Resale 5 year look back

[Ruttangel]

Just put this cashflow together using dvcresalemarket.com sales data from Spring 2018 and a sales estimate for later this year. Assumes contract had 5 years of dues to pay (3 years for RIV).
All this shows is that every resort is a saving on renting at say $18pp (unless someone argues that you could have put $20k in a high interest account and pay for rentals each year) but only 1 resort “in the black” unsurprisingly VGC.
Resorts with lower growth in resale price obviously showing higher costs.
Does this help going forward? Well if you buy now you’re going to have to hope around 15-20% increase in 5 years to see these figures repeated.

Anyone find this useful? I’m also happy to take feedback on anything you disagree with.
We did get some dues credits for closures in 2020, just ignored that on basis it was fairly immaterial

 

[RoseGold]

All this shows is that every resort is a saving on renting at say $18pp (unless someone argues that you could have put $20k in a high interest account and pay for rentals each year) but only 1 resort “in the black” unsurprisingly VGC.

No, it shows that if you were buying at 2018 prices. It doesn't show that at all for points bought right now. It actually might show the opposite, because prices are so high now.

VGF doing so poorly is an artifact of the dip from the direct sales. If you used the mid-2021 pricing of $190s, it would be on par with the others. I would expect that pricing in a couple years again.

And Vero's dues are just killer.

 

[Ruttangel]

No, it shows that if you were buying at 2018 prices. It doesn't show that at all for points bought right now. It actually might show the opposite, because prices are so high now.

VGF doing so poorly is an artifact of the dip from the direct sales. If you used the mid-2021 pricing of $190s, it would be on par with the others. I would expect that pricing in a couple years again.

And Vero's dues are just killer.

Of course, that is why I put this bit in
“Does this help going forward? Well if you buy now you’re going to have to hope around 15-20% increase in 5 years to see these figures repeated.”

 

[kilik64]

Interesting to look at but its like looking at stocks from 2018 to now, prior results are not indicative of future performance.

 

[Jlo85]

Probably known, but this doesn’t contemplate the time value of money. For example, could have invested that $18K you saved on Vero Beach vs Grand Californian upfront, and I bet the savings would be a lot greater.

 

[havoc315]

View attachment 705420

Just put this cashflow together using dvcresalemarket.com sales data from Spring 2018 and a sales estimate for later this year. Assumes contract had 5 years of dues to pay (3 years for RIV).
All this shows is that every resort is a saving on renting at say $18pp (unless someone argues that you could have put $20k in a high interest account and pay for rentals each year) but only 1 resort “in the black” unsurprisingly VGC.
Resorts with lower growth in resale price obviously showing higher costs.
Does this help going forward? Well if you buy now you’re going to have to hope around 15-20% increase in 5 years to see these figures repeated.

Anyone find this useful? I’m also happy to take feedback on anything you disagree with.
We did get some dues credits for closures in 2020, just ignored that on basis it was fairly immaterial

You forgot closing costs on initial purchase, which is sizable when only holding a property for 5 years.
That tacks another $1-$2 on the cost per point, per year.
Yes, still a savings versus renting.
You didn't include time value of money, but that's more a long term issue. It's not a huge factor when only talking about 5 years.

As to how helpful this is moving forward.... It really comes down to how you project future re-sale rates. Compared to 2018, most resorts are 10-20% higher now. If resale prices kept increasing 10-20% every 5 years, then this would be a good projection. But prices have been stagnant for the last year, a recession is likely next year. As we get closer to 2042, at some point the 2042 resorts will start to lose re-sale value. So this is a good example of past performance not being an indicator of the future.

 

[Ruttangel]

Interesting to look at but its like looking at stocks from 2018 to now, prior results are not indicative of future performance.

It would be dangerous to assume 20% rise across the board in the next 5 years, I certainly would expect some winners and losers.

 

[Ruttangel]

You forgot closing costs on initial purchase, which is sizable when only holding a property for 5 years.

Thanks, as you say about $1pp extra.

You didn't include time value of money, but that's more a long term issue. It's not a huge factor when only talking about 5 years.

Yeah it’s pure cash in and out rather than time value of money.

As to how helpful this is moving forward.... It really comes down to how you project future re-sale rates.

Who knows maybe BLT will get a new building or once VGF sells out it starts getting ROFR high again, too many variables.
I agree that 2042 resorts will probably peak in 2027

 

[havoc315]

Thanks, as you say about $1pp extra.

Yeah it’s pure cash in and out rather than time value of money.

Who knows maybe BLT will get a new building or once VGF sells out it starts getting ROFR high again, too many variables.
I agree that 2042 resorts will probably peak in 2027

I'm not going to try to predict a peak for the 2042 resorts, way too many factors.

As we get closer to 2042, those rooms become more valuable for Disney than for a DVC owner. (When they sell a 50 year contract, they are hedging against the uncertainty of the future, taking a big cash advance, investing that cash... and projecting it's more profitable than booking the room for cash for 50 years. But when it's only a couple of years left... that uncertainty is greatly reduced, and they can make better money booking the room for cash than selling it at DVC).. I wouldn't be surprised to see Disney aggressively offer buybacks on 2042 resorts as we get into the mid 2030's.

But really, we do NOT know what Disney will do about 2042 resorts. Too many factors to try to project. It's safe to say that by the mid 2030's, 2042 resorts will not be on the same re-sale trajectory as the past. Maybe they have already peaked.. maybe 2027 as you project, maybe it won't peak until 2032... I'm not going to try to engage in that level of certainty.

 

[BeachClub2014]

I think it is interesting information and appreciate you sharing it with us.

 

[DVCanadian]

So this chart shows what would happen if you had bought 150 points at the various resorts in 2018 and sold now?

I’m not sure what I should take away from this other than it is good to sell at a higher price than I purchased at?

Is this to help people develop a plan to buy and hold for 5 years?

 

[SleeplessInTO]

Very interesting analysis. I enjoyed looking at this and patting myself on the back for buying at 2019 prices.

May I suggest that the Effective cost pp per year column be the second column from the left instead of at the end? In fact, it may even be a better column to sort by than alphabetical by resort acronym, so a strong contender for column 1, with resort names in column 2.

 

[sethschroeder]

For me the data starting in 2007 would be useful as that is what I am projecting in the short term future.

 

[Cfabar1]

Isn’t it a foregone conclusion that Disney will increase the PP cost each year? I guess the subsidies make the math more nuanced than that.

I’ll be curious how those numbers intersect when you have a recession hit.