Pondering DVC purchase - feedback requested

[mangar]

I've been lurking on the DIS boards for months and I'm thinking of going DVC after my Disney trip last month. I'm aware that there are some pretty strong opinions on Direct vs. Resale and while I want feedback, please don't hijack this thread to continue the battle.

Direct vs Resale
Everyone in my family loves the Poly so that will be our home resort. Obviously it'll be a moot point if they don't build it, but I'm pretty sure its going to happen. With that said, there will be a limited Poly resale market for years and I'm sure Disney will be executing ROFR on anything from it for some time, especially if they aren't sold out. Ergo, if I want a Poly DVC in the next 5 years I will have to go Direct. Having the Poly as my home resort assures me that I would have the best chance at getting the reservation I want (11 month vs. 7 month) since Poly has the best repeat visit rate of all of the Disney properties and seems wildly popular with everyone. On a side note, there would not be any financing done on the purchase.

Point Costs
I'm going to guess that the Poly point prices will be comparable to VGF since VGF is the flagship resort and I can't see them going up much higher (or going down much either). The current VGF point cost is 199 for a week at Studio...If I went with 400 points for the Poly that should get me 2 weeks at a Studio or 1 week at a 1BR (would put me 7 points over - would buy one time use points or borrow against next year)...


Use Year
My understanding of the Use Year is that the points are reloaded at the begining of that month. I would be using the points in mid/late June, so what's the best UY I should get? July so the points are loaded and I can book 11 months out? You can't book unless you have enough points, right? VGF has the smallest number of DVC units. I imagine that the Poly would be the same small size and June/July are popular months. I know the timing would leave me in a bad spot if I had to cancel the June trip...not sure what the right call is on this one.

Contract Size
I have two children so I would split the points into two 200 point contracts . I could split them into 100 point ones, but what would be the advantage to do so other than making it easier to resell on the aftermarket? Since I'm planning on using them at the same time, the UY would be the same for both.

Okay, I think I've broken out my assumptions and logic...am I missing anything? Thanks in advance for the feedback!

 

[Sandisw]

I'll start with one aspect....UY has nothing to do with when you can book. Your points are there from the start, they just go from "next years" points to current UY points on that date. If you are traveling in June, a June UY is a good one as you want to travel as close to the beginning as possible to allow for the most flexibility in case you have to cancel or change your trip.

All trips can be booked 11 months in advance as everything goes by date of travel and not when you book. So, if you wanted to travel in June 2014, you could book now. With a June UY, you'd be allowed to use any banked 2013 UY points, 2014 points, and borrow 2015 UY points for that trip since it would be taking place in your 2014 UY.

Since you are looking at the rumored Poly, choosing a UY from Disney should be possible. They may offer you a different one, but if you have a preference, just make sure you make that clear.

Good luck!!

 

[disneynutz]

Buy resale or direct, which ever works best for you.

Points cost is what it is, you have no say in the matter.

UY is free insurance should you have to cancel and bank your points. Pick a UY just prior to the start of your travel season.

Smaller contracts sell more easily and at a higher price should you decide to sell but there are added costs. Look at the numbers and decide what works for you. The odds that your children will want the contracts is small IMO and the possibility is that the entire family will be over Disney after a number of years.

Bill

 

[JimMIA]

Direct vs Resale
Everyone in my family loves the Poly so that will be our home resort. Obviously it'll be a moot point if they don't build it, but I'm pretty sure its going to happen. With that said, there will be a limited Poly resale market for years and I'm sure Disney will be executing ROFR on anything from it for some time, especially if they aren't sold out. Ergo, if I want a Poly DVC in the next 5 years I will have to go Direct. Having the Poly as my home resort assures me that I would have the best chance at getting the reservation I want (11 month vs. 7 month) since Poly has the best repeat visit rate of all of the Disney properties and seems wildly popular with everyone. On a side note, there would not be any financing done on the purchase.

