How many of you are waiting for more contracts to be available?

[ELMC]

1) Despite what many say I do view DVC as a quasi investment. The extra points I have on my contract each year will be rented to offset the upfront cost of the contract. Eventually the profit I make in rent will overtake the cost of the contract and from that point on I will be in the black. So from a financial standpoint it does make sense to purchase and recoup my initial costs by renting extra points. Some think the gap between MF's and rent will eventually close. I don't think that will happen. The more I researched and looked at numbers like historical maintenance fees, historical resale prices, etc. it made me believe that there is an opportunity to profit off extra points.

Here's where I'm confused. Your initial analysis then compared this option to other investments and decided that it was a losing proposition. So is it the combination of investment component and enhancement to your vacation experience that changed your mind? Because from a sheer investment standpoint, the numbers haven't changed.

 

[DougEMG]

You missed the point of that statement, the BWV contract might be worth something to you in 15 years as you already own it but no-one is going to pay you to take it off your hands.

A simple example: Someone needs 400 points for a vacation and they are looking at staying at DVC.

Renting points that year costs $12/point which makes the renting costs = $4,800.

If someone can buy those same point including any closing fees plus have enough time to make the booking for a discount to that rental price of $4,800, then for some people it would be worth it even if that was the last points left on the contract.

It only never become worth it when there are no savings, ie rental rates are lower than MF+closing costs or Disney has some big discounts on their rooms.

 

[lodge]

A simple example: Someone needs 400 points for a vacation and they are looking at staying at DVC.

Renting points that year costs $12/point which makes the renting costs = $4,800.

If someone can buy those same point including any closing fees plus have enough time to make the booking for a discount to that rental price of $4,800, then for some people it would be worth it even if that was the last points left on the contract.

It only never become worth it when there are no savings, ie rental rates are lower than MF+closing costs or Disney has some big discounts on their rooms.

Exactly true! I think this makes owning DVC different than other timeshares. As long as the area hold value, the timeshare will, and WDW planned well to control it's surrounding environment.

 

[bman388]

No insult taken at all. I say that I wish I would've bought a few months ago because I could have bought at a lower price point.

I have not ran the numbers and analyzed every resale transaction, but I think the pervceived "lower" prices a few months ago are being overhyped. Disney raised direct prices, resale followed suit and buyers are giving sellers what they want in fear of ROFR. Most of the contracts being ROFR'd are loaded ones with mediocre offers. If you offer a fair price (not what the seller is asking for) consistent with a few months ago, I think you have a fair shot at passing ROFR. Heck, some of the resale prices lately have been approaching the Direct price! The main thing I see different in the resale market today is only what the seller is asking for... just my two pennies!

 

[theguda]

It only never become worth it when there are no savings, ie rental rates are lower than MF+closing costs or Disney has some big discounts on their rooms.

Exactly

 

[CarolMN]

There are several timeshares out there today that are virtually worthless - the annual fees exceed what a rental brings. This could happen to DVC. I do not think it will, but the chances are not zero.

 

[DougEMG]

There are several timeshares out there today that are virtually worthless - the annual fees exceed what a rental brings. This could happen to DVC. I do not think it will, but the chances are not zero.

Agreeded

 

[Galun]

I just think there is a better chance that prices will rise instead of decrease and the recent low prices are the exception...not the rule.

Looking at this strictly from an investment perspective, the inherent value of the contract should DECREASE every year, because there is one less year in which the contract will generate points. However it is certainly possible that the resale prices in the market over the past year was too low.

Personally I think it's better to evaluate the expected cash flow stream from a contract (difference between rental value and mf), than making a guestimate on where resale price of the contract will be at an arbitrary point in time in the future.