Not drinking the cool aid on resale!!

[Dean]

Boy you people really like to get into the details.

To make it easy to understand for most of us reading, Disney/DVC is a luxury vacation that will cost you a couple hundred thousand dollars over a 30 to 50 year period and Disney will make some insane profit.

Bill

Bill, IMO, if one isn't willing to do this type of analysis they likely shouldn't buy in, esp for those new to DVC. It's a little different for someone like you and I that have tons of both knowledge and experience. VGF is a great example as not only is it easy for it to cost a buyer more than if they simply paid cash, this is likely to be the largest group of owners there by far, esp for those who are new to DVC. If anyone wants to throw money away just to be a member, that's their choice, but it'd seem foolish to me to approach it that way. And as noted (forget this thread or another today) those that don't have to think about costs aren't going to buy DVC anyway, they'll just reserve a suite. So the group where DVC makes sense is fairly small and the group where something like VGF makes sense really is a very narrow window and most of those really should seriously consider a fixed week option anyway because owning doesn't guarantee access.

 

[DougEMG]

Probably a different way of looking at the TMV issue I raised above. I know you know this but for the sake of discussion for others who may read here I will say that for a very small subset of people it likely is worth it. Basically those who can truly afford it (pay cash, not affect their life in general by doing so) and who will actually use and take advantage of those points for VGF. They will basically be 2 groups and 2 groups only. Those who have both enough DVC knowledge AND experience to know they'll use those points that way and those that are GF only people and would't buy in otherwise but have enough Disney experience to know that. OTOH, those who buy in new to DVC with VGF as their first purchase without that knowledge AND experience are unlikely to get the the value and really are unlikely to save money over cash other than the few that luck out and end up in one of the 2 groups above anyway, something they have NO way of knowing up front. Then there will be those that end up buying VGF but feel trapped due to the realities of the costs and value lost using DVC for other things.

Unfortunately for me I'm in the group that would love to own at VGF, but just can't afford it.


We will be staying there a week this Sept (my daughter really wants to try it out) and even though I'm looking forward to it, deep down I'm hoping I don't like it that much as I really hate paying double the points as compared to our normal BWV standard view room.

 

[sndral]

Unfortunately for me I'm in the group that would love to own at VGF, but just can't afford it.


We will be staying there a week this Sept (my daughter really wants to try it out) and even though I'm looking forward to it, deep down I'm hoping I don't like it that much as I really hate paying double the points as compared to our normal BWV standard view room.

Sigh, I can so relate, I stayed @ the Poly, thinking I would love it and did not, so I'm not the least interested in Poly DVC.
Then I bit the bullet and stayed @ the GF (regular room before DVC,) thinking I'd get it out of my system like w/ the Poly - but I loved the GF, so that plan backfired. I think I'll stay far away from any DVC sales tours next visit as otherwise I might find myself heading home w/ a rather expensive souvenir.

 

[Dean]

Unfortunately for me I'm in the group that would love to own at VGF, but just can't afford it.


We will be staying there a week this Sept (my daughter really wants to try it out) and even though I'm looking forward to it, deep down I'm hoping I don't like it that much as I really hate paying double the points as compared to our normal BWV standard view room.

If you want to stay there occasionally, plan at 7 months out and use the wait list; you really should be OK though for a periodic trip. As I've stated, I likely would have bought a fixed week there were we not at a lull with our finances due to having just built a house. It's a nice resort and nice location for many but it's not quite all some think it is from an ownership and "investment" standpoint. The best comparison I can think of is the car companies that have a lower level and upper level such as Toyota/Lexus. Is it worth buying the same basic car from the higher level vs the lower level. Same mechanics, minimally better warranty, different cosmetics, a fair amount more cost. The main difference is that the cost is far more divergent here than in that example.