I think you are right about the limited resale market for Poly, but it probably will not be "...for years." It will take a few months for the first contracts to appear and probably more than a year for there to be any significant numbers of contracts available. A LOT of that, however, depends on the size of the resort. With large resorts, resale opportunities will come sooner. There were decent numbers of both SSR and AKV contracts available within months of opening...with corresponding drops in resale prices.

I would disagree about ROFR. I don't think DVC will be ROFRing Poly or GF for quite some time, because at first there will not be a big price gap between resale and direct.

But if Poly is what you really, really want, you will have to buy direct and there won't be any advantage to resale for a couple of years or so.

Use Year
My understanding of the Use Year is that the points are reloaded at the begining of that month.

That is incorrect. Use Year is the period of time during which that year's points can be used for reservations. The points are actually there several years in advance, but can't be used earlier without borrowing.

Our experience with UY is that people probably fixate on it more than they should. I see UY more as a factor to be aware of and manage than a real big deal.

We had an October UY, but took vacations mostly during the summer due to school age kids and one owner who is a schoolteacher. In more than 30 trips over 7 years, including several cancellations, we never had an issue.

In a perfect world, if you have a UY which starts a month or so prior to your normal vacation time that is theoretically better. The trick with UY is if you have to cancel a reservation after your banking window closes, you could find yourself in a position where you can't use the points and can't bank them either.

In other timeshare systems, there may be only one UY and tens of thousands of owners somehow manage without any catastrophic consequences.

Contract Size
I have two children so I would split the points into two 200 point contracts . I could split them into 100 point ones, but what would be the advantage to do so other than making it easier to resell on the aftermarket?

That's it. Smaller contracts sell quicker and 100 points or less usually ensures that the contracts are snapped up as soon as they are listed. 200 pointers would take a little longer. There may also be a marginally higher price on a smaller contract, but things could change between now and the time you sell.

Since I'm planning on using them at the same time, the UY would be the same for both.

That's nice, but NOT the reason for having the same UY.

In order to have multiple contracts held in the same account, they MUST have the same UY and they must be titled identically. With different UYs, the contracts would be in separate accounts and you'd have to transfer points back and forth, which is limited and a hassle.

 

[drusba]

Direct v Resale: How fast there are resales after a resort opens depends on those who have bought and, in the past, initial resales have usually shown up within about 6 months after the resort went on sale. As to waiting five years, that may well be correct simply because, even if Poly is built, it could easily be more than 4 years from now before it even opens. In fact, if they do something else first, such as add another tower to Contemporary, you could be be waiting 7 or more years even for a new contract from Disney. Reality is that the Poly is currently a maybe not a definite. If you want a particular resort every time you try to reserve, it is safest to own at the resort and use the 11 month window, although it is generally not difficult to get near park resorts in June at 7 months out (although VGF is unknown at this point).

Point Costs and Point Price: really cannot predict until you get to the point where it is built and is offered for sale. There are two ways for Disney to "increase" prices for a new resort: raise the per point price or raise the points per night needed. VGF when first offered at $145 and now $150 saw mainly the latter. Also, many like to believe the dollar price was reasonable because BLT was $165 and AKV also became $145 but that is the result of conditioning by Disney. What it did in a fairly short period of time (in about 1 1/2 years) was raise the price of BLT and other resorts numerous times so that they reached a level where offering VGF at $145 or $150 appeared reasonable. The same could happen before Poly ever opens so do not assume now that its price will be anywhere near $150 or even under $250. Also, if rumors about units on the water at Poly turn out to be true, or if rooms actually have MK view, Disney will be able to justify not just a higher dollar price but a higher per night point cost than VGF. Thus, you cannot assume at this point that the point per night cost will be close to VGF.

Use Year: If you usually go in June, June is an ideal use year, followed by April, March, and February. In fact, even December would be fine to avoid the possible issue you face with use year -- being able to bank points if you have to cancel a reservation. Also, you are wrong to assume June and July are high demand DVC reservation times. They are low to average periods even for July 4 time. The really high demand times are end of Sep through Marathon weekend in Jan. As to points needed, it is best to own somewhat more than you think you usually need as a hedge agains possible point shifts -- Disney can raise the points during one time of year as long as it does an equal decreaase other times. Note, you can usually have more than one years points avaialbe for a trip. For example if you have a June use year and call to reserve in July 2013 for a trip in June 2014, possible points you can use when you make that call are June 2013 points if you bank them into June 2014 year, the June 2014 points, and the June 2015 points if you borrow them into the June 2014 year.

