Monthly Fees vs. Cost of OOP Room

[k3chantal]

I'm not surprised, BLT is just too expense for me

I've found that the older resorts like OKW, BWV, BCV and VWL are more likely to have owners without loans.

Sorry....still baffled that anyone would take a loan out to purchase a timeshare especially an expensive one like DVC; specifically if the thought going in is to save money.......

Huge factor for my husband and I was whether or not we could afford the MF year after year after year and the other related travel costs like airplane tickets, passes and food.....once that was established it made sense to purchase a membership outright. And it is still a wager, isn't it? A job loss, an illness, etc....

No one should buy if the thought is that they can 'just sell it if it doesn't work out.' This isn't good risk management with your money.

 

[ELMC]

Sorry....still baffled that anyone would take a loan out to purchase a timeshare especially an expensive one like DVC; specifically if the thought going in is to save money.......

Huge factor for my husband and I was whether or not we could afford the MF year after year after year and the other related travel costs like airplane tickets, passes and food.....once that was established it made sense to purchase a membership outright. And it is still a wager, isn't it? A job loss, an illness, etc....

No one should buy if the thought is that they can 'just sell it if it doesn't work out.' This isn't good risk management with your money.

I think that there are different motivations for purchasing. Some people feel like they are really owning something when they purchase DVC, and I don't think you're going to be able to convince those people that financing is not a great idea. Others, like you and I, have a more practical view of what our DVC ownership gets us. (Yes, you read that right...I put you and me in the same boat).

As far as not working out, I think that was another major motivation I had for buying resale. IF for some reason I had to get out of my contracts, I know that I could get pretty close to what I paid for them even after paying commissions, etc. I couldn't say that if I purchased direct, and that lack of a clean exit strategy made me uncomfortable.

I think a good short term strategy is renting out points if there are a few years where vacations aren't possible. But I agree with you, dumping a contract outright (often times at a loss) is not a well thought out exit strategy.

 

[Sammie]

For us personally if we had not needed a two bedroom we would have been very happy to continue to stay at Disney deluxe resorts.

To me the true value to DVC is not the studios.

However these projections for the future of dues, gave me a severe headache

 

[George4]

We also found that DVC was a great value for us because of our large family. The cost of getting a 2-bedroom or bigger was staggering compared to the cost of DVC. Even off-site, the best we found was more than double what we will pay to Disney between up front costs and annual dues.

 

[BestDadEver]

I

It's like saying I saved money buying a Honda because it was way less than an Escalade...which I never would have bought in the first place. By that logic, I saved a ton today because I didn't buy a Lear jet.
.

I know I am in the minority but , I don't compare my purchase to what I would have stayed in because thats not where I will be staying . And you can't count on discounts everytime you book .

Idisagree with the above example . I would phrase it as, it's like getting an escalade for the price of a honda .

 

[kamik86]

To me either way of comparing prices (comparing to the discounted rate you would get for the same room or to the rate you would have paid if you didn't have DVC is valid).

The first shows how good of a deal you are getting for that place you would rather stay at (because I"m assuming the person would prefer the DVC room over the other one they would normally stay at.)

The second shows how much money they actually save over DVC.

I have had similar discussions with DVC in the past when he talks about how much he saved with some discount he got. Many times I point out that he didnt save any money. If he has $50 he spends $50. What he did was get more stuff for his $50. DVC is very similar. I don't spend less money then I used to, but I do get a much nicer place to stay.

 

[disneynutz]

do not be too concerned about the 30-50 year commitment. you can always sell, lots of people do. i did once and broke even, that is i got all my trips for the maintenance fees only. you may lose some money when you sell, but dvc holds up better than any other timeshare out there. you can try it buying in a small resale contract, see if you like it, if not...simply sell it. my guess is that you will love dvc if you buy where you think you'd really like to stay.

We own many contracts purchased over 12 years, some resale, some direct. If we sell all of the contracts today, we have lost 20%, add the sales commission and it's 30%.

Bill

 

[joeyrose]

We own many contracts purchased over 12 years, some resale, some direct. If we sell all of the contracts today, we have lost 20%, add the sales commission and it's 30%.

