Is it difficult to resale DVC

[zfw4609]

I'm doing a financial analysis to decide if I want to buy a disney timeshare. I plan to keep it for 8 to 10 years and was wondering how easy it is to sell a Disney Old Key West timeshare. I've heard horror stories of timeshare owners who can't even give away their timeshares so I was wondering if I'd be in the same position when I want to unload my Disney property if I decide to buy.
If any of you have sold Disney, how long did it take to get a buyer? Did you get about what you paid for it?

 

[tjkraz]

Assuming moderate increases in annual dues, you'd be lucky to break even on the initial purchase within 8 years. IMO, you'd be better off investing your money and drawing interest + principal to fund your trips over the same period. It's very difficult to predict how the resale market might look in 10 years--particularly given that OKW will only have 27 years worth of ownership left.

 

[No1HawkFan]

IMO, Tjkraz didn't answer your question. I would say at this point it is fairly easy to sell a DVC timeshare as long as you list with the right company like TSS(sponsor of this site). I will admit, however, that I have not sold my DVC property but purchased from someone who was selling.

The people who purchased OKW back in 91 and selling today are getting well more than what they paid($51) and selling for $72-$76. However, everyone has purchased at different buy in prices. I just bought my resale in November of 2004 here is a link of what I paid.

http://www.disboards.com/showthread.php?t=785511&page=2&pp=15

If you buy I don't recommend buying directly from Disney unless you need to finance because I feel you will pay too much.

Unfortuntely, I am guessing most people who have sold their DVC probably no longer visit these boards on a regular basis. However, I hope you will get some responses from sellers who have sold their property.

Good Luck with your decision!!!

 

[tjkraz]

IMO, Tjkraz didn't answer your question. I would say at this point it is fairly easy to sell a DVC timeshare as long as you list with the right company like TSS(sponsor of this site).

Unfortunately that does little to predict the marketplace for OKW points in another decade.

I stand by my comments. zfw4609: If your interest in Disney is limited to the next 8-10 years, just keep your eyes open for cash discount codes and enjoy the flexibility and variety available in the 20+ Disney run resorts.

 

[Dean]

For 8-10 years I'd agree that you'd be lucky to break even, especially since the value and prices on resales will likely be decreasing by them. You'd be better off chasing codes or simply renting from a member. If you still wanted to join see if you could get by with a smaller package and make it with banking and borrowing. That way you'd have less to deal with when the times comes and be more likely to get value out of it. You could even buy less than you need and supplement by renting points transferred to your account.

 

[bcvillastwo]

To the original poster, if I understand your question you want to know "how easy it is to sell a Disney Old Key West timeshare" because you think you might want to sell within 10 years and you don't want it to be a difficult sale. If that is the crux of your question then in my mind the answer is that you shouldn't have any trouble selling and you should get a fair value for what you pay. I say this because from what I have seen at this point there isn't any problem selling OKW properties.

However, with that said I agree with some of the others who suggested that things could be different in 10 years with the shorter amount of time left on the original leases--about 27 years at that point since OKW's run ends in 2042.

If I were you I would spend a little time reading the FAQ's, checkout the DVC properties listed at the Timeshare Store, and read around the board to see what different people are saying about DVC. Armed with all of that information you should be able to make an informed decision.

 

[JimMIA]

Although you have received several quite different responses, the fact is all of the posts above are probably correct.

I think the real answer to your underlying question is, it depends on Disney. If they continue to build DVC properties, and therefore continue to have an interest in maintaining some reasonable correlation between new prices and resale prices -- then yes, I think there will be a good market. If they stop, I think prices will drop, but DVC will still probably have better resale than ordinary timeshares.

Are we gonna "break even?" I don't expect to, despite the correctly-stated history above. Nor would I buy DVC expecting to somehow break even. I look at it as locking in vacation costs at a reasonable level. Anything else I get is gravy.

 

[Shamus]

Since you are doing a Financial Analysis..............

Consider the following conditions ...

First...An OKW contract currently has 37 useful years left. Each year its value will be decreased by 1/37th so that in 37 years it has no value. (Straight Line Depreciation).

Second .....The underlining Value of a DVC point is the Disney Resort Room it can rent.

Third .... The Cash cost of that Disney Resorts Room will increase anually by the Inflation Rate (curently 3.01%).

..then looking 10 years out with a constant inflation rate you could expect a return of ........ 1 x 27/37 x 1.345 = .981648 ......... a loss of less than 2%

(1.345 is the future value of 3.01% growth at 10 years)

Lower inflation rates equal more of a loss ...higher inflation could result in a gain. (This is what makes DVC a hedge against inflationary Room rates).

That would mean you would have enjoyed 10 years worth of vacations for the cost of 10 years of annual dues plus 2% of your initial investment.

Of course you would have opportunity or financing costs, plus your selling costs and you would need to consider all the risks.... but I think you get the idea.


Shamus

 

[manning]

How easy is it to sell in 8-10 years?

How good is your crystal ball??

or

Who knows???????

 

[CarolMN]

I think it will be easy to sell in 8 - 10 years, but the price you get for it may or may not be anywhere near what you paid.

IMHO, you shouldn't buy DVC as an investment - buy it only if it makes sense for you to use as a prepaid vacation plan.

Since you seem to be worried about getting stuck with it, the good news is that you would only be "stuck" with it (and the annual dues) for a limited time - until January 31, 2042 if you buy OKW.

Best wishes-

 

[JimMIA]

I love Shamus' financial analysis, but the point that is easy to miss here is that the DVC resale marketplace is not a free market system. It is a marketplace with an elephant in the middle of the room setting the resale prices. The elephant in the middle of the room is Disney, through their exercise of their Right of First Refusal (ROFR)

Disney does several things with ROFR, but I'm sure the main purpose of ROFR is to prop up their direct sale prices. If they did not ROFR, and instead allowed resale prices seek their own level, a larger gap would emerge between direct purchases from Disney and resale. Eventually, the gap would get so wide nobody would buy from Disney at all -- they'd just buy resale and save money. Why would you buy SSR for $90 if you could get BCV for $40?

Prices for sold-out resorts have risen as several posters have mentioned, and someone who bought in 10-12 years ago is indeed in a position to make a nice profit today. But why? Is it that the value of the rooms has risen? They have but I don't think that is the reason.

The reason for the rise in resale prices is that a resale buyer has two hurdles to clear, not one. They first have to make an offer the seller will agree to, but they also have to place that offer high enough that Disney will waive ROFR. If you read Beca's thread on the DVC Community Board, you will see a number of situations where buyers either paid more than the asking price for the contract, or they went back to the seller after agreeing and asked, "Could you please let us pay a little more?" The reason, and the only reason that happens, is the buyers are worried about the elephant in the middle of the room snatching up their contract. ROFR is the floor of the resale market - not the intrinsic value of the contracts.

If Disney ever decides not to ROFR any more - for whatever reason, and I could give you several - the resale marketplace will change radically. It seems to me that DVC would remain more valuable than traditional timeshares, just because of where it is, but I think the prices would be considerably lower than they are now.

As CarloMN and others have suggested, I view DVC as a vacation opportunity, not a financial investment.

 

[Zbridget]

I love Shamus' financial analysis, but the point that is easy to miss here is that the DVC resale marketplace is not a free market system. It is a marketplace with an elephant in the middle of the room setting the resale prices. The elephant in the middle of the room is Disney, through their exercise of their Right of First Refusal (ROFR)



Thank you Jim,
I have been wanting to know what ROFR meant, but was afraid to ask. (it isn't in the list of abbreviations)