How do you make DVC make financial sense?

[Dean]

We were going to buy a contract together. We travel together annually and have for many years. Do you think that is not possible? Would separate contracts make more sense? I would only buy a contract with cash, so I have at least a year before I would be ready to consider a purchase. Thank you for your lengthy and well thought out response!

No way would I buy with someone on the deed that I wasn't willing to pay the entire bill for and didn't have any control over. A general partnership owning a timeshare together is a bad plan 100% of the time. For an adult child you're willing to put them on the deed but you pay and control everyone is different IMO. Just buy you're own and alternate who pays or reserve separately and link them. Or one of you buy and the other just "rent". The problem with buying together is it only works if it works but what if Divorce, death, someone changes their habits, health issues, or financial issues.

 

[CarolynFH]

I just closed on a resale contract (FINALLY!!) at BCV and I am thrilled. It cost more than I was hoping to spend per point, but I got the amount of points I was really hoping for and the UY that I wasn't willing to budge on.

My parents still live in Orlando, so I have a free place to stay when I visit - but when I took a look at my travel habits, for the past four years I've always taken time (and money) to either rent points or pay rack rate at BC every time I'm in Florida (four times a year, roughly) - even if it's just for a night.

It's just my husband and I (no kiddos), but we do have a slew of littles in our life - from the age of 2-10 - that we'd love to spend time with at Disney, and if I'm taking them to Disney without their parents ... well, I'm staying where there is Stormalong Bay and everyone at Hurricane Hannah's knows my name. Plain and simple. My husband and I love New Year's Eve at Epcot, so owning DVC at BCV is already a "savings" for us to stay there.

I also have lots of friends that travel to Disney, so "renting" my points to them at a discussed price will make using 340 points a year no problem. My husband was kind of against the idea ... but he's adamant that we stay at all of the DVC resorts at least one night in our first year so he can experience all of them - he didn't have to twist my arm too hard for that!

Also, I know that in a couple of years I will no longer have a house in Orlando to stay at for the bulk of my visits, so my travel habits will change. I'm REALLY excited about the new Riviera resort and have already planned to buy another large contract there - direct from Disney so I can have whatever "perks" may still be offered. Really, the only thing that will keep me from buying another 300+ points at Riviera will be the pool scene or distance to the existing CB pool area.

Congratulations and Welcome Home, @Keels! I’ve enjoyed reading your posts on the runDisney boards and hope to see them on the DVC boards too.

 

[Keels]

Congratulations and Welcome Home, @Keels! I’ve enjoyed reading your posts on the runDisney boards and hope to see them on the DVC boards too.

Thanks!! It took a while (and many contracts bought out on RoFR) to get here, but I'm thrilled! We're already staying at BCV for Marathon Weekend on rented points, but I'm going to pretend that it's my first stay as an owner.

 

[Pluto777]

A 5-7 year breakeven was not fantasy. That is what it worked out to for me and a few other people I know that were buying when I was. My average out of pocket buy in cost was ~$33/point. So I loaded up with a couple of thousand points at those prices. Where I was stupid was not buying even more and turning down contracts because they were $1-2 more than what I thought I could get them for.


That though was a once in a life time opportunity.

Even when the next crash happens and people are forced to sell their DVC because they can't afford to keep it, resale prices will not drop that low again. The reasons for that (1) the starting prices for DVC are so much higher now and (2) there are a lot more knowledgeable people who will be looking to buy distressed contracts, thus keeping a higher floor on prices.

Hey folks, I LOVE this thread, VERY informative with some folks who really know what they are talking about. I now own 2 DVC contracts and want even more : ) I DO also however want the contracts to make financial sense - in other words, the minimum amount of money invested for the maximum amount of gain. Full disclosure - I currently own at BLT and SSR.
Firstoff I have to say that although I haven't owned for long, I am somewhat concerned about just how CROWDED the R.A.T. seems to be getting. I HOPE that Disney knows what they are doing and are not 'overselling' too many points (either by DVC OR cash) so that it is possible at even the 7 month window to get something inside Disney world itself besides OKW and SSR.

Second The question of "making financial sense" I believe comes down to the big question: What are the MF's now and more importantly what are they likely to be in the future? Obviously more units means a wider base for MF's, but then also the type of structure and costs to maintain it are equally important. I see some low priced contracts (by low priced I mean lower initial cost of dollars per point, NOT maintenance fees) for resorts like VB and HHI, however the MF's on those are quite high and I worry that because of their locations they could go higher. I wonder if there is some type of ceiling that limits the maximum price they can increase? Aulani for example is another one (although the initial buy in cost is not near what I see on HHI and VB, but it does have a much longer expiration date.