Bill

a 30% loss on the purchase price after (up to) 12 years
use doesn't sound too bad to me if i needed to get out.

if one starts small, buys resale with cash, tries dvc, doesn't like it, needs to sell, they can relatively easy today. there's a risk here, but the decision to buy/own disney points today is not irrevocable. and renting the points is an option while one is in limbo about selling. renting can cut down any loss anticipated and allows the owner a break from the mf's and "obligation" to travel to disney that year.

that's all i'm saying here. and i do not feel the same way at all about other timeshares out there, just dvc points.

too, in a worst case scenario, didn't disney recently allow folks "out" and simply took back their contract...when the economy was so bad. i heard about that, but can't say for sure.

 

[JimMIA]

a 30% loss on the purchase price after (up to) 12 years
use doesn't sound too bad to me if i needed to get out.

Like most of these comparisons, there is a trap here.

The problem is, if Bill had sold 4-5 years ago, he would probably have made a PROFIT on most of his contracts. That 20% decline has happened in the last 3 years or so, partially due to the economy and partially to DVC virtually abandoning ROFR for several years.

So what does that say about the next 3 years? The next 10? Who knows?

Also, remember that buying 12 years ago, Bill bought WAY low. He wasn't paying $100 per point or anywhere near there.

Some people today are paying $130-$150 per point buying direct, and they have an immediate 50-60% loss the minute they close. Of course, they don't know that yet.

if one starts small, buys resale with cash, tries dvc, doesn't like it, needs to sell, they can relatively easy today. there's a risk here, but the decision to buy/own disney points today is not irrevocable. and renting the points is an option while one is in limbo about selling. renting can cut down any loss anticipated and allows the owner a break from the mf's and "obligation" to travel to disney that year.

I generally agree with that. Best case scenario, you're starting out with the loss of your closing costs on buying and the 10% commission and a few incidentals selling. But...IF you start small and pay cash as you suggest, you would have a manageable loss.

I'd rather see people rent reservations from an owner as a way of "trying DVC" though. No initial outlay, no long-term committment, no exit strategy needed, etc.

that's all i'm saying here. and i do not feel the same way at all about other timeshares out there, just dvc points.

Depends entirely on how you purchase other timeshares.

If you buy direct from the developer, you're looking at a huge loss -- probably approaching 100%.

However, if you buy resale, you should have very little skin in the game. What you would pay a developer $20,000 for, you should be able to get resale for just a few hundred bucks, including all costs.

I purchased the equivalent of about 600 (or more) DVC points on eBay for less than $2,000 including all closing and transfer costs. And I literally expect not to get anything back from that contract when I sell it. But I'm comfortable with a 100% loss of such a small amount.

too, in a worst case scenario, didn't disney recently allow folks "out" and simply took back their contract...when the economy was so bad. i heard about that, but can't say for sure.

There were a few anecdotal reports of DVC buying back a few contracts for about $55 per point -- when they were selling for $100. That was several years ago and I'm pretty sure they're no longer doing it.

 

[Lambekel]

Like most of these comparisons, there is a trap here.

The problem is, if Bill had sold 4-5 years ago, he would probably have made a PROFIT on most of his contracts. That 20% decline has happened in the last 3 years or so, partially due to the economy and partially to DVC virtually abandoning ROFR for several years.

So what does that say about the next 3 years? The next 10? Who knows?

Also, remember that buying 12 years ago, Bill bought WAY low. He wasn't paying $100 per point or anywhere near there.

Some people today are paying $130-$150 per point buying direct, and they have an immediate 50-60% loss the minute they close. Of course, they don't know that yet.

That is simply not true. The only way you could consider it a loss is if you have to sell. If you use the contract yearly for the life of the contract you will be considerably ahead...

 

[ELMC]

Some people today are paying $130-$150 per point buying direct, and they have an immediate 50-60% loss the minute they close. Of course, they don't know that yet.

That is simply not true. The only way you could consider it a loss is if you have to sell. If you use the contract yearly for the life of the contract you will be considerably ahead...

