Need help on DVC Direct/Resale with Aulani.

[gskywalker]

For what it’s worth, for us, the Aulani experience even now is first rate. You could flip a $90 Aulani contract and make money, or use it for a year and then sell.

Its much more complicated and expensive for me though from what I understand. I have to fight to get 15% of any DVC contract that is automatically taken by the IRS towards any profit when the sale is done by a foreign seller, plus I believe I read that Hawaii does something similar so it's even higher for an Aulani contract. Plus there is always the foreign exchange risk. If I buy now and pay $1.25 per American dollar and then when I sell the I only get back $0.95 on the dollar. I have considered it....thx a lot, now you have me thinking about it more

 

[Paul Stupin]

Its much more complicated and expensive for me though from what I understand. I have to fight to get 15% of any DVC contract that is automatically taken by the IRS towards any profit when the sale is done by a foreign seller, plus I believe I read that Hawaii does something similar so it's even higher for an Aulani contract. Plus there is always the foreign exchange risk. If I buy now and pay $1.25 per American dollar and then when I sell the I only get back $0.95 on the dollar. I have considered it....thx a lot, now you have me thinking about it more

Totally understood. But the restrictions are starting to be lifted in Hawaii, and I think we’re nearing the end of this current situation, and you’ll be able to use those $90 Aulani points for a long time to come.

 

[Jimmy Geppetto]

I see many AUL lovers in this thread... so I'm curious, with the new incentives to buy direct is anyone considering a direct add-on at AUL?

You can buy 300 points for $133pp which totals $39,900. On top of that, if we purchased today with our Feb UY we would get 2021 points as well as 2022 points in less than 3 months from now. If I took those 2021 points and rented them at a conservative price of $15pp that gets me another $4500. $39,900 - 4500 = $35,400. Divide that by 300 and we get a price of $118pp.

That's cheaper than resale... however I do expect resale prices to drop on AUL very soon. The contracts currently listed at $120-130 will not sell with such a low delta to direct (or at least they shouldn't).

 

[DVChris]

With the military discount, we can buy direct for $129.67 at 300 points. While a great purchase price, my concern is how high and how fast dues might climb. In comparing with other beachfront properties, Hilton Head’s CAGR is 7.1% and Vero Beach is 4.8%. While VB is lower than HH, last year VB dues increased 10.9%. With a 5% annual increase assumption, AUL dues will climb to over $58 per point by the end of the contract. To contrast with older WDW resorts, BCV’s CAGR is 3.7%, BWV is 3%, BR is 4.3%.

It’s also concerning to hear from folks who live in Hawaii about local issues (Covid impact, political issues, potential increase in taxes, etc), HARPTA if you need to sell, and overall unfavorable laws to timeshare owners who do not live in Hawaii.

While we would love to buy, all of the above holds us back… at least for now.

 

[Paul Stupin]

I see many AUL lovers in this thread... so I'm curious, with the new incentives to buy direct is anyone considering a direct add-on at AUL?

You can buy 300 points for $133pp which totals $39,900. On top of that, if we purchased today with our Feb UY we would get 2021 points as well as 2022 points in less than 3 months from now. If I took those 2021 points and rented them at a conservative price of $15pp that gets me another $4500. $39,900 - 4500 = $35,400. Divide that by 300 and we get a price of $118pp.

That's cheaper than resale... however I do expect resale prices to drop on AUL very soon. The contracts currently listed at $120-130 will not sell with such a low delta to direct (or at least they shouldn't).

I love Aulani, am always defending it on these boards, currently own several Aulani resale contracts, and if I were looking to buy more I’d definitely buy direct. But we live in LA, it’s an easy trip, and we frequently go there. I wouldn’t buy if I were just going to rent them (too much work) or use them as sleep around points. The dues are just too pricey.

 

[Paul Stupin]

I see many AUL lovers in this thread... so I'm curious, with the new incentives to buy direct is anyone considering a direct add-on at AUL?

You can buy 300 points for $133pp which totals $39,900. On top of that, if we purchased today with our Feb UY we would get 2021 points as well as 2022 points in less than 3 months from now. If I took those 2021 points and rented them at a conservative price of $15pp that gets me another $4500. $39,900 - 4500 = $35,400. Divide that by 300 and we get a price of $118pp.

