Purchasing resale...and then reselling later?

[itutorfortravel]

Hi all, we have considered DVC a number of times over the past several years. We have friends who own and love it and we have seen multiple presentations when traveling on DCL.

This year is a "big" birthday for me and I have asked for a DVC membership! Hey, me might as well go big haha!

Some "fivens" if we purchase:

-we would do resale because of the cost...the lost benefits of resale vs direct are not an issue to us.

-We have one child, 12, and she is getting old enough to take friends on vacation so we thought DVC would work well for that purpose.

-I definitely see us using the DVC for at least 10 years.

-We were thinking of VWL or BWV because we love the theming of both.

(Resale looks to be about $70-$80 pp at those resorts at this time.)

My question is...

What do you think we could expect we could get (price per point) if we sell our points in 10 years? I kind of like the shorter length contact expiration of 2042 in the event we don't sell but don't know how that might affect resale if we do sell...I know there's no way to know for sure what the price would be, but since the resorts I'm looking at are over 10 years old I thought someone might be able to compare prices then to what resale is now.

Also, if we buy now and resell in 10 years will we get good value for our money or would it be better to just rent points?

If it makes any difference we are looking at purchasing 150-200 points.

Thank you!!

 

[disneynutz]

If you plan on zero return, you will be happy if it sells for more.

We sold several contracts last year and took a $10,000 loss, soon after the market shifted and the resale prices increased so you never know.

Bill

 

[DannysMom]

I think asking folks to predict resale prices a decade out, is a bit silly.

There really is no model to predict resale prices, even in the shorter term, much less 10 years or more out. Will DVC institute further resale restrictions? Will they offer extensions to the current contracts that expire in 2042? Will they take back the older resorts, and demolish them to rebuild & resell, at the new, higher direct price point? Nobody knows. Or if they know, they sure aren't saying in 2013/2014!

I bought 200 BCV pts resale in the summer of 2012, got a great deal at $65/pt. Similar contracts now are listed in the $90-100/pt range. No way I or anyone else could have predicted that. But I am not selling. I bought my points to use them, as long as I could afford to do so. DVC is a luxury purchase, NOT an investment. If at some point you decide to sell, any money you get back should be considered gravy, not something to count on, to decide if you can afford the purchase in the first place. Just my opinion, of course.

Sent from my iPad using DISBoards App, please excuse any typos or autocorrects!

 

[itutorfortravel]

Thnx for the feedback...

Just to clarify, selling later is not due to not being able to afford it but rather whether we will still use it.

I considered my question valid for the resorts I asked about since they are both over 10 years old and there are resales for those properties now. I was hoping someone could help me with the cost of one of those resorts new vs the resale cost now just as a basis of comparison. I understand that there is no way to tell with accuracy what the value will be 10 years from now as there are so many economic variables that can affect that...I was basically looking for a 10 year comparison between say 2003 and 2013 to see how much point values have diminished over time (if any).

Also, are you saying that they may tear down my property and rebuild and my contract becomes void before the expiration?

 

[DannysMom]

Thnx for the feedback... Just to clarify, selling later is not due to not being able to afford it but rather whether we will still use it. I considered my question valid for the resorts I asked about since they are both over 10 years old and there are resales for those properties now. I was hoping someone could help me with the cost of one of those resorts new vs the resale cost now just as a basis of comparison. I understand that there is no way to tell with accuracy what the value will be 10 years from now as there are so many economic variables that can affect that...I was basically looking for a 10 year comparison between say 2003 and 2013 to see how much point values have diminished over time (if any). Also, are you saying that they may tear down my property and rebuild and my contract becomes void before the expiration?

No, sorry I was unclear. In 2042 the contracts all expire for a number of resorts, OKW, BWV, BCV & VWL. They offered an extension at OKW, so we have reason to believe that OKW will continue in some form until the further expiration date of 2057. The other resorts, who knows? No other extensions have yet been offered. In 2042, they may decide that rebuilding those resorts will be their best money making strategy. Or maybe not.

But the term left on the contract will certainly have an effect on the resale prices.

I think differences in price 2003-2013, would have more to do with state of the economy, and give you no useful information to try to figure out potential prices from 2014 to 2024.

Sent from my iPad using DISBoards App, please excuse any typos or autocorrects!

 

[DVC Dude]

I will try to take an educated guess as I originally bought VWL over 10 years ago and can tell you about the trend.

I personally think the resale prices will be about the same as they are now and possibly a tiny bit higher, but the range of resale prices will be 20% between high and low so it depends on how lucky or skillful you are.

I also think BWV will hold their value more than VWL as the location for adults and F&W events is very popular.

