New DVC Member - Perspective of a Direct Buyer

[chalee94]

Really the only thing I would feel compelled to refute at this point are blanket inflation amounts saying I paid $5k-$10k more for direct. There's a disparity for sure, but because I'm looking at Poly and not just any resort, it's not THAT big a disparity.

Now of course, the math is quite different when you go to a different home resort...

On a long thread, things tend to go off the rails. Not everyone is addressing the OP even if it can feel that way. If you are determined to own at the Poly, it's true that resale is not as much of an option and the savings are smaller.

(Board concerns with the Poly tend to involve speculation about the bungalows - will low demand for bungalows force a reallocation of pts that increase point costs for studios and will higher maintenance costs for over water villas mean higher dues increases. No one knows but it is good to consider possible risks.)

 

[FireflyTrance]

I bought resale at VGC and then direct at Poly. I definitely don’t regret buying direct at Poly. I have already gotten several hundred dollars in membership extra benefits just in one trip. We got to attend the DVC Pandora preview, visited the Epcot lounge, bought AP Gold passes, got a discount on water park tickets and got dining and shopping discounts. Some will tell you to buy resale, but I felt unhappy only owning a resale contract where I couldn’t access membership extras. We are much more happy now that we can do everything and have our blue cards. So do what works for you

 

[nydisneydad]

On a long thread, things tend to go off the rails. Not everyone is addressing the OP even if it can feel that way.

Though it may appear that way, my last post actually wasn't a response to the post directly before it (which just so happened to mention the $10k number)... I was in the middle of writing my post when that one showed up, so that was just an odd coincidence.

I also don't think this thread has particularly gone off the rails. We're still talking about resale vs. direct so it's on topic as far as I'm concerned.

 

[skier_pete]

The best way that someone could argue that @nydisneydad direct buy at the Poly was a "bad move" is if he could easily book the Poly at 7 months with other points, and the problem with that is that until it is sold out, there's really no way to predict how difficult this will be - so it truly is, as he says, the right move for "comfort and certainty". So far, we've been able to book the Poly every single time we've tried, but we've only tried once (and that was the day that they open the first 7 months of booking up to all, which was clearly the moment when getting in would be the easiest it ever would be. So, I have no evidence in favor or against it.

 

[aoconnor]

The best way that someone could argue that @nydisneydad direct buy at the Poly was a "bad move" is if he could easily book the Poly at 7 months with other points, and the problem with that is that until it is sold out, there's really no way to predict how difficult this will be - so it truly is, as he says, the right move for "comfort and certainty". So far, we've been able to book the Poly every single time we've tried, but we've only tried once (and that was the day that they open the first 7 months of booking up to all, which was clearly the moment when getting in would be the easiest it ever would be. So, I have no evidence in favor or against it.

Right. Keep in mind that Poly has 4 million total points to be sold and the bungalows account for approximately 1 million points.

Do you think 1 out of 4 purchasers (or at least 1/4 of the points sold) are buying to book bungalows? HIGHLY doubtful IMO. This could cause a big supply/demand issue for the studios once sold out.

 

[Littlelulu01]

One disadvantage of the direct buy only comes if you have to sell. I bought my AKV points 3 years ago at $74 a point. Could probably get $84 a point today. If I sold today, I actually took 5 Disney trips (Sept 2014, Aug 2015, Feb 2016, Oct 2016, Nov 2017) for about $1000 total out of pocket. If I had bought 160 points at the Poly in 2015 at $168 a point and sold them today for $145 a point - those trips would've cost me around $10,000. An economic downturn comes along and those resale values drop - that number becomes a LOT worse.

Anyone who bought direct resort on first offer would be ok. If you purchased your AKV contract back in 2008 for $101 direct and sold it for $74 in 2015 loaded with 2014 points you'd still have come out ahead compared to renting at $12/per point.

All resorts, even aulani on first offer at $114, you'd come out ahead selling today when factoring in years used. Even poly. Poly was first offered I think in Jan 2015. $160 pp. The contracts received 2014 points no mf's. Compared to cost of renting those points at $15 for uy 2014, 2015 and 2016 and now unloading at even $130 per point you would still be ok. The resale bargain comes into play if you want AKV today direct at $165 vs $92 resale. On a 160 point contract resale is definitely a savings. on 50 or less points a purchase is still typically better direct vs resale.