 

[Dean]

Sigh, I can so relate, I stayed @ the Poly, thinking I would love it and did not, so I'm not the least interested in Poly DVC.
Then I bit the bullet and stayed @ the GF (regular room before DVC,) thinking I'd get it out of my system like w/ the Poly - but I loved the GF, so that plan backfired. I think I'll stay far away from any DVC sales tours next visit as otherwise I might find myself heading home w/ a rather expensive souvenir.

The main issue here is you don't really know where your preferences will be after a few years and a number of trips. This is the problem for those that are both fairly new to Disney and/or to DVC, they likely don't have the info to make the ultimate long term decision. Even then, most don't have enough other timeshare knowledge/experience to compare there as well and I think that's a mistake for many. I believe there are a number of people where non DVC timeshares are actually their better choice and they simply don't know it. That's one of the reasons I feel it's better to underbuy resort/points/etc for most. Better to make a $12k mistake and a $30K one.

 

[sndral]

The main issue here is you don't really know where your preferences will be after a few years and a number of trips. This is the problem for those that are both fairly new to Disney and/or to DVC, they likely don't have the info to make the ultimate long term decision. Even then, most don't have enough other timeshare knowledge/experience to compare there as well and I think that's a mistake for many. I believe there are a number of people where non DVC timeshares are actually their better choice and they simply don't know it. That's one of the reasons I feel it's better to underbuy resort/points/etc for most. Better to make a $12k mistake and a $30K one.

I wrote those comments in jest, but thanks for the advice - which it appears I've followed (I even stayed in a villa at the resort I wanted to buy before I bought there to 'test drive' it.)
Frankly, my decades of experience going to DL and WDW weren't much help in deciding whether DVC was right for me financially, other than I knew that a lifetime of annual Disney trips (starting at age 5 - before WDW existed) was a good predictor that I'd use the points going forward if I bought them.

 

[Dean]

I wrote those comments in jest, but thanks for the advice - which it appears I've followed (I even stayed in a villa at the resort I wanted to buy before I bought there to 'test drive' it.)
Frankly, my decades of experience going to DL and WDW weren't much help in deciding whether DVC was right for me financially, other than I knew that a lifetime of annual Disney trips (starting at age 5 - before WDW existed) was a good predictor that I'd use the points going forward if I bought them.

My thoughts were more general to others who might read this thread as your situation seems set, a posting approach I often use.

 

[ELMC]

Unfortunately for me I'm in the group that would love to own at VGF, but just can't afford it.

Can't afford it or don't want to spend the money? There is a significant difference between the two. Obviously I don't expect you to answer this question because I don't want you to divulge information about your personal finances, but I think it's a good question to ask. I feel that many can afford a cash purchase at VGF but are not able to justify the cost as compared to other options.

 

[Dean]

Can't afford it or don't want to spend the money? There is a significant difference between the two. Obviously I don't expect you to answer this question because I don't want you to divulge information about your personal finances, but I think it's a good question to ask. I feel that many can afford a cash purchase at VGF but are not able to justify the cost as compared to other options.

Unfortunately the reverse is the far too common answer, those that buy but really can't afford it.

 

[DougEMG]

Can't afford it or don't want to spend the money? There is a significant difference between the two. Obviously I don't expect you to answer this question because I don't want you to divulge information about your personal finances, but I think it's a good question to ask. I feel that many can afford a cash purchase at VGF but are not able to justify the cost as compared to other options.

I'm not a millionaire, just middle class, so one way I look at what I can afford is what do I have to give up to get it because I don't have the money to just buy everything I want.

As an example for the same price I could probably

(1) buy 100 VGF points and stay 5 nights in a VGF studio
(2) buy 200 BWV points and stay 10 nights in BWV standard studio
(3) buy 200 BWV points, stay for 5 nights, rent out 100 points for $1300 and spend that money on something else.

I would rather do option 1 or 2, so I can't afford option 1 since I would have to give up the other options.


For someone that wants option 1 compared to all other options they have, no problem.

So while technically I could buy VGF if I want to, I do not like what I would have to give up to do so.

