Not drinking the cool aid on resale!!

[sndral]

... I am making a simple statement of fact that since the inception of DVC buying at the early price when a resort opens is just as good a decision based on historical price data as buying resale for the same resort years down the line...

My statement is for current buyers going forward to see how dvc has historically performed when they make a buying decision. I have been hearing the same stuff since 1999 when I bought bwv. ......your crazy...The price is to high. My brother bought bcv at 80 in 2002 and people were saying your crazy it's way to high. I bought gfv at 150 pp and guess what...I'm crazy it's way to high. I guess we will see.

I always chuckle at these ex poste facto financial arguments marshaled to justify what is, after all, not a financial investment.
If your goal is to show potential buyers how DVC has performed historically, then you really must include all DVC resorts - including those you have chosen to ignore - AKV, SSR, VB, HHI, VGC, Aulani. There may be valid reasons to exclude them from your examples, but they are worthy of mention because in most of those cases direct buyers made a bad bet about future value.
Let's consider AKV and SSR, discounted by you because of their size compared to other DVC properties. If the goal in buying the current new VGF is to be near MK, then currently the competitor is BLT and, for some, VWL. Soon VPR will be selling and perhaps a large DVC complex over at Fort Wilderness - thus VGF might behave more like AKV or SSR going forward.
More significant to me, is the actual cost of staying at VGF point wise, the point inflation this resort represents is shocking to me and of course if you have to buy more points to stay there, you are paying MFs on more points each year v. staying at a more point friendly resort. Who knows what impact that will have on desirability of VGF going forward?
Second, I haven't run the numbers, but DVC seems to me to have really ratcheted up the buy in dollars w/ opening VGF, thus they seem to be changing the playing field and who knows if they have created a slippery slope.
Finally you really need to talk in inflation adjusted dollars - there are calculators that do this for you
The inflation adjusted value of that $62.75 per point @ BWV paid in 1996 would be $94.81 today. That $80 paid for BCV in 2002 would be $105.42 today, twelve years later. Thus, if you paid $145 per point for VGF then @ 3% inflation in 10 years your points must be worth $195 just to compare apples to apples.
For me it was simple, I wanted to go to WDW most years for 10-11 nights, I had discretionary income to pay cash of X amount, what got me to that goal? New points at VGF or 'used' points somewhere else? Value at the end of use of points was meaningless to me. My assumed values were enjoyment of use and memories made and nothing more.

 

[crisi]

DVC only makes sense to a small number of people at all.

For those it makes sense for, resale makes the most sense for most of them because initial buy in cost is a big deal - most don't have an extra $25k lying around.

For those that have their heart set on a new resort, direct is the way to go. I also probably would buy VGC direct (there isn't much of a resale break there) - whatever was available first. And I'd consider direct for a small BCV add on if I wanted it - its rare to find those contracts and there isn't much of a deal to be had.

But the vast majority of people who come here looking for advice on DVC fitting their needs have budget issues. SSR may not have all the years, but it has plenty of years for most people's DVC use, and is a DVC bargain in both buy in cost and dues. IF DVC is going to be a fit for them (and it often isn't), direct might be a financial burden.

 

[JimMIA]

1. If you want more points today, and have a time machine, this is really useful data.

But I DON'T have a time machine...does that mean this data is useless?

 

[crisi]

But I DON'T have a time machine...does that mean this data is useless?

I'd let you borrow mine, but the insurance company is a real stickler over unlicensed drivers.

 

[Brian Noble]

But I DON'T have a time machine...does that mean this data is useless?

Left as an exercise to the reader. Alternatively, in the immortal words of Fermat:

I have discovered a truly marvelous proof of this, which this margin is too narrow to contain.

 

[Jennasis]

I don't care how anyone else spends their money. And I don't care how others feel about how I spend my money.


If we could have afforded to be direct when BLT first opened, we would have. We couldn't, and we didn't. We bought what we could afford, when we could afford it. That's resale at our favorite resort in WDW (BLT).

 

[Dean]

I realize that most dvc members on this site, and many others, think resale is the only way to go and give that advice to all that inquire about the process. I agree that resale is great option, but believe there is an important fact overlooked.