You purchased akv at $74 loaded contract. That's a really nice deal but it's not going to be found today.

It seems all relative to when you decide to become a member and what resort you want as to what is best resale vs direct.

I just added 25 AKV points to a contract and paid $165. I would not have done much better waiting for a resale with my uy factoring in closing costs and mf's. My recent Aulani subsidized contract at $80 was totally worth the resale purchase though.

I actually am leaning towards purchasing ccv over trying to find a inexpensive vb contract. In the end the ccv will be a better deal over a $50 vb contract-just more up front cost. Even if factoring in opportunity cost of the extra $ , ccv still wins over vb.

Poly direct today is a good choice for those who want to stay at poly. I know not everyone is a fan but poly is and will continue to be one of wdw prime and most expensive resorts. I love wilderness lodge and AKV. Some can't stand those resorts. I think once ccv sells out it's going to be very difficult to get a December 7 month reservation

 

[aoconnor]

I actually am leaning towards purchasing ccv over trying to find a inexpensive vb contract. In the end the ccv will be a better deal over a $50 vb contract-just more up front cost. Even if factoring in opportunity cost of the extra $ , ccv still wins over vb.

That can't possibly be true-- it's not even close. Even if your opportunity cost is just 2%, which you can get with a risk free treasury bond:

VB: $50 / 24 years = $2.08 + $8.11 MF + $1 opportunity cost @ 2% = $11.19 effective annual cost

CCV: $176 / 50 years = $3.52 + $7.33 MF + $3.52 opportunity cost @ 2% = $14.37 effective annual cost

CCV is at least 28% "more expensive" than VB and that number jumps to 55% more expensive if you bump your opportunity cost to 5%.

 

[Littlelulu01]

That can't possibly be true-- it's not even close. Even if your opportunity cost is just 2%, which you can get with a risk free treasury bond:

VB: $50 / 24 years = $2.08 + $8.11 MF + $1 opportunity cost @ 2% = $11.19 effective annual cost

CCV: $176 / 50 years = $3.52 + $7.33 MF + $3.52 opportunity cost @ 2% = $14.37 effective annual cost

CCV is at least 28% "more expensive" than VB and that number jumps to 55% more expensive if you bump your opportunity cost to 5%.

If you are looking at figuring opportunity cost of vero beach over ccv you have to end ccv opportunity cost in 2042. Either that or extend vb to 2068. Try it that way and you get a much different outcome. It's more practical to end both in 2042 because that's when vb expires. Also In 2042 vb is worth zero and ccv is worth something dollar wise or 26 more years of use. You also have to figure out the difference in mf's. It's $19.50 more per point for vb over ccv assuming the spread remains constant till 2042. Vb has a higher probability of outpacing ccv though.

 

[ELMC]

That can't possibly be true-- it's not even close. Even if your opportunity cost is just 2%, which you can get with a risk free treasury bond:

VB: $50 / 24 years = $2.08 + $8.11 MF + $1 opportunity cost @ 2% = $11.19 effective annual cost

CCV: $176 / 50 years = $3.52 + $7.33 MF + $3.52 opportunity cost @ 2% = $14.37 effective annual cost

CCV is at least 28% "more expensive" than VB and that number jumps to 55% more expensive if you bump your opportunity cost to 5%.

I like this example and I don't find the problems with it that lulu does because the length of the contract is baked into the cost per point already. But I'm going to take it from a much simpler angle and take a lot of the math out of it.

Maintenance fees for VB are $8.11. CCV is $7.33. That is a 78 cent difference per year. Are you willing to spend $126 more per point, cash, right now, to save 78 cents per point per year? Of course not. So the answer has to be something different. That's why I say to focus on all the other reasons people give to buy direct...reasons that are perfectly valid and specific to the individual. But in this case, you can't argue that it's a better deal financially because the most basic numbers suggest otherwise.