 

[disneynutz]

Unfortunately the reverse is the far too common answer, those that buy but really can't afford it.

And buying opens the door to additional Disney spending that can really add up!

During our emotional Disney/DVC growth phase we were vacationing at WDW 3 times per year for up to 28 days total. With travel, food, admission, and Disney stuff, we were spending 10 grand per year not including buying our DVC contracts and dues.

Bill

 

[Spork24]

Timing was everything for us. 10 years ago when we thought about DVC for the first time, we decided to build a new house instead. Second time we considered it was when they built BLT, so we took the tour and loved it. Problem was we would have to finance it, and we weren't doing that. Third times a charm as they say, and we're finally buying in through resale with cash at 95$pp BLT. Sure I've lost a few years, but I'm ok with getting a hand me down DVC. So I guess I am beating my chest and drinking the kool aid.

We had a similar experience with BLT. We looked at it in 2010 direct, but couldn't swing a cash purchase then. Was thrilled to get it resell in 2013 when we had the cash. Plus we did save a few dollars, (of course we spent several thousand dollars on disney rooms in that span that we would have saved had we bought in 2010)

We looked at buying direct in 2013 but we really wanted bay lake and they wanted us to go on a wait list to pay 160 per point. No Sir!

 

[btwiceborn]

The initial purchase price will most likely be a small portion of your overall costs. Estimating dues 30-50 years out with even 2% annual increases means that the purchase ends up being 20-40% of the total.

 

[disneynutz]

The initial purchase price will most likely be a small portion of your overall costs. Estimating dues 30-50 years out with even 2% annual increases means that the purchase ends up being 20-40% of the total.

Newer resorts are seeing increases in the 5% to 8% range.

Bill

 

[chalee94]

The initial purchase price will most likely be a small portion of your overall costs. Estimating dues 30-50 years out with even 2% annual increases means that the purchase ends up being 20-40% of the total.

for most of us, dollars today are worth more than dollars in the future. it's called the "time value of money." it's part of why people expect to repaid with interest in the future to give up the use of their money today.

maintenance fees and their increases are an important consideration but your numbers are seriously oversimplified...and not much of a justification for throwing away money "right now" to buy direct.

 

[Dean]

The initial purchase price will most likely be a small portion of your overall costs. Estimating dues 30-50 years out with even 2% annual increases means that the purchase ends up being 20-40% of the total.

I know this seems to be standard thinking but I don't believe it to be accurate. If you take the purchase price and the time value of money it can actually be more than the projected yearly dues, esp for retail purchases. In looking at any purchase I set aside a portion of the up front to plan to use up within 5 yrs, I count that at money market rates. I take the rest and look at it as real investments and use 8% before long term cap gains taxes as a conservative number. Then I assume return of principle over 10 years within the purchase.

 

[Johnny D]

I know this seems to be standard thinking but I don't believe it to be accurate. If you take the purchase price and the time value of money it can actually be more than the projected yearly dues, esp for retail purchases. In looking at any purchase I set aside a portion of the up front to plan to use up within 5 yrs, I count that at money market rates. I take the rest and look at it as real investments and use 8% before long term cap gains taxes as a conservative number. Then I assume return of principle over 10 years within the purchase.

I don't think DVC can be looked at as an investment. It has a Useful life with a fixed end date which will end up at zero. One is consuming a deflating asset every point they use. This is future vacation purchasing not an index 500 mutual fund. This thread was started with a buy at opening price of a new resort vs. Buying at a price years down the road. Not a buy vs. Dont buy or is dvc worth it. On page 4 of this thread I showed my analysis. Even using the fan favorite SSR and factoring in inflation and the reduced points one buys 10 years down the road, a 200 point purchase is around the same dollar value. You use less cash because you bought less of something. That works best for many because they spend less money and don't need a long contact. I believe the secondary market is pretty efficient and prices reflect inflation and reduced points purchased. That is different from saying you can't save money and pay less with resale. You absolutely can and do. Value and price are different. Though I to believe prices are high and would restrain from buying Vgf at $165, the $145 AND $150 buyers will find they did OK selling in 10 years.

