Question about selling your DVC contract

[nemofans]

The only question my DH has on buying in to DVC is if 15 yrs from now, we decide to sell our contract. Would we take a loss, break even, or what? How does DVC do w/members selling? From my understanding, Disney has a say on how the pricing goes w/resales. So, do they keep it from anyone taking a big loss or win off of their DVC? We just don't want to take a loss when selling.
Thanks for the help!

 

[backyardponder]

There was a discussion about this a couple weeks ago at:

http://www.disboards.com/showthread.php?t=1874080

 

[bookswin]

The only question my DH has on buying in to DVC is if 15 yrs from now, we decide to sell our contract. Would we take a loss, break even, or what? How does DVC do w/members selling? From my understanding, Disney has a say on how the pricing goes w/resales. So, do they keep it from anyone taking a big loss or win off of their DVC? We just don't want to take a loss when selling.
Thanks for the help!

Impossible to say for sure.

Disney exercises Right of First Refusal to get inventory for resale and to some degree to put support under the price so that they can continue to sell new contracts. If you look at the major resale sites, you can get a pretty good idea what sort of price is needed before Disney will pass. Or just ask a reseller.

DVC has a real advantage over most timeshares, though, because even if they discontinue ROFR completely and the resale price of a contract sags some, a DVC room at WDW will surely be worth a lot more than a Value room, so that provides a floor of a sort. It's hard to imagine a BCV contract going for $20 a point until about 2040.

You will hear that you break even after 5-6 vacations or something. IMO that is a best-case scenario, and the true break-even is more like 8-10 years, depending on about 40 assumptions.

So even if you "lose" 50% after 15 years, you are way ahead of the game.

Remember, OKW is 16 years old and it sells for considerably more now than it did when first marketed.

But this isn't a T-Bill or bond where you can figure out what you will get someday.

 

[nemofans]

Thanks!
We have gone back & forth on buying in. We go every 2 yrs & stay deluxe. We don't mind the buy in, but then factor in the maintenance dues each year & we're wondering if it's worth it b/c of how often we go.

 

[Safari Queen]

I'm guessing the cost of deluxe accommodations will go up more than the DVC property will depreciate. We just sold one of our contracts four years after we purchased and lost $1 per point plus $1300 in fees to the agency that helped us sell. Not bad considering we got a cruise and six vacations at SSR, BCV, and OKW from the points in that time.

 

[Deb & Bill]

The only question my DH has on buying in to DVC is if 15 yrs from now, we decide to sell our contract. Would we take a loss, break even, or what? ...

Yes.

 

[Lynne M]

I don't look at DVC as an asset that may appreciate or depreciate in value. I look at it as a vacation pre-payment plan.

At this point, I've already 'gotten back' the money I put into it......meaning, the money I've saved by using DVC points is more than the original cost + maintenance fees paid to date.

If I had to sell tomorrow, I'd come out way ahead no matter what I got for it.

 

[Laxmom]

Don't buy if you don't want to take a loss. The reality is that all timeshares depreciate in value and there is the possibility that DVC will too, at some point. It isn't an investment, like a house, that appreciates, typically. So, if you don't want to take a loss and aren't willing to take the chance, don't do it. We understood this going in. As a pp stated, we are prepaying our vacations. Not meaning to be harsh; just realistic.

 

[dvcdisney]

I don't look at DVC as an asset that may appreciate or depreciate in value. I look at it as a vacation pre-payment plan.

At this point, I've already 'gotten back' the money I put into it......meaning, the money I've saved by using DVC points is more than the original cost + maintenance fees paid to date.

If I had to sell tomorrow, I'd come out way ahead no matter what I got for it.

That's how we look at it. In a few years, I think we would have broken even and we would still have decades of vacations left (and that's not even taking into account the increase in accomodation prices throughout the years). I'm just hoping the maintenance fees remain to be manageable.

 

[bookswin]

Don't buy if you don't want to take a loss. The reality is that all timeshares depreciate in value and there is the possibility that DVC will too, at some point. It isn't an investment, like a house, that appreciates, typically. So, if you don't want to take a loss and aren't willing to take the chance, don't do it. We understood this going in. As a pp stated, we are prepaying our vacations. Not meaning to be harsh; just realistic.

On the other hand, the Dow Jones Average has gone from 14000+ to less than 11000 in 9 months, and half the country seem to be underwater on its house equity.

Our DVC "investment," if you want to look at it that way, has held up quite nicely.

 

[Laxmom]

You just proved my point. You can't buy anything anymore and "expect" to not lose money or "expect" to make a profit. No one has the crystal ball than can predict that. I just don't want to see the OP go in and expect to break even or not lose money. We could sell the points we bought this spring and already see a loss after we pay the commission and any mf's or closing costs negotiated into the deal. If you are buying DVC and expecting it to hold it's value, you may be extremely disapointed. If you are buying DVC for terrific vacations at quality resorts, go for it!

I'm as big a DVC fan as the next person, but lets be realistic, no one knows what is coming down the road. The OP stated that they "didn't want to take a loss when they sell." There are no guarantess that that won't happen. I think they need to know that.

 

[jasonp5]

I just sold my BCV points. About 6 years after I bought them for $70/point, I sold them for $81/point after the commission ($90/point-10%)...Had I held out, I probably could have gotten an extra couple dollars a point, but I was happy with that.

 

[nemofans]

Thanks for everyone's input. We realize there's a risk & we don't expect to make money off of it. We just don't want a big loss. We would buy in for the vacation options, not an investment. BUT we need to make sure it is worth it for us. If we just had the buy in, that's fine b/c we would be saving money after so many trips. But counting in the maintenance fees as well is what makes us think twice. We only go every other year & spend about the same, maybe a little more, on a deluxe as the maintenance adds up to every 2 yrs. So, figuring main. fees are about $800/yr, so every 2 yrs that's $1600. We have been able to get deluxe rooms spending about that much. I think if we went more often &/or had a bigger family & needed bigger rooms that it would be beneficial then.
We will continue to go to WDW, but I don't think we'll become DVC owners.

 

[Laxmom]

Ok, now that makes sense! But.....if you only go every other year, why not buy 1/2 the points you need via resale and bank/borrow the points for your trip? See if that makes more economical sense. We bought 100 pts. for under $10,000 and will go every other year. That gives us 200 pts. eoy with maintenance fees in the $500 range. We didn't want or need the full 160 pts. If you buy resale, you don't have to buy the required 160 like you do thru Disney directly. Just a thought......

To us, DVC is an investment in our family. Not a monetary investment that we expect will increase or even hold its value. It would be great if it does! But do we expect it, no. Is it worth it? yes.

 

[Dean]

For every 2 years in a Dlx option, DVC will make perfect sense unless you're mostly doing long weekends. There are cheaper options but you've already made the decision that off site isn't OK even if it's as good or better a resort otherwise. For long weekends it doesn't make sense. The other pieces of the puzzle center around the likelihood you'll cont to go and the financial risk involved, neither of which seem to a deterrent from the limited info you've given us. As for selling in 15 years, there are many factors. For the 2042 resorts you can likely expect to take a loss in 15 years even if you buy resale and they are later extended. For the later expiration resorts (or buying a 2042 resort that has already been extended), it's likely you can break even on a $$$ basis and come out ahead if you consider the savings involved otherwise. It's extremely unlikely you'll make any money above inflation. The other caveat is not to finance to buy.

 

[srenga]

You could also rent your points on the years you don't go, the rent would cover 2 years+ of maintenance fees.