The other financial comparison is buying CCV vs. simply renting points. The differential between renting at $16 vs. maintenance fees of $7.33 is $8.67 more per year by renting. At that rate, and removing opportunity cost from the equation (which helps the purchase side of the discussion) that means that it will take 21 years for renting to be the more expensive option. (As an aside, if you do factor in opportunity cost, a 5% after tax yield would extend the break even point out to infinity. Basically, you would never come out ahead by purchasing.) So again, there has to be something else. People like controlling their own reservations. They like using the website. They like being owners....the list goes on, and they're all good reasons to favor ownership over renting. But from a strict financial standpoint, there is no way that purchasing wins.

This same argument applies to resale purchases, it's just that the break even point comes a lot quicker. On my resale contracts, that were purchased at various resorts for various prices at various times, my break even ranges from as little as 2 years on my VB contract to as many as 10 years on my BLT. Some may come along and criticize my BLT purchase, asking why I would be willing to do something at a loss for 10 years before being in the black. And that's when I would point them to the other reasons, because that makes sense to me. When compared to renting, all purchases, resale and direct alike, are on the same spectrum that for lack of a better term could be called "making financial sense". It's up to each of us to find where we belong on that spectrum and make decisions based on that.

As an aside, I don't think I've explicitly stated it before so I'll say it now...I do think that if you are going to buy Poly the difference right now between direct and resale is so negligible that it probably makes more sense to just buy direct. The question is not Poly direct vs. Poly resale the question is Poly vs. any one of the other less expensive options. I hope that in the end the Poly is the right choice for the OP. Reading some of his thoughts I'm not sure how it will end up, but I truly do wish him the best.

 

[skier_pete]

Right. Keep in mind that Poly has 4 million total points to be sold and the bungalows account for approximately 1 million points.

Do you think 1 out of 4 purchasers (or at least 1/4 of the points sold) are buying to book bungalows? HIGHLY doubtful IMO. This could cause a big supply/demand issue for the studios once sold out.

Oh - I agree, but with everything else being studios - and expensive studios to boot - I think that a secondary effect of this resort is a lot of owners will pursue other resorts, both for cheaper studios and 1-bedrooms. (1-bedrooms at many resorts only cost 25-50 % more than a Poly studio. The offset to that is that is that availability will often be there at 7 months.

Now CCV - forget it, it's going to be impossible to get studios/1-bedrooms there.

 

[skier_pete]

Anyone who bought direct resort on first offer would be ok. If you purchased your AKV contract back in 2008 for $101 direct and sold it for $74 in 2015 loaded with 2014 points you'd still have come out ahead compared to renting at $12/per point.

All resorts, even aulani on first offer at $114, you'd come out ahead selling today when factoring in years used. Even poly. Poly was first offered I think in Jan 2015. $160 pp. The contracts received 2014 points no mf's. Compared to cost of renting those points at $15 for uy 2014, 2015 and 2016 and now unloading at even $130 per point you would still be ok. The resale bargain comes into play if you want AKV today direct at $165 vs $92 resale. On a 160 point contract resale is definitely a savings. on 50 or less points a purchase is still typically better direct vs resale.

You purchased akv at $74 loaded contract. That's a really nice deal but it's not going to be found today.

The person I bought my contract from bought AKV in 2011 for $129 per point (you can look these things up) and sold in 2014 for $74 per point. They did not come out ahead on that deal.

 

[amymgould]

* We live five minutes from a small airport that has direct flights to Orlando, so it's an ideal recurring vacation spot.

Not to take away from the rest of your post (I did read it all!), but I'm very curious about the airport you are talking about. I also live in NY and, after flying direct from Syracuse (about an hour from me) last month, I definitely want to do it again. Just wondering about other smaller airports.

 

[kboo]

Right. Keep in mind that Poly has 4 million total points to be sold and the bungalows account for approximately 1 million points.

Do you think 1 out of 4 purchasers (or at least 1/4 of the points sold) are buying to book bungalows? HIGHLY doubtful IMO. This could cause a big supply/demand issue for the studios once sold out.

Eek. This makes me think that if I want to try a Poly studio, I should do it in the next few years.

Anyone who bought direct resort on first offer would be ok. If you purchased your AKV contract back in 2008 for $101 direct and sold it for $74 in 2015 loaded with 2014 points you'd still have come out ahead compared to renting at $12/per point.