 

[DVCMomBLT]

I don't think DVC can be looked at as an investment. It has a Useful life with a fixed end date which will end up at zero. One is consuming a deflating asset every point they use. This is future vacation purchasing not an index 500 mutual fund. This thread was started with a buy at opening price of a new resort vs. Buying at a price years down the road. Not a buy vs. Dont buy or is dvc worth it. On page 4 of this thread I showed my analysis. Even using the fan favorite SSR and factoring in inflation and the reduced points one buys 10 years down the road, a 200 point purchase is around the same dollar value. You use less cash because you bought less of something. That works best for many because they spend less money and don't need a long contact. I believe the secondary market is pretty efficient and prices reflect inflation and reduced points purchased. That is different from saying you can't save money and pay less with resale. You absolutely can and do. Value and price are different. Though I to believe prices are high and would restrain from buying Vgf at $165, the $145 AND $150 buyers will find they did OK selling in 10 years.

Whether you paid $145, 150 or 165 will be irrelevant in the scheme of things in 10 years.

 

[bcvlover]

I love my DVC, but I would never consider it an investment.

 

[Dean]

I don't think DVC can be looked at as an investment. It has a Useful life with a fixed end date which will end up at zero. One is consuming a deflating asset every point they use. This is future vacation purchasing not an index 500 mutual fund. This thread was started with a buy at opening price of a new resort vs. Buying at a price years down the road. Not a buy vs. Dont buy or is dvc worth it. On page 4 of this thread I showed my analysis. Even using the fan favorite SSR and factoring in inflation and the reduced points one buys 10 years down the road, a 200 point purchase is around the same dollar value. You use less cash because you bought less of something. That works best for many because they spend less money and don't need a long contact. I believe the secondary market is pretty efficient and prices reflect inflation and reduced points purchased. That is different from saying you can't save money and pay less with resale. You absolutely can and do. Value and price are different. Though I to believe prices are high and would restrain from buying Vgf at $165, the $145 AND $150 buyers will find they did OK selling in 10 years.

DVC is an investment whether one wants to admit it or not. There IS a financial component, if not, why even question the value, just pay whatever Disney is charging (what some seem to do anyway it seems). IMO there is a value and enjoyment standpoint but there is the financial component. Unless the purchase makes sense financially, it's foolish to buy in. Why pay the same or more than you could get with cash and have more options, safety and control? I couldn't disagree more on the efficient of the resale market, DVC is better than most but certainly not efficient. I don't disagree that buying a "lessor" resort contract (size or home resort) has the potential for a higher return as a % of a current retail purchase, however, it has a much lower return globally compared to paying less for SSR or similar and leaving the rest in a true investment. The difference is truly sunk costs unless one plans to sell later and any RTU difference and benefit comes at the end, starting at 2054 for SSR. The additional years add minimal to very modest additional value all else being equal that far out, it's a large % as the RTU grows closer as in the 2042 resorts.

Whether the additional cost is worth it depends on many factors including personal preference. Since we can't measure that and don't want to delve into any given individual's specific finances, all we really can do is talk about principles. For some the additional costs for VGF, or the Poly coming up, will be worth it because they will get the additional potential value. The difference in purchase between SSR & VGF 200 points is currently about $18K up front, almost $40K at 10 years (ignoring the additional dues which are almost certain to increase to more than $1 pp over SSR within 5 years) and almost $400K over the life of the SSR contract.

As I've said before, I don't feel it is a reasonable choice to purposefully wait on buying VGF anticipating cost savings. While I believe there will be some, I do not feel they will be enough to justify the loss of usage and other related factors. That said, someone looking to buy in 5 years at say $120 resale vs $180 retail will be faced with a significantly different choice and the reasonableness of their decisions will be different then compared today in all likelihood.