Contract size: the only reason to have smaller contract sizes such as 100 rather than 200 is the resale market; lower point contracts sell faster and sometimes for a premium point cost than contracts with a lot of points. Your resale market is exisiting owners looking to add some additional points (usually no more than 100 and often less) and new purchasers many of whom are savvy enough to have reached the point of becoming aware of the resale market and the fact that they too will be able to resell lower point contracts faster than larger ones.

 

[nd43]

I've been lurking on the DIS boards for months and I'm thinking of going DVC after my Disney trip last month. I'm aware that there are some pretty strong opinions on Direct vs. Resale and while I want feedback, please don't hijack this thread to continue the battle.

Direct vs Resale
Everyone in my family loves the Poly so that will be our home resort. Obviously it'll be a moot point if they don't build it, but I'm pretty sure its going to happen. With that said, there will be a limited Poly resale market for years and I'm sure Disney will be executing ROFR on anything from it for some time, especially if they aren't sold out. Ergo, if I want a Poly DVC in the next 5 years I will have to go Direct. Having the Poly as my home resort assures me that I would have the best chance at getting the reservation I want (11 month vs. 7 month) since Poly has the best repeat visit rate of all of the Disney properties and seems wildly popular with everyone. On a side note, there would not be any financing done on the purchase.

Point Costs
I'm going to guess that the Poly point prices will be comparable to VGF since VGF is the flagship resort and I can't see them going up much higher (or going down much either). The current VGF point cost is 199 for a week at Studio...If I went with 400 points for the Poly that should get me 2 weeks at a Studio or 1 week at a 1BR (would put me 7 points over - would buy one time use points or borrow against next year)...


Use Year
My understanding of the Use Year is that the points are reloaded at the begining of that month. I would be using the points in mid/late June, so what's the best UY I should get? July so the points are loaded and I can book 11 months out? You can't book unless you have enough points, right? VGF has the smallest number of DVC units. I imagine that the Poly would be the same small size and June/July are popular months. I know the timing would leave me in a bad spot if I had to cancel the June trip...not sure what the right call is on this one.

Contract Size
I have two children so I would split the points into two 200 point contracts . I could split them into 100 point ones, but what would be the advantage to do so other than making it easier to resell on the aftermarket? Since I'm planning on using them at the same time, the UY would be the same for both.

Okay, I think I've broken out my assumptions and logic...am I missing anything? Thanks in advance for the feedback!

Given poly might be a long wait and potentially a very expensive first purchase, did you consider picking up a less expensive WDW resale contract in the meantime to see if you like DVC?

That way, the downside risk of selling that contract in 5 years without taking a large loss will be smaller if/when you want to purchase Poly and you will have several years to experience DVC to see if you really do want to make the larger Poly purchase.

Perhaps a 160 pt resale contract (or less) at BLT will allow you to experience DVC in a monorail resort until Poly opens. Given the longer contract life, in 5 years, BLT should still have plenty of life left for resale. If you do not like DVC, you could turn around and sell the BLT without a huge loss.

Just a thought.

BTW, we purchased VGF direct and support direct a lot here. My suggestions was purely to provide you a financial bridge to Poly that works well in 5 years without committing too much.

 

[Kidanifan08]

FYI - the one time use points are not available until the 7 month mark. Getting your home resort at the 7 month mark may be difficult at certain times of the year. You may want to build in a 5% point cushion, in case the point charts get re-allocated. You can always bank excess points and use them first for the next reservation.

 

[mangar]

Thanks for the feedback so far. I've already learned several new things on one time use points and Use Year. Keep it coming!

Regarding the suggestion of going with another DVC, I do plan on staying at a DVC location prior to purchasing but I don't have much interest in purchasing a different DVC direct. Doing BLT as a bridge via resale for a short term holding might hold some interest though.