That's cheaper than resale... however I do expect resale prices to drop on AUL very soon. The contracts currently listed at $120-130 will not sell with such a low delta to direct (or at least they shouldn't).

I’d also split the purchase into three 100 point contracts to maximize resale value.

 

[Gothemi]

I just saw this come up. I'm the OP and I can tell you I decided to buy direct. I bought exactly how many points I need to go at least once a year. When the new offer came out, it put a 300+ point contract at 143. While resale was "averaging" 127, most for sale were actually around 135-137. I had the cash so I made the decision to buy direct and split it into two contracts. Now I'm trolling the resale boards for WDW and GCH contracts.

 

[Jimmy Geppetto]

I’d also split the purchase into three 100 point contracts to maximize resale value.

I was actually thinking 4 x 75 point contracts.

 

[Galun]

I see many AUL lovers in this thread... so I'm curious, with the new incentives to buy direct is anyone considering a direct add-on at AUL?

You can buy 300 points for $133pp which totals $39,900. On top of that, if we purchased today with our Feb UY we would get 2021 points as well as 2022 points in less than 3 months from now. If I took those 2021 points and rented them at a conservative price of $15pp that gets me another $4500. $39,900 - 4500 = $35,400. Divide that by 300 and we get a price of $118pp.

That's cheaper than resale... however I do expect resale prices to drop on AUL very soon. The contracts currently listed at $120-130 will not sell with such a low delta to direct (or at least they shouldn't).

The deal can be even better. Dec use year so you get both 20 and 21 points while paying only 1/12 of maintenance fee. Use a travel credit card to pay to get a rebate.

For 300 points it’s $133 purchase price. Chase sapphire reserve effective rebate on travel is 4.5% which is $6. Rent out 20 and 21 points for $18 each (that’s the market price). Pay $0.75 (1/12 x $8.3x) maintenance fee. Your effective purchase price is $92 plus closing costs. That’s only slightly more expensive than the price I bought at in the two months immediately after COVID when people were panic selling. I’d do 3x $100 point contacts.

resale price for small contracts will be fine I think. The discount really escalates at 300 points and honestly I don’t think a lot of people can afford that. Chop it up to 100 point contracts and it should be fine. A 100 point contract for existing member under the current promo is $188 per point.

 

[DonMacGregor]

With the military discount, we can buy direct for $129.67 at 300 points. While a great purchase price, my concern is how high and how fast dues might climb. In comparing with other beachfront properties, Hilton Head’s CAGR is 7.1% and Vero Beach is 4.8%. While VB is lower than HH, last year VB dues increased 10.9%. With a 5% annual increase assumption, AUL dues will climb to over $58 per point by the end of the contract. To contrast with older WDW resorts, BCV’s CAGR is 3.7%, BWV is 3%, BR is 4.3%.

I don't think it's really an accurate comparison between the two Atlantic Coast resorts and Oahu.

The Atlantic sees on average 14 named storms and 10 actual hurricanes each year. HHI and VB get at least a whiff of hurricane impact (or at least high strength tropical storm) almost yearly, with a slim chance they'll get smacked in the nose with one every few years. While most hurricanes hit the Gulf Coast of Florida, you can see very strong storm impact on the Atlantic Coast. The same goes for South Carolina. The two may not see a ton of direct hits, but plenty of near misses and storm surge is always a potential impact.

By comparison, you get on average only 4 hurricanes (tropical cyclones) total in the Central Pacific each year, with a Hawaiian impact extremely rare. Because the Pacific is about twice the size of the Atlantic, the weather varies considerably between the five major weather sections (3 in the north and 2 in the south) that the ocean is divided into for cyclone warning purposes. Most major storms occur in the north Western Pacific in the form of typhoons. Because of unique atmospheric traits, hurricanes seldom form in the Central Pacific, and storms tend not to migrate too far east or west. The last major hurricane to hit Hawaii, Hurricane Iniki, hit way back in 1992. Hurricanes/typhoons just don't hit Hawaii.

Long story short (I know, too late), you're not likely to see dues rising at Aulani due to storm damage, like you would at the Atlantic Coast resorts. Yes, you could see special assessments at any resort as a result of specific storm damage. But I would argue that you'll see maintenance costs increase more rapidly at the Atlantic Coast resorts due to more repetitive, if lesser storm impact, as well as the age of those two resorts versus Aulani, and the relative types of construction and building envelope materials.