...
Poly direct today is a good choice for those who want to stay at poly. I know not everyone is a fan but poly is and will continue to be one of wdw prime and most expensive resorts. I love wilderness lodge and AKV. Some can't stand those resorts. I think once ccv sells out it's going to be very difficult to get a December 7 month reservation

I agree with this - I do wonder how the lack of 1-BR at Poly will affect bookings in a few years when more Poly points are sold. Will it be harder to book Poly at 7 months? Or will we see it harder to book 1BR and 2BR at other resorts at 7 months? Or will we see a lot of Poly resale contracts when the owners "outgrow" Poly and decide they want the 11-mo booking advantage at another home resort? I'm actually very curious, and relieved I don't have $ in the game. I have a friend whose MIL is ridiculously wealthy (and I say that living in NYC and seeing a LOT of excess) who actually bought Poly to stay in the bungalows. Talk about uninformed and *not* cost conscious. I don't think you're ever going to need the 11 mo window to book a bungalow. Why not buy a pile of SSR points and book the bungalows whenever you want? Still smh over that one.

As an aside, I don't think I've explicitly stated it before so I'll say it now...I do think that if you are going to buy Poly the difference right now between direct and resale is so negligible that it probably makes more sense to just buy direct. The question is not Poly direct vs. Poly resale the question is Poly vs. any one of the other less expensive options. I hope that in the end the Poly is the right choice for the OP. Reading some of his thoughts I'm not sure how it will end up, but I truly do wish him the best.

@ELMC, were you the one who had posted earlier about the comparison being between Poly v CCV v another less expensive home resort? In reading @nydisneydad 's original post, I really thought he was going to end up at CCV. We bought DVC with the idea of staying in studios at least some or most of the time, but have only rented 1BR and 2BR. our 2 stays coming up in August are in studios; I'd originally rented those points to help us decide on home resort and # of points, but we sort of jumped the gun because we saw a resale contract that was pretty close to perfect for us. I think WL (BRV/CCV) would become a favorite once our little one is out of the stroller and doesn't need a nap any more. But since we wanted to buy now, and the baby is only 18 mos, and BLT is hard to get, even with home resort advantage, we figured we have at least 5 years of using BLT primarily as our home resort, and using that time to decide if we are really spoiled by 1BR and need either more points or another contract somewhere else. Our current contract allows for about 5 nights annually in a 1BR, or a week in a studio, then a week in a 1BR, etc without having to be wedded to standard view. I have a feeling that DH is going to want 1BR or larger as the girls get older, and EP is *our* favorite resort, so ... we will probably buy another contract in the next year or 2. I say all this because when I first chimed in to this thread, I really thought OP would have been better served buying another resort to have the 1BR and 2BR available to him at 11 mos. But fact is, if I wanted Poly and didn't already have a direct contract, I'd probably buy direct now as well. The savings on a small-ish Poly direct v resale are really not that big. If you decide another resort serves your purposes better in a few years, nothing stops you from selling the original contract and buying at another home resort, or buying another contract and using them for different purposes. And that's why there is also a strong and active resale market.

Not to take away from the rest of your post (I did read it all!), but I'm very curious about the airport you are talking about. I also live in NY and, after flying direct from Syracuse (about an hour from me) last month, I definitely want to do it again. Just wondering about other smaller airports.

I'm gonna guess HPN (Westchester). I have a bunch of friends/coworkers who live in Westchester and they choose to fly out of there to WDW as much as possible. Of course, flyingout of NYC, you have 3 airports and many airlines to choose from, so you can mix and match flights to get your best mix of fare and schedule. If purely looking at schedule, there are direct flights hourly or less! Next trip, we fly out of LGA and are coming back to JFK because the schedules work best for us.

 

[nydisneydad]

Not to take away from the rest of your post (I did read it all!), but I'm very curious about the airport you are talking about. I also live in NY and, after flying direct from Syracuse (about an hour from me) last month, I definitely want to do it again. Just wondering about other smaller airports.

We're near Stewart Airport (SWF) in Newburgh. Only downside is the current SWF -> Orlando flight options are limited (just an 8:30pm departing flight most days), but JetBlue is looking to expand at the airport so there's good reason to believe that will change within the next few years. They used to have a late morning Orlando flight, which would be ideal. Westchester is also a perfectly reasonable option for us (and has an 11am flight among others), as it's less than an hour away.

