchase, absolutely change your contract so that all 300 points on not on one contract. Get 160, and then maybe 70 and 70 or whatever you decide. There are several key advantages to this and zero negatives. But basically, you have more flexibility in the future if you decide to sell. If will be easier to sell all your points (smaller contracts are more in demand) AND smaller contracts carry a higher per point resale value. PLUS, this would enable you to sell portions of your points if you wanted to sell some of them but not all.

 

[tjkraz]

I disagree...and for any sort of averaging, the more data you have, the more accurate your average is because you help eliminate or devalue outliers.

Again, there is nothing in recent history to indicate that Disney has any intention of increasing rack rates by 8% or more annually.

The outliers which exist they occurred in the 70s and 80s when Disney prices went through an...adjustment period.

To suggest that room rates will average 8% increases over the next several decades is ludicrous. I don't see any evidence to foreshadow single-year increases of 10-15%, which would be necessary in order to maintain the averages you are touting.

In the event that such outlandish increases did occur, they would largely be tied to increases in operating costs. Since DVC dues pay resort operating costs and taxes, members would be subject to similar percentage increases in annual dues.

 

[gray52]

First off... i sense very real hesitation in your post... i would suggest you not buy in at this time.
We too got caught up in the whole thing the first time it was presented to us and we almost bought. We backed out at the last minute because we too do not do anything without a ton of research.
A couple years later we settled on a small contract (100pts) at OKW. As far as losing your shirt, if you look at the resales, most of the ones that stay on the boards for a while are the ones 200 points and up. IMHO, a 300 point contract would be insane at this point in the economy... You would never buy a $600,000 house in a neighborhood that all the other homes sell for $200,000... that would be a bad investment because there's not too many people willing to spend that kind of money and get that neighborhood... so with the economy the way it is, there will be significantly less people looking to buy timeshares... and i would think that most of those people aren't looking to buy 300 points... your best bets are the 50 - 100 point contracts.
So... my suggestion... go buy a 50 - 100 points on resale... use it a few years and if you really really love enough to splurge on BLT, jump in with both feet then.

1992 – Off Site
1995 – Dixie Landings (Honeymoon)
1997 – Off site
2000 – Villas at Disney Institute
2001 - Swan
2002 – CSR
2003 – Off site
2006 – POFQ
2007 – CBR
2008 – Disneyland (Hotel Del Coronado)
2009 – OKW