Looking at the DVC resorts in Orlando and California, and looking at there opening sales prices, I really don't see how there is much, if any savings if you buy early when the resort opens. Just a few resort statistical data below:

OKW 1991 $51 pp 2014 resale around $70 pp

BWV 1996 $62.75 pp 2014 resale around $80 PP

WL 2000 $72 pp 2014 resale around $80 pp

BCV 2002 $80 pp 2014 resale around $95 pp

BLT 2009 $112-$5 (incentive) $107 pp 2014 resale around $ 95pp

VGC 2009 $112 pp 2014 resale $135 pp

Now with VGF going up to $165 a point later this month, and most likely will end up at $175 to $ 185 before it sells out (opened at $145; resale going for around $135), I think the best advise would be to buy DVC direct but early when the resort first goes on sale. You will get the full 50 years, get the full DVC benefits (I know not the best use of points, but like the option) easier process, and in many cases the value will rise. I think mainly the high demand small resorts like VGC, BCV, VGF and soon to be Poly, were and are smart plays for direct buying early.

It seems right now people are happy to be picking up 2042 to 2054 end date contracts for more or the same money then they were sold for 10 to 20 years ago, and are pounding there chest about the resale market. A little confusing.

I think there are 2 important variables that the historical comparison misses. One is that the choice currently is to buy at a much reduced price compared to retail, that wasn't the case when most people bought retail previously. So it's SSR at $60-70 compared to VGF at $165. The other is that retail prices have gone up faster than resale even if you look at proportions. I also feel the current prices are artificially low due to the GF hype but likely will stay so for a few years with the Poly coming on board. There certainly are reasons to buy retail but there are specialty reasons. Anticipated resale price shouldn't be one of them because one will certainly lose money compared to buy in but more importantly, anyone not looking to own long term probably shouldn't consider buying in anyway. Likely the biggest difference is the time value of money for the difference between one option vs another but it varies dramatically due to variables difficult to generalize.

 

[jliehr]

I know people are saying prices are going up later this month, but taking the DVC Tour yesterday at Aulani I was handed the new price sheets as the only option. $165 VGF with no incentives, $160 at Aulani with varying incentives. I was told that there were no other direct first time purchaser options, we will continue renting until we find a resale that makes sense for us, or possibly the Poly depending on it.

Could have just been our guide trying to get higher prices, but she was nice and seemed honest. My wife asked what happens if we wanted out, she actually suggested we could rent out instead of selling.

 

[Jennasis]

I know people are saying prices are going up later this month, but taking the DVC Tour yesterday at Aulani I was handed the new price sheets as the only option. $165 VGF with no incentives, $160 at Aulani with varying incentives. I was told that there were no other direct first time purchaser options, we will continue renting until we find a resale that makes sense for us, or possibly the Poly depending on it.

Could have just been our guide trying to get higher prices, but she was nice and seemed honest. My wife asked what happens if we wanted out, she actually suggested we could rent out instead of selling.

You can buy anything direct. Just be firm in telling them you want X resort (AKV, BC etc) and they will sell it to you direct. The "there are no other options" is just a sales tactic.

 

[crisi]

You can buy anything direct. Just be firm in telling them you want X resort (AKV, BC etc) and they will sell it to you direct. The "there are no other options" is just a sales tactic.

True, with the caveat that some resorts really are sold out and there is a waiting list for points. Buying VGC direct probably means getting on a waitlist. I think there is a waitlist for BCV as well - at least for some use months (its one of the reasons resale isn't a bargain for those resorts).

 

[skier_pete]

Johnny D.

I think your original post makes a good point. If you want to buy into a new resort, there is nothing wrong with doing that.


I think when people here talk about supporting resale, though, they are more talking about it as a good way to get into DVC at a much lower price than new. If you are not picky about where you are staying, then resale is probably the right way to go (as it was for me).

In particular though - what you are ignoring is if you want to buy into an older resort NOW. If you preferred location is Wilderness Lodge, you still are better off with resale (at $90 PP) than buy directly through Disney (at $135 PP). Sure, the BEST option would have been to buy 15 years ago, but unless you are Doc Brown in your Delorean, that's not an option.