 

[amymgould]

We're near Stewart Airport (SWF) in Newburgh. Only downside is the current SWF -> Orlando flight options are limited (just an 8:30pm departing flight most days), but JetBlue is looking to expand at the airport so there's good reason to believe that will change within the next few years. They used to have a late morning Orlando flight, which would be ideal. Westchester is also a perfectly reasonable option for us (and has an 11am flight among others), as it's less than an hour away.

Thanks! They are little farther away than I'd prefer, however, a little bit of driving plus a direct flight can sometimes beat a long layover and/or multiple stops!

 

[amymgould]

Thanks! They are little farther away than I'd prefer, however, a little bit of driving plus a direct flight can sometimes beat a long layover and/or multiple stops!

Just checked...Newburgh is about 2.5 hours from me, so definitely one to keep in mind if the price is right! Thanks again!

 

[skier_pete]

I agree with this - I do wonder how the lack of 1-BR at Poly will affect bookings in a few years when more Poly points are sold. Will it be harder to book Poly at 7 months? Or will we see it harder to book 1BR and 2BR at other resorts at 7 months? Or will we see a lot of Poly resale contracts when the owners "outgrow" Poly and decide they want the 11-mo booking advantage at another home resort? I'm actually very curious, and relieved I don't have $ in the game. I have a friend whose MIL is ridiculously wealthy (and I say that living in NYC and seeing a LOT of excess) who actually bought Poly to stay in the bungalows. Talk about uninformed and *not* cost conscious. I don't think you're ever going to need the 11 mo window to book a bungalow. Why not buy a pile of SSR points and book the bungalows whenever you want? Still smh over that one..

I have a friend that's middle-management in the DVC organization. He got us a tour of the Bungalows back in October. At the time, he said that the demand for the bungalows is high enough that DVC was pulling the "open house" bungalow because they needed them all for inventory. I was surpised, because like most people I was thinking "how many people can afford these to justify this many points per night?"

Out of curiosity I just checked the availability category. I notice that while it's fairly booked in June, lots of availabilty from July 5th-September, only 2 days booked up, but then actually in October and November the bungalow inventory is pretty thin - there's some days available, but about 1/2 the dates are taken. Beyond that though - full availability. I am pretty sure you are right though - those bungalows would almost always be available at 7 months with rare exceptions. (Though when you look at the studios - beyond 7 months there's near 100% availability as well.)

That said, Disney must see them getting used, or else they wouldn't have built more at CCV.

I still think availability at 7 months will be common at the Poly. There are 20 Bungalows and 360 studios (60 of which are lake view). The 20 bungalows account for about 20 % of the total points at the Poly. Let's say only 5% of buyers at the Poly want the Bungalows, that makes 95% of the points to fill 80% of the available space. But of those buyers, there is likely a quarter of them that are going to want to try other resorts, or 1 / 2 bedrooms, or the like - this is probably a conservative number, that number will get higher the longer they own there. That means 71% of the Poly buyers are looking to stay in the studios, but 80% of the rooms are studios. So on average, there's at least 9% excess studios (or 35 studios) available on any given date at 7-months.

This is getting super off-track but a point I keep trying about why buying CCV is a terrible Idea. CCV has something like 35% of their total points in cabins and Grand Villas, and only 9% of the points in studios. However, the average contract size sold for CCV so far is 140 points - about the same as the average Poly contract. At 140 points or less, are those buyers planning on Cabins or GV? No. CCV (and DVC ownership in general) skews greatly towards studios. The average resort at WDW has 20-25 % of it's inventory in studios or lock-off studios. VGF had only 14 % of it's points in studios, and if your a VGF owner you know how near impossible it is to get a studio unless you book at 11-months. Imagine what it's going to be like at CCV. There are going to be a LOT of very angry CCV owners out there in about 18 months - especially those that payed all that money and want to go in the fall and are stuck at SSR at 7 months.