So if you buy BWV cheap enough or buy a nice loaded contract with current and banked points, use them for ten years and sell, I would bet you would either break even or may make a $10-20pp.

Of course and recession or financial market turbulence will affect the price.

I would say the new price from Disney will be over $200pp at that time, so that may help keep resale prices up.

 

[itutorfortravel]

I will try to take an educated guess as I originally bought VWL over 10 years ago and can tell you about the trend.

I personally think the resale prices will be about the same as they are now and possibly a tiny bit higher, but the range of resale prices will be 20% between high and low so it depends on how lucky or skillful you are.

I also think BWV will hold their value more than VWL as the location for adults and F&W events is very popular.

So if you buy BWV cheap enough or buy a nice loaded contract with current and banked points, use them for ten years and sell, I would bet you would either break even or may make a $10-20pp.

Of course and recession or financial market turbulence will affect the price.

I would say the new price from Disney will be over $200pp at that time, so that may help keep resale prices up.

Thank you so much! This is exactly what I hoped someone could tell me...I know there's no guarantees on anything tho...but the trend over the past 10 years seems favorable for being able to at least break even in 10 years from now...we shall see how it all works out!

 

[davidl81]

I would think break even at 10 years since there will be still close to 20 years left on the contract (and I do think direct prices will be close to 200 pp). Your true cost will be your MF and I guess you could look at the lost interest you would have made with your cash instead of buying dvc. All in all I think it would still turn out to be a good value if you do decide to sell after 10 years.

 

[DVC Dude]

-We were thinking of VWL or BWV because we love the theming of both.

(Resale looks to be about $70-$80 pp at those resorts at this time.)

It is interesting you chose the two resorts that I personally do not want to own. Not that there are any issues with these two resorts as they are awesome and I was just at BWV over Christmas and it was wonderful and I had dinner at Artist Pointe at VWL and it was even nicer in the lobby.

The sticking issue for me with those two resorts are the high annual dues and the RTU expires 13 years earlier than SSR or BLT.

Thus, I would suggest that you also consider SSR (best bargain out there now) or even BLT (low dues and longer RTU and on the monorail loop).

However, if BWV and VWL are the two locations you WANT to stay in the most to use the 11 month window, then they are good choices for YOU.

 

[Nabas]

Historically, DVC Maintenance Fees (MF) and cash rooms from Disney have been increasing by about 3% per annum.

2013 room rates for a cash room at the Beach Club in early July (summer vacation season) were $448/night (including tax). With an annual increase of 3%, this might be $602/night in 2023 or $4214/week. Even with a 30% discount (not guaranteed, especially for the more popular times of the year), this comes out to $2950/week.

2013 MF at SSR were $4.81/point. In 10 years, this might be $6.46/point. It takes 134 points to stay in a BCV Studio for one week in July, or $866/week in 2023 MF. In 10 years, difference between renting and using DVC points might be about $2084 ($2950 – $866) per year. (It seems to me SSR members love to boast how they always are able to book elsewhere. )

Let’s assume a person wants to commit to a WDW vacation for only 5 years in 2023, a pessimistic duration given DVC's current pricing structure, and then just throw away their DVC membership, which is unrealistic. Theoretically, this person would be willing to pay up to $10,420 ($2084/yr X 5 yrs) for a 134-point DVC membership at SSR in 2023. Beyond the ancillary benefits of DVC membership, let’s assume they need a real financial incentive to purchase a DVC and to take into account other closing costs, so they’d only be willing to pay $8000 for the actual points. At 134 points, this comes out to $60/pt ($8000 / 134) in 2023.

As long as Disney does a competent job of maintaining demand for WDW and doesn't drastically change the way it prices its onsite resorts, there will always be a percentage of the population that will view DVC as a viable economic option.

 

[dundey]

To me the best value would be to buy a BLT resale.
It has an expiration of 2060, so in 10 years will still have an effective use life of over 35 years. That should keep prices resale high and demand consistent.

I would stay away from the resorts that are less in years than BLT and SSR.

 

[DizBub]

Don't forget that there is value in actually USING your membership.

We have only been members for a little over 4 years. With resale prices the way they are right now we could break even on our contracts if we sold. I cannot put a value on the trips we have taken (over a dozen) and the memories made.

 

[Mickey'sApprentice]

Don't forget that there is value in actually USING your membership. We have only been members for a little over 4 years. With resale prices the way they are right now we could break even on our contracts if we sold. I cannot put a value on the trips we have taken (over a dozen) and the memories made.

I agree.

 

[a742246]

If you are planning to vacation during Christmas. I would buy where you want to stay. There will be limited rooms available during Christmas week at the 7 months window.