The other thing is, a lot of people coming to these boards might not even realize resale is an option. They hear Disney's sales pitch and are convinced that's the only way to go. Folks on these boards don't bang the resale drum for their own benefit. And I don't think they are saying you are foolish for buying direct. I think what they are saying is you are foolish for not considering every option and determining what works best for you.

 

[z28wiz]

Johnny D. I think your original post makes a good point. If you want to buy into a new resort, there is nothing wrong with doing that. I think when people here talk about supporting resale, though, they are more talking about it as a good way to get into DVC at a much lower price than new. If you are not picky about where you are staying, then resale is probably the right way to go (as it was for me). In particular though - what you are ignoring is if you want to buy into an older resort NOW. If you preferred location is Wilderness Lodge, you still are better off with resale (at $90 PP) than buy directly through Disney (at $135 PP). Sure, the BEST option would have been to buy 15 years ago, but unless you are Doc Brown in your Delorean, that's not an option. The other thing is, a lot of people coming to these boards might not even realize resale is an option. They hear Disney's sales pitch and are convinced that's the only way to go. Folks on these boards don't bang the resale drum for their own benefit. And I don't think they are saying you are foolish for buying direct. I think what they are saying is you are foolish for not considering every option and determining what works best for you.

I just bought a Wilderness 175 point contract for 70 per point. A lot cheaper then direct. Saved $10,500. Sent from my iPhone using DISBoards

 

[Dean]

Johnny D.

I think your original post makes a good point. If you want to buy into a new resort, there is nothing wrong with doing that.


I think when people here talk about supporting resale, though, they are more talking about it as a good way to get into DVC at a much lower price than new. If you are not picky about where you are staying, then resale is probably the right way to go (as it was for me).

In particular though - what you are ignoring is if you want to buy into an older resort NOW. If you preferred location is Wilderness Lodge, you still are better off with resale (at $90 PP) than buy directly through Disney (at $135 PP). Sure, the BEST option would have been to buy 15 years ago, but unless you are Doc Brown in your Delorean, that's not an option.

The other thing is, a lot of people coming to these boards might not even realize resale is an option. They hear Disney's sales pitch and are convinced that's the only way to go. Folks on these boards don't bang the resale drum for their own benefit. And I don't think they are saying you are foolish for buying direct. I think what they are saying is you are foolish for not considering every option and determining what works best for you.

There are some situations where buying retail may be the only feasible option and some where it's likely the best option (one does not necessarily equal the other). Whether it's a good choice or reasonable option would depend on the specifics. Anyone buying VGF just to get into the system and use the points for non VGF (other DVC, cash type exchange options, RCI) a significant portion of the time would clearly be making a poor choice. If they're set on VGF and will use it as such almost all the time, it might be a reasonable choice esp if not financed.

 

[lawboy2001]

I know people are saying prices are going up later this month, but taking the DVC Tour yesterday at Aulani I was handed the new price sheets as the only option. $165 VGF with no incentives, $160 at Aulani with varying incentives. I was told that there were no other direct first time purchaser options, we will continue renting until we find a resale that makes sense for us, or possibly the Poly depending on it.

Could have just been our guide trying to get higher prices, but she was nice and seemed honest. My wife asked what happens if we wanted out, she actually suggested we could rent out instead of selling.

Veering a bit off topic but I have to ask - what were the Aulani incentives? I am on the fence about adding on before the price increase. But I recall that sometimes the incentives can negate the increased price so I can maybe wait?

 

[lovin'fl]

Veering a bit off topic but I have to ask - what were the Aulani incentives? I am on the fence about adding on before the price increase. But I recall that sometimes the incentives can negate the increased price so I can maybe wait?

http://www.dvcnews.com/index.php/dvc-program/financial/pricing-a-promotions

Adding on:
Aulani (Hawaii)*****

$155 per point; 25-49 points
$155 per point less $500 Developer Credit; 50-99 points
$155 per point less $2 per point incentive AND $1500 Developer Credit; 100-149 points
$155 per point less $4 per point incentive AND $2000 Developer Credit; 150-199 points
$155 per point less $6 per point incentive AND $3000 Developer Credit; 200-299 points
$155 per point less $8 per point incentive AND $3500 Developer Credit; 300-999 points
$155 per point less $9 per point incentive AND $3500 Developer Credit; 1000+ points

 

[Johnny D]

Always interesting points of view, especially when it comes to how people do their math and analysis to determine if it is personally worth it.