 

[Dean]

I've been lurking on the DIS boards for months and I'm thinking of going DVC after my Disney trip last month. I'm aware that there are some pretty strong opinions on Direct vs. Resale and while I want feedback, please don't hijack this thread to continue the battle.

Direct vs Resale
Everyone in my family loves the Poly so that will be our home resort. Obviously it'll be a moot point if they don't build it, but I'm pretty sure its going to happen. With that said, there will be a limited Poly resale market for years and I'm sure Disney will be executing ROFR on anything from it for some time, especially if they aren't sold out. Ergo, if I want a Poly DVC in the next 5 years I will have to go Direct. Having the Poly as my home resort assures me that I would have the best chance at getting the reservation I want (11 month vs. 7 month) since Poly has the best repeat visit rate of all of the Disney properties and seems wildly popular with everyone. On a side note, there would not be any financing done on the purchase.

Point Costs
I'm going to guess that the Poly point prices will be comparable to VGF since VGF is the flagship resort and I can't see them going up much higher (or going down much either). The current VGF point cost is 199 for a week at Studio...If I went with 400 points for the Poly that should get me 2 weeks at a Studio or 1 week at a 1BR (would put me 7 points over - would buy one time use points or borrow against next year)...


Use Year
My understanding of the Use Year is that the points are reloaded at the begining of that month. I would be using the points in mid/late June, so what's the best UY I should get? July so the points are loaded and I can book 11 months out? You can't book unless you have enough points, right? VGF has the smallest number of DVC units. I imagine that the Poly would be the same small size and June/July are popular months. I know the timing would leave me in a bad spot if I had to cancel the June trip...not sure what the right call is on this one.

Contract Size
I have two children so I would split the points into two 200 point contracts . I could split them into 100 point ones, but what would be the advantage to do so other than making it easier to resell on the aftermarket? Since I'm planning on using them at the same time, the UY would be the same for both.

Okay, I think I've broken out my assumptions and logic...am I missing anything? Thanks in advance for the feedback!

If the Poly were my plan, I'd buy direct and pay cash. Personally I'd likely buy now resale at something like SSR so that I could buy the Poly as soon as it come on board. You'll save a little on the purchase and be able to do so a little earlier. Otherwise just be ready to hit the ground running in 2-3 years. June is your best UY as described and I do think it is important for many which UY they have.

 

[mangar]

If the Poly were my plan, I'd buy direct and pay cash. Personally I'd likely buy now resale at something like SSR so that I could buy the Poly as soon as it come on board. You'll save a little on the purchase and be able to do so a little earlier. Otherwise just be ready to hit the ground running in 2-3 years. June is your best UY as described and I do think it is important for many which UY they have.

Has Disney traditionally offered DVC members advance purchase of a new DVC site before they open it up to the public? If so, have they offered a discount to DVC members?

 

[Dean]

Has Disney traditionally offered DVC members advance purchase of a new DVC site before they open it up to the public? If so, have they offered a discount to DVC members?

Yes & Yes.

ETA: VGF was $5 a point cheaper and around 3 weeks ahead for current members.

 

[jerseyduke]

Has Disney traditionally offered DVC members advance purchase of a new DVC site before they open it up to the public? If so, have they offered a discount to DVC members?

They did with VGF.

Also I disagree with your statement about Disney exercising ROFR in the beginning for two reasons....resale prices will be high at first, and disney will not need the points to fill wait lists for points, as they will still have plenty of unsold points from the initial sales pool.

 

[mangar]

They did with VGF.

Also I disagree with your statement about Disney exercising ROFR in the beginning for two reasons....resale prices will be high at first, and disney will not need the points to fill wait lists for points, as they will still have plenty of unsold points from the initial sales pool.

My thoughts on it are that Disney will not allow resales to go through while they still have a substantial number of units to sell because it would show that they overpriced the points. Regardless of the exact behavior, I think most will agree that there will not be appreciable savings available on the secondary market for some time. I think VGF will show us how they handle the matter.