With all due respect, Jim is correct and you are not. The loss exists as soon as you reconcile your purchase price with the price you could sell your contract for on the open market. Until you sell the contract, it is simply an unrealized loss, but the loss still exists. Now you can choose to not realize the loss by using the contract instead of selling it. But that doesn't negate the fact that you have a tremendous loss in value the second your 10 day cooling off period ends.

This is what Jim was alluding to when he says talks of the "loss" by buying direct. However, even though the loss exists, if you simply plan on using the contract, it's not something you need to concern yourself with. But it is still there.

 

[k3chantal]

With all due respect, Jim is correct and you are not. The loss exists as soon as you reconcile your purchase price with the price you could sell your contract for on the open market. Until you sell the contract, it is simply an unrealized loss, but the loss still exists. Now you can choose to not realize the loss by using the contract instead of selling it. But that doesn't negate the fact that you have a tremendous loss in value the second your 10 day cooling off period ends.

This is what Jim was alluding to when he says talks of the "loss" by buying direct. However, even though the loss exists, if you simply plan on using the contract, it's not something you need to concern yourself with. But it is still there.

A good analogy would be "like purchasing a new car and driving it off the lot"

But just like new cars, somebody has to 'drive them off the lot' or they would never be available for resale.

Just wished direct DVC contracts had that new car smell.......

 

[Lambekel]

Not true. You guys are making it way to complicated. With regard to the new car scenario - the only way it is a loss is if you sell it right away. If you have that car for ten years and have gotten use out of it, you come out ahead.

With all due respect, Jim is correct and you are not. The loss exists as soon as you reconcile your purchase price with the price you could sell your contract for on the open market. Until you sell the contract, it is simply an unrealized loss, but the loss still exists. Now you can choose to not realize the loss by using the contract instead of selling it. But that doesn't negate the fact that you have a tremendous loss in value the second your 10 day cooling off period ends.

This is what Jim was alluding to when he says talks of the "loss" by buying direct. However, even though the loss exists, if you simply plan on using the contract, it's not something you need to concern yourself with. But it is still there.

 

[Lambekel]

Look at it this way. (and by the way no disrespect taken. makes good conversation)

An AKV 270 point contract purchased direct for 45 years is 29360.00 (before the current increase) Add that to the the life of dues in todays dollars. I know it will go up, but so will the room rates and rental rates for points. So at 4.54 per point that is 66096.00. Total price in today's dollars is $95456.00. So to go as a non DVC member I could rent the points. So I rent the points in todays dollars at $12 per point. THat's $3240 per year or $145,800. And we know that the rental price per point will only go up. So in this scenario we are up $50344. So if I bought DVC, rented the points out yearly and didn't take one vacation, I would be up. This is the simplest way to look at it. And its not a loss, unless I missed something. Which I suppose is possible and I'm sure someone will point it out if I did.

Now think about the phrase you use "unrealized loss." Does that really make sense. How is something a loss when it is not realized? Thats kinda comical, actually! I worked in banking for many years and understand it is used, but I still think it is comical.

With all due respect, Jim is correct and you are not. The loss exists as soon as you reconcile your purchase price with the price you could sell your contract for on the open market. Until you sell the contract, it is simply an unrealized loss, but the loss still exists. Now you can choose to not realize the loss by using the contract instead of selling it. But that doesn't negate the fact that you have a tremendous loss in value the second your 10 day cooling off period ends.

This is what Jim was alluding to when he says talks of the "loss" by buying direct. However, even though the loss exists, if you simply plan on using the contract, it's not something you need to concern yourself with. But it is still there.

 

[Lambekel]

A good analogy would be "like purchasing a new car and driving it off the lot"

But just like new cars, somebody has to 'drive them off the lot' or they would never be available for resale.

Just wished direct DVC contracts had that new car smell.......

I think it has a "mental" new car smell, which is just as good!

 

[BestDadEver]

With all due respect, Jim is correct and you are not. The loss exists as soon as you reconcile your purchase price with the price you could sell your contract for on the open market. Until you sell the contract, it is simply an unrealized loss, but the loss still exists. Now you can choose to not realize the loss by using the contract instead of selling it. But that doesn't negate the fact that you have a tremendous loss in value the second your 10 day cooling off period ends.