My original post was meant to let people know that forgoing a new resort at its opening price, to wait for the decline on the resale market does not really save you much it most situations.**I believe the smaller resorts near park are a different commodity than larger ones not near parks, so I pretty much used those examples because of VGF currently being sold and soon to be Polly.***This is how I figured it.

200 Point Purchase Analysis

1996 Buyer BWV (first dvc close to parks)

62.75 pp (48 year contract 2042 expiration)

48 x 200= 9600 points purchased

62.75 x 200= $12,550 purchase price

$12,550/9600=**$1.30 per point


2014 Buyer BWV

80 pp (28 year contract 2042 expiration)

28 x 200= 5600 points purchased

80 x 200= $16,000 purchase price

$16,000/5600= $2.85 pp


Adjusted for inflation using an inflation calculator:


Something purchased for in 1996 for $1.30 pp adjusted for inflation would cost $1.91pp*today.**Therefore on this resort, buying at the opening price, adjusted for inflation, you made out pretty well from buying the same resort*today*with the reduced points purchased.**In other words the 5600 points purchased at the boardwalk adjusted for inflation and points used should cost about $10, 696.*If you buy the 200 points at $80 paying 16k, it was a lot better to buy early factoring in inflation and expiration date (useful life)

*

BCV 2002 buyer

80 pp (40 year contract 2042 expiration)

40 x 200 = 8000 points purchase

$80 x 200 = $16000 purchase price

$16,000/8000 = $2.00 pp

BVC 2002 buyer


95 pp (28 year contract 2042 expiration)

28 x 200 = 5600 points purchased

$95 x 200 = $19000

$19000/5600 = 3.39 pp


Adjusted for inflation using an inflation calculator:


Something purchased for in 2002 for $2.00 pp adjusted for inflation would cost $2.57 pp*today.**Therefore on this resort, buying at the opening price, adjusted for inflation, you made out pretty well from buying the same resort*today*with the reduced points purchased.**In other words the 5600 points purchased at the Beach Club adjusted for inflation and points used should cost about $14,392.*If you buy the 200 points at $95 paying 19k, it was a lot better to buy early factoring in inflation and expiration date (useful life)


Not trying to cherry pick, or as some said, trying to justify my purchase.**I know what I bought, I know what I paid and I did my own analysis.**I just don’t feel like typing anymore.**You can do your own analysis anyway you want, or use what I did above on each resort.

All is I wanted to point out is the resale market is a great way to buy in.**However, if you have the money buy the new resorts early before prices sky rocket on that resort, historically it has worked out better than waiting to by resale down the line in many (not all)* cases.**So if you are loving the Polly buy early and don’t wait for the great deal on resale,**just my opinion.


Love,


Johnny D

 

[Minniesgal]

You can buy anything direct. Just be firm in telling them you want X resort (AKV, BC etc) and they will sell it to you direct. The "there are no other options" is just a sales tactic.

Yea but they are out I'd points at many resorts and have quite long waiting lists

 

[Dean]

Always interesting points of view, especially when it comes to how people do their math and analysis to determine if it is personally worth it.

My original post was meant to let people know that forgoing a new resort at its opening price, to wait for the decline on the resale market does not really save you much it most situations.**I believe the smaller resorts near park are a different commodity than larger ones not near parks, so I pretty much used those examples because of VGF currently being sold and soon to be Polly.***This is how I figured it.