 

[Dean]

I wouldn't buy if you think you are likely to sell in 10 yrs. Personally I use 10 years as the return of principle anyway so I'd definitely use that time from for your savings calculation if you are thinking to buy in this situation.

 

[Belle & Ariel]

We bought 150 BW points a little over 5 years ago at $80 per point so spent about $12000 plus about $500 closing.
We rented about 180 through Davids and got nearly $2000. We have vacationed a lot and at Disney prices for Boardwalk hotel we have easily had $10000 worth of hotels in the 5 years we have owned. Our contract was loaded with banked points so we have used 6 years of points.
We could sell it for what we paid now.
A couple years ago BW points were in the 70s and maybe high 60s. The original direct price from Disney was in the 60s in the late 1990s.
I think if you used 10 years and sold you might get the per point cost but the value of the trips you have taken over 10 years are worth a lot too.
We could not stay at a value resort the same number of nights we stay in DVC for the cost of our maintenance fees. We pay about $800 in dues a year and stay about 10 to 12 nights in a studio. The values are at least $100 a night and therefore would be much more.
If you wanted to sell in ten years and the market was down, you could rent your points until it recovered and then sell them.

 

[DVCcurious]

Perhaps renting would make more sense than buying?

Renting gives you more flexibility:

- you can book any resort 11 months out if you rent points and if you buy you can only book your home resort

- if Disney offers a good deal on rack rate (40% off, free dining, etc) you can pay for your trip in cash and get this deal

- if you need the cash for an emergency you have it, and you wouldn't have to sell your DVC to get it

- if DVC prices drop in the next couple years you can buy in then

- you don't have to pay the fees to buy or the fees to sell the contract

It's possible you'd come out ahead dollars-wise by renting, and you DEFINITELY would come out ahead flexibility-wise by renting.

If VWL points were $55 like they were in Dec '12 when I bought my contract then I'd say buy, but right now they're closer to $75 and it just feels to me like right now is not a "screaming deal" time to buy into DVC.

Buying resale now will give you a "good" deal, not an "amazing" deal. I think that the added flexibility of renting outweighs the money saved by the "good" deal.

 

[Deb & Bill]

There are probably many better monetary investments than DVC. If you want to make money, don't buy DVC. If you want to vacation at WDW every year and usually stay in deluxe resorts or want the timeshare experience, buy DVC.

 

[Dean]

If you wanted to sell in ten years and the market was down, you could rent your points until it recovered and then sell them.

The issue is that DVC is a depreciating asset thus there's a good chance the market may not recover at any point in time. In addition, we're at a relatively high time right now, one that certainly isn't likely to continue. Thus it is my belief that anyone who buys right now is likely to get a lower overall value, even for resale, than one who buys in 3-4 years or one who bought resale a couple of years ago. That doesn't necessarily mean that everyone should wait a few years to buy if DVC otherwise makes sense as the cost of waiting may be more than the higher cost of buying now but for some, waiting will be the better option. It does mean that if buying DVC is borderline, it might be better to wait and see.

 

[DVC Dude]

Perhaps renting would make more sense than buying?

If VWL points were $55 like they were in Dec '12 when I bought my contract then I'd say buy, but right now they're closer to $75 and it just feels to me like right now is not a "screaming deal" time to buy into DVC.

Buying resale now will give you a "good" deal, not an "amazing" deal. I think that the added flexibility of renting outweighs the money saved by the "good" deal.

Renting is better for people that are short term DVC fans (i.e. less than 5 years of visits).

You got a screaming deal @ $55 and it may be awhile before we see that low price again. But even at todays $75, it sure beats paying $150 from Disney.

The issue is that DVC is a depreciating asset thus there's a good chance the market may not recover at any point in time. In addition, we're at a relatively high time right now, one that certainly isn't likely to continue. Thus it is my belief that anyone who buys right now is likely to get a lower overall value, even for resale, than one who buys in 3-4 years or one who bought resale a couple of years ago. That doesn't necessarily mean that everyone should wait a few years to buy if DVC otherwise makes sense as the cost of waiting may be more than the higher cost of buying now but for some, waiting will be the better option. It does mean that if buying DVC is borderline, it might be better to wait and see.

DVC for sure is a depreciating assett when looked at beginning to end, but so far, it has not behaved like that at all. OKW was about $50pp at the lowest in 1991 and then had at least 10 years or so of free tickets, now the resale price is in the $60s. So anyone that bought and still owns today has really made a great buy.

The resale market has always been strong except between 2007-2012 when it really dipped. Also, VB and HHI has always lagged the other resorts in terms of price.

We, for sure, can't say exactly what will happen, except the Disney developer prices will probably continue to go up.