 

[Dean]

My thoughts on it are that Disney will not allow resales to go through while they still have a substantial number of units to sell because it would show that they overpriced the points. Regardless of the exact behavior, I think most will agree that there will not be appreciable savings available on the secondary market for some time. I think VGF will show us how they handle the matter.

It's unlikely ROFR will come into play for most situations early on. Early resales will likely be at a savings but not a dramatic one for other reasons, exceptions would be small packages because of the impact of closing among other issues. If one wants the Poly in the first 2 yeas or so, may as well buy retail and realize you're simply paying a lot more than you could buy at other DVC locations.

 

[DizBub]

My thoughts on it are that Disney will not allow resales to go through while they still have a substantial number of units to sell because it would show that they overpriced the points.

You may be right about VGF but this has not been the case for AKV.

They are still actively selling there and resale prices have been literally half of the direct price. They have not ROFRed much at AKV. Probably because they get so many points back through foreclosure/default.

 

[Missyrose]

My thoughts on it are that Disney will not allow resales to go through while they still have a substantial number of units to sell because it would show that they overpriced the points. Regardless of the exact behavior, I think most will agree that there will not be appreciable savings available on the secondary market for some time. I think VGF will show us how they handle the matter.

When Disney has millions of points (that cost them about $20-$25 per point) to sell at a new resort, they're not going to expend the effort and cost of ROFRing resale contracts at that resort (where they would have to pay $100+ per point). The ROI just isn't there at that price threshold for Disney.

 

[Minniesgal]

My thoughts on it are that Disney will not allow resales to go through while they still have a substantial number of units to sell because it would show that they overpriced the points. Regardless of the exact behavior, I think most will agree that there will not be appreciable savings available on the secondary market for some time. I think VGF will show us how they handle the matter.

Yet they have done exactly that with AKV, BLT and Aulani recently. As long as people are buying direct I don't think DVC care whether or not direct points look overpriced, at the moment they are not having any trouble finding buyers.

 

[mangar]

Thanks for the feedback everyone, it was (and still is) appreciated. I'm going to take a look at BLT resale as a precursor to going in on the Poly. While I'm a Disney fan (the rest of my family are rabid fanatics) I do understand that Disney is a business. I like to approach things in a rational, logical manner...an approach that go right out the window whenever I weigh the cost of a Disney trip against the happiness it brings my family.

Any suggestions/tips as I begin my BLT resale search?

 

[Msmithmd]

Thanks for the feedback everyone, it was (and still is) appreciated. I'm going to take a look at BLT resale as a precursor to going in on the Poly. While I'm a Disney fan (the rest of my family are rabid fanatics) I do understand that Disney is a business. I like to approach things in a rational, logical manner...an approach that go right out the window whenever I weigh the cost of a Disney trip against the happiness it brings my family.

Any suggestions/tips as I begin my BLT resale search?

Try to find a loaded (or at least, not stripped) contract. Look at the ROFR thread if you're not familiar with these terms. The resale market tends to undervalue the loaded contracts and overvalue the stripped ones, relative to one another. Plus, it would be awfully painful to pay dues next January if some or all of those coming 2014 points had already been used.

Buy somewhere around 5-10% more points than you think you will need.

Be prepared to pay a small premium for two little contracts versus one larger contract, so if you want to keep "part" of your BLT points later, you can do so without selling it all off and rebuying. Don't go crazy on this and think spending $120-130/pt for tiny stripped contracts is a good idea, though.

Be prepared to be patient. A seamless ROFR process and a responsive, prompt seller will still likely be three months to completion. But then again, reviewing recent threads on how long people have been wait listing to buy BCV direct (6 months + !!) the resale process may not be longer than the direct one is the current market.

Choose your contract, not your resale broker. What I mean is that you should follow all of their websites simultaneously and buy via the first contract that matches your price, points, and terms. And don't hesitate to bid what you think is fair, but it seems to be a sellers market so choice contracts may go for full ask price. Big difference versus just a year ago...

Good luck!