200 Point Purchase Analysis

1996 Buyer BWV (first dvc close to parks)

62.75 pp (48 year contract 2042 expiration)

48 x 200= 9600 points purchased

62.75 x 200= $12,550 purchase price

$12,550/9600=**$1.30 per point


2014 Buyer BWV

80 pp (28 year contract 2042 expiration)

28 x 200= 5600 points purchased

80 x 200= $16,000 purchase price

$16,000/5600= $2.85 pp


Adjusted for inflation using an inflation calculator:


Something purchased for in 1996 for $1.30 pp adjusted for inflation would cost $1.91pp*today.**Therefore on this resort, buying at the opening price, adjusted for inflation, you made out pretty well from buying the same resort*today*with the reduced points purchased.**In other words the 5600 points purchased at the boardwalk adjusted for inflation and points used should cost about $10, 696.*If you buy the 200 points at $80 paying 16k, it was a lot better to buy early factoring in inflation and expiration date (useful life)

*

BCV 2002 buyer

80 pp (40 year contract 2042 expiration)

40 x 200 = 8000 points purchase

$80 x 200 = $16000 purchase price

$16,000/8000 = $2.00 pp

BVC 2002 buyer


95 pp (28 year contract 2042 expiration)

28 x 200 = 5600 points purchased

$95 x 200 = $19000

$19000/5600 = 3.39 pp


Adjusted for inflation using an inflation calculator:


Something purchased for in 2002 for $2.00 pp adjusted for inflation would cost $2.57 pp*today.**Therefore on this resort, buying at the opening price, adjusted for inflation, you made out pretty well from buying the same resort*today*with the reduced points purchased.**In other words the 5600 points purchased at the Beach Club adjusted for inflation and points used should cost about $14,392.*If you buy the 200 points at $95 paying 19k, it was a lot better to buy early factoring in inflation and expiration date (useful life)


Not trying to cherry pick, or as some said, trying to justify my purchase.**I know what I bought, I know what I paid and I did my own analysis.**I just don’t feel like typing anymore.**You can do your own analysis anyway you want, or use what I did above on each resort.

All is I wanted to point out is the resale market is a great way to buy in.**However, if you have the money buy the new resorts early before prices sky rocket on that resort, historically it has worked out better than waiting to by resale down the line in many (not all)* cases.**So if you are loving the Polly buy early and don’t wait for the great deal on resale,**just my opinion.


Love,


Johnny D

I think we would all agree there is some inherent protection and benefit in owning a higher end more in demand resort like VGF than say OKW or SSR as the other WDW extreme. And if the difference in cost was minimal, it would make sense to buy a higher end option than a lower end one all else being equal. Just like it makes sense (currently) to break up a contract, where possible and does not add cost, into smaller contracts. However, there IS a cost and there are potential downsides. For VGF that'll almost certainly be increasing dues just like it has been for BLT. There were quite a few here with BLT trying to justify the purchase there on the basis of lower dues alone as a long term savings. Some of us tried to tell them they'd go up and that compared to SSR there likely wouldn't be long term savings on the dues alone much less enough to justify the much higher up front costs. The issue for VGF is simply at what cost to get the advantages noted which really are very few and important only to a small subset of owners. And I personally think VGF is an even higher cost/more specialty option that BLT is/was.

Personally I need more return than simply diving the purchase price over the RTU period. I want a ROP in around 10 years as I would any other high risk venture. Currently one would also have to account for the difference in price between the low end of say SSR and the high end from an investment standpoint, I'd use 8% after taxes, YMMV. Plus, even for a resale lower end purchase I feel one needs to account for at least half (really more) the cost as long term investment dollars and consider long term costs as well. In my mind it'd look something like this. For a lower resale purchase like SSR half the dollars with MM returns and half at 8% plus yearly dues increase by 4%. reduced by the amount of the vacation one would have taken if done on cash not SSR rack rates or similar. This is simply the cost of owning DVC vs not. Then between SSR & VGF it'd be the full difference at investment return rates reduced by the appropriate vacations once the other money was used which is the cost of VGF compared to SSR all else (# of points) being equal.

Certainly, IF one was going to buy VGF or the Poly coming up, and that was set, may as well buy day 1. As I've stated before, I don't think the price will go down quickly enough or low enough to justify waiting then buying resale later as a purposeful choice. Such resale buyers likely would save money but they'd lose out on a few years of points usage. However, the amount of dollars involved make VGF an unreasonable choice to use routinely for items that are money losing (like DCL) or for things one could get using much cheaper points such as SSR resale. The other option that is appealing and has some potential value is the fixed week option.