This is what Jim was alluding to when he says talks of the "loss" by buying direct. However, even though the loss exists, if you simply plan on using the contract, it's not something you need to concern yourself with. But it is still there.

I disagee with this also . Your not including the value of actualy using the product .

 

[disneynutz]

Buying and selling numbers aside, I still feel that the greatest expense is for people who wouldn't go to Disney every year or a couple of times per year and now they do because they have points to use up.

Granted there are worse places to have to go to but a few thousand dollars each trip, plus dues, plus purchase price, adds up to some bucks.

Bill

 

[ELMC]

I disagee with this also . Your not including the value of actualy using the product .

You're right, I'm not talking about the use of the product. I'm talking about people who buy direct for $130 a point only to realize that they don't want it, can't afford it, lost their job, got divorced, etc. etc. and then sell the contract two years later for $65 a point. That's a loss. And I'm pretty sure these people in these positions didn't anticipate having to sell shortly after buying. Anyone who buys direct these days should recognize that this could be a reality for them as well. Unfortunately, there are people who don't who find themselves in a bind.

If you plan on using DVC and not selling the contract, then that's great. You'll get a lot of enjoyment out of it and I'm sure you'll be thrilled with the purchase. But the fact of the matter is that when you fork over your $20,800 to buy 160 points direct at AKV, your balance sheet takes an instant hit of $10,400.

 

[ELMC]

Look at it this way. (and by the way no disrespect taken. makes good conversation)

An AKV 270 point contract purchased direct for 45 years is 29360.00 (before the current increase) Add that to the the life of dues in todays dollars. I know it will go up, but so will the room rates and rental rates for points. So at 4.54 per point that is 66096.00. Total price in today's dollars is $95456.00. So to go as a non DVC member I could rent the points. So I rent the points in todays dollars at $12 per point. THat's $3240 per year or $145,800. And we know that the rental price per point will only go up. So in this scenario we are up $50344. So if I bought DVC, rented the points out yearly and didn't take one vacation, I would be up. This is the simplest way to look at it. And its not a loss, unless I missed something. Which I suppose is possible and I'm sure someone will point it out if I did.

Now think about the phrase you use "unrealized loss." Does that really make sense. How is something a loss when it is not realized? Thats kinda comical, actually! I worked in banking for many years and understand it is used, but I still think it is comical.

I think we're talking about two different things. You're talking about long term value (and I agree that there is long term value to DVC) and I am talking about net worth. My shares of XYZ corporation that I bought for 100 a piece 2 years ago that are now worth 80 are a loss to me. I'm worth less today than I was on the day I bought them. I can hold onto them and try to recover the loss if the price goes up, or I can sell now. But either way, I'm down some money. I don't find that concept comical at all.

 

[radmcg]

I guess this is a little off topic but I bought to make me take a vacation and so my wife won't make me go somewhere else. I love Disney so does my family. DVC kind of makes me go when I know I already should go. I can go and let my daughter do what she wants and never worry. Its the one vacation I get to relax on. I know that is not a monetary thing but after reading the 4 pages of this post it is very apparent that people look as this in very different ways. I guess the one question to ask is if you had it to do over again would you still buy again? My biggest regret is I didn't do it sooner. I have done regression analysis and buying resale I do pretty well. For the rooms I like, a 1 bedroom suite I make out pretty well. I have always stayed at BWV The GF or the Poly. Looking at those rates and the CRO roulette wheel of discounts makes my head hurt. We got a great discount last year on the BWV. This year couldn't get squat for a discount. The reason I bought is I don't like getting a room for 250.00 a night one year and 400.00 the next year. I guess Points rental negates that but I have been wary of that. But then again I do what I like and find a way to justify it: especially to my wife. Its just like buying Cars. When it is all said and done everybody has a different comfort level. Some new, some used, some BMW some KIA. I think the numbers are just part of the question. BTW This has been great reading no wonder we have democrats and republicans. The different views are amazing.