 

[wnielsen1]

This is getting super off-track but a point I keep trying about why buying CCV is a terrible Idea. CCV has something like 35% of their total points in cabins and Grand Villas, and only 9% of the points in studios. However, the average contract size sold for CCV so far is 140 points - about the same as the average Poly contract. At 140 points or less, are those buyers planning on Cabins or GV? No. CCV (and DVC ownership in general) skews greatly towards studios. The average resort at WDW has 20-25 % of it's inventory in studios or lock-off studios. VGF had only 14 % of it's points in studios, and if your a VGF owner you know how near impossible it is to get a studio unless you book at 11-months. Imagine what it's going to be like at CCV. There are going to be a LOT of very angry CCV owners out there in about 18 months - especially those that payed all that money and want to go in the fall and are stuck at SSR at 7 months.

Great! I should have no problem addressing my addonitis in the resale market.

 

[kboo]

I have a friend that's middle-management in the DVC organization. He got us a tour of the Bungalows back in October. At the time, he said that the demand for the bungalows is high enough that DVC was pulling the "open house" bungalow because they needed them all for inventory. I was surpised, because like most people I was thinking "how many people can afford these to justify this many points per night?"

Out of curiosity I just checked the availability category. I notice that while it's fairly booked in June, lots of availabilty from July 5th-September, only 2 days booked up, but then actually in October and November the bungalow inventory is pretty thin - there's some days available, but about 1/2 the dates are taken. Beyond that though - full availability. I am pretty sure you are right though - those bungalows would almost always be available at 7 months with rare exceptions. (Though when you look at the studios - beyond 7 months there's near 100% availability as well.)

That said, Disney must see them getting used, or else they wouldn't have built more at CCV.

I still think availability at 7 months will be common at the Poly. There are 20 Bungalows and 360 studios (60 of which are lake view). The 20 bungalows account for about 20 % of the total points at the Poly. Let's say only 5% of buyers at the Poly want the Bungalows, that makes 95% of the points to fill 80% of the available space. But of those buyers, there is likely a quarter of them that are going to want to try other resorts, or 1 / 2 bedrooms, or the like - this is probably a conservative number, that number will get higher the longer they own there. That means 71% of the Poly buyers are looking to stay in the studios, but 80% of the rooms are studios. So on average, there's at least 9% excess studios (or 35 studios) available on any given date at 7-months.

This is getting super off-track but a point I keep trying about why buying CCV is a terrible Idea. CCV has something like 35% of their total points in cabins and Grand Villas, and only 9% of the points in studios. However, the average contract size sold for CCV so far is 140 points - about the same as the average Poly contract. At 140 points or less, are those buyers planning on Cabins or GV? No. CCV (and DVC ownership in general) skews greatly towards studios. The average resort at WDW has 20-25 % of it's inventory in studios or lock-off studios. VGF had only 14 % of it's points in studios, and if your a VGF owner you know how near impossible it is to get a studio unless you book at 11-months. Imagine what it's going to be like at CCV. There are going to be a LOT of very angry CCV owners out there in about 18 months - especially those that payed all that money and want to go in the fall and are stuck at SSR at 7 months.

This is interesting, and I'm happy to go off track with you!
I took a look at the bungalow/cabin points - CCV GVs and cabins are significantly less in points than Poly. One would argue that they don't have the pizzazz of the Poly bungalows. But rates are not *completely* out of line with GVs at other, older resorts, especially for shorter stays. The CCV GV is less than the GV at either BLT or VGF, so they're another option for GV near MK. Considering how quickly GVs seem to get booked, I am not sure I would second guess DVC's planning at this point.

Going back to OP's post (ha, attempt at getting on track?) - if you bought at CCV for 1BR-2BR, I think you'd be ok. It seems like studio availabilty IS kept low by DVC and for a purpose - with 1BR at almost 2x the points, wouldn't they want you to spend your points on 1BRs, see how nice they are compared to studios, and decide you want to add on/buy an additional contract? Selling a studio gets you in the door, and upselling the 1BR+ makes you add on points, whether direct or resale.

 

[glencoe]

Thanks! They are little farther away than I'd prefer, however, a little bit of driving plus a direct flight can sometimes beat a long layover and/or multiple stops!

How are the costs from these airports? I have thought about doing a drive (I am on LI) if the it is cost effective.