Still, far too many people will overpay and use it poorly where something much cheaper would have done essentially everything they needed. Of course many will not know better such as those who get roped in to the retail sales without the knowledge represented here, but some will still do so inexplicably with the potential info that it's not the best choice. The number that buy VGF and use it in such a way to actually recoup the value (never will the costs) will be small overall though for those with the knowledge represented here and on similar sites, they will tend to make better choices than the rest. Even with all the knowledge and info, we'll see some make poor choices buying VGF just like we have for all the newer resorts.

 

[buck4568]

Resales are fine if you are just going to the parks for the rest of your life!

We were fortunate to purchase all our points before the changes in ownership rules in March 2011 as to purchases being direct from DVC or a resale from outside DVC. We plan on experiencing all options for vacations through DVC and we have done that many times already.

"Under the new policy, Members who purchase from anyone other than Disney Vacation Development, Inc., on or after March 21, 2011, will not be eligible to use those Vacation Points to make reservations within the Concierge Collection, the Disney Collection or the Adventurer Collection. Those Vacation Points will instead be valid only for reservations at Disney Vacation Club resorts, as well as for RCI exchanges, Club Cordial and Club Intrawest."

Losing the use of points in all those travel options certainly reduces the value of resales.

 

[Johnny D]

I think we would all agree there is some inherent protection and benefit in owning a higher end more in demand resort like VGF than say OKW or SSR as the other WDW extreme. And if the difference in cost was minimal, it would make sense to buy a higher end option than a lower end one all else being equal. Just like it makes sense (currently) to break up a contract, where possible and does not add cost, into smaller contracts. However, there IS a cost and there are potential downsides. For VGF that'll almost certainly be increasing dues just like it has been for BLT. There were quite a few here with BLT trying to justify the purchase there on the basis of lower dues alone as a long term savings. Some of us tried to tell them they'd go up and that compared to SSR there likely wouldn't be long term savings on the dues alone much less enough to justify the much higher up front costs. The issue for VGF is simply at what cost to get the advantages noted which really are very few and important only to a small subset of owners. And I personally think VGF is an even higher cost/more specialty option that BLT is/was.

Personally I need more return than simply diving the purchase price over the RTU period. I want a ROP in around 10 years as I would any other high risk venture. Currently one would also have to account for the difference in price between the low end of say SSR and the high end from an investment standpoint, I'd use 8% after taxes, YMMV. Plus, even for a resale lower end purchase I feel one needs to account for at least half (really more) the cost as long term investment dollars and consider long term costs as well. In my mind it'd look something like this. For a lower resale purchase like SSR half the dollars with MM returns and half at 8% plus yearly dues increase by 4%. reduced by the amount of the vacation one would have taken if done on cash not SSR rack rates or similar. This is simply the cost of owning DVC vs not. Then between SSR & VGF it'd be the full difference at investment return rates reduced by the appropriate vacations once the other money was used which is the cost of VGF compared to SSR all else (# of points) being equal.

Certainly, IF one was going to buy VGF or the Poly coming up, and that was set, may as well buy day 1. As I've stated before, I don't think the price will go down quickly enough or low enough to justify waiting then buying resale later as a purposeful choice. Such resale buyers likely would save money but they'd lose out on a few years of points usage. However, the amount of dollars involved make VGF an unreasonable choice to use routinely for items that are money losing (like DCL) or for things one could get using much cheaper points such as SSR resale. The other option that is appealing and has some potential value is the fixed week option.

Still, far too many people will overpay and use it poorly where something much cheaper would have done essentially everything they needed. Of course many will not know better such as those who get roped in to the retail sales without the knowledge represented here, but some will still do so inexplicably with the potential info that it's not the best choice. The number that buy VGF and use it in such a way to actually recoup the value (never will the costs) will be small overall though for those with the knowledge represented here and on similar sites, they will tend to make better choices than the rest. Even with all the knowledge and info, we'll see some make poor choices buying VGF just like we have for all the newer resorts.

Always enjoy your posts Dean. I agree with alot of what you said not all. Not worth parsing the differences. I have stayed at all DVC resorts and highly prefer Grand Floridian. BTW...what ever happened to VGF Ben? I miss those Dean vs. Ben battles. Lol