I'd be curious as to what the intelligent folk on this thread think as to what the overall direction of MF's will likely be. Good luck to all future buyers and future DVC 'moguls' out there! : D

 

[iheartglaciers]

Firstoff I have to say that although I haven't owned for long, I am somewhat concerned about just how CROWDED the R.A.T. seems to be getting. I HOPE that Disney knows what they are doing and are not 'overselling' too many points (either by DVC OR cash) so that it is possible at even the 7 month window to get something inside Disney world itself besides OKW and SSR.

I don't think they can "oversell" points, but I think they need to reallocate the point charts. For instance, fall/early December has low points, but it's nuts with booking.

 

[aoconnor]

Firstoff I have to say that although I haven't owned for long, I am somewhat concerned about just how CROWDED the R.A.T. seems to be getting.

With each new resort DVC adds tens of thousands of new members. Poly had 4 million points, so if the average contract was 200 points that's 20,000 new members who will also try to book the older resorts on occasion. It's only going to get harder and harder unfortunately.

 

[_auroraborealis_]

It is not possible to oversell. The issue is that as a points timeshare, seasonal demand is not equal.

Ability to switch at 7 months is not guaranteed by contract. Availability at 11 months for your dates is not guaranteed. Nature of a points timeshare.

 

[cmwade77]

They aren't overselling, but one could argue that they are overbuilding in Orlando with the parks not having the ability to absorb the additional crowds these days. And on the opposite end of the spectrum, Anaheim, while crowded, doesn't have enough DVC rooms. I also think building actual DVC resorts in Paris, Hong Kong, Shanghai and even Tokyo, if local laws would allow, would be a huge success and would actually reduce the overcrowding of the U.S. parks a bit, as it would make DVC owners more likely to go to these locations with more affordable hotel options point wise.

 

[Deb & Bill]

Dues will only continue to go up every year. And new resorts will start off with higher dues than the starting point for more recent resorts. My dues at OKW were $3.14 in 1997 when we first bought our points. In 2018 they are $6.72. Check the Resource thread to see how dues have gone up each year. I do remember our dues going down from 1998 to 2001 at OKW, but that was the last time they did that. They can go up 15% each year, but that would be the extreme. Ultimately, you'll pay more in dues over the years that what you paid to buy in.

 

[Ben E N]

Dues will only continue to go up every year. And new resorts will start off with higher dues than the starting point for more recent resorts. My dues at OKW were $3.14 in 1997 when we first bought our points. In 2018 they are $6.72. Check the Resource thread to see how dues have gone up each year. I do remember our dues going down from 1998 to 2001 at OKW, but that was the last time they did that. They can go up 15% each year, but that would be the extreme. Ultimately, you'll pay more in dues over the years that what you paid to buy in.

To be fair about that, I will also pay more in property taxes on my house than my purchase price was by the time my mortgage is paid off. May be unique because I live in Cook (nicknamed Crook) county, but it makes the DVC dues seem pretty fair to me. My property taxes went up 15% this past year, so the 3.5% that my dues went up felt like a steal in comparison.

 

[Ben E N]

They aren't overselling, but one could argue that they are overbuilding in Orlando with the parks not having the ability to absorb the additional crowds these days. And on the opposite end of the spectrum, Anaheim, while crowded, doesn't have enough DVC rooms. I also think building actual DVC resorts in Paris, Hong Kong, Shanghai and even Tokyo, if local laws would allow, would be a huge success and would actually reduce the overcrowding of the U.S. parks a bit, as it would make DVC owners more likely to go to these locations with more affordable hotel options point wise.

3 of their past 4 new buildings have more or less just replaced hotel rooms, so I wouldn't call it overbuildong too badly. Might as well tap into the market when there are so many outside timeshares that are clearly built with Disney World in mind just outside of their gates. Do they need a 5th park? Yes. But DVC is not the driving factor for that.
Anaheim does not want any more timeshare rooms, so they are stuck there.
As for foreign markets, I agree. That would be awesome if they could make it work.

 

[Pluto777]

not knowing the renter, you
might take some risk

"not knowing the renter, you
might take some risk" - Why is this a risk, could you explain please?

 

[dmask]

Interesting posts! We have owned at OKW for about 10 years got in low via resale. Haven’t done the math, but the value has worked for us. Somewhat local so short trips have always been possible. Have used points to offset peak rate dates - nye. Stayed at most resorts including California. If it is a better value to book a room @ resident or passholder rates we do that instead. Probably not the norm with an average of 6-8 trips a year at varying lengths,we found this mix has worked for us and have been very happy with the purchase.

 

[crisi]

"not knowing the renter, you
might take some risk" - Why is this a risk, could you explain please?

Renting points from an owner carries a slight risk of getting scammed.

Renting your points out also is not risk free - the biggest risk being you don't get payment in full up front and they back out past the 30 day window without paying you - leaving you with points in holding - or if its near the end of your use year and points can't be banked. If you rent your own points, get payment up front, make it non-refundable (at least officially, unofficially you can agree to try to work it out if possible) and pay attention to your use year in relation to the booking.