Resale value question

[WendyO]

I hope this is not a taboo topic - I am not wanting to sell my DVC - but we are meeting with our financial planner and he wanted to know the value our timeshares would have on the market (when assessing our net asset value).

Would you put what you paid for it (I'm thinking not, except for the fact that it is *sort of* a depreciating asset as DVC is not perpetual), or what it's worth on the market today if we were to sell it?

And if so, how do we find out what it's market value is? I've done some online searching but couldn't find anything concrete on the value of our property.

Wasn't sure if any of you went through this too and had some advice. I'm sure we don't have to be 100% accurate, but just in the ball park.

Help! Thanks!

wendy

 

[CarolMN]

I wouldn't spend a lot of time on this (I work with Financial Plans and all you are really doing is getting a ball park figure for your net worth (assets minus liabilities) at a particular point in time) IMHO, it really doesn't mean all that much.

Just tell the FP that you have a RTU (Right to Use) timeshare that ends in (insert year here). As for current market value, just use the price per point that DVC is currently sellling your resort for multiplied by the number of points you own. Subtract about 10% of that total (for selling expenses) and then subtract any loan you may have against it. IMHO, that's close enough for figuring a net worth.

If you haven't already, tell the FP that the price is currently supported by Disney's ROFR process and that the RTU lease obviously will decrease in value at some point - no one here is sure just when that will be. My guess is that will be when Disney quits exercising ROFR or when the term has 20 or less years left to run - whichever comes first.

Best wishes -

 

[WendyO]

Thanks much!!!

 

[JimMIA]

I agree with Carol that I wouldn't spend much of my life pinpointing the value of your DVC ownership.

Having said that...usually, accountants use "lesser of cost or market value" for these valuations. They might depreciate the cost figure by whatever portion of the life of your DVC contract has passed since you purchased, and that would give them a very conservative valuation...which is what accountants usually like.

If I were going to use market value (which financial planners are more likely to do), I would look at the resale prices on our sponsor's offering list to get an average resale price (because if you sold, you'd be selling at resale prices), and then subtract 10% or so for commissions and other costs of selling. That would probably give you a higher value, and therefore higher net worth, than using cost.

If I were arguing with an accountant over value, I would argue that a DVC membership is a current asset, rather than long-term as they would classify it. If you needed to get out, there's no question you could sell your DVC in a matter of weeks, and to me that's the definition of a current asset. DVC is a liquid asset, because you can convert it to cash quickly.

 

[Dean]

Unless you plan to sell it, I wouldn't count it as an asset, just a liability for dues and loans payments if you have one because in the not to distant future it will be an asset decreasing in value. But if you feel you must value it in todays dollars, I'd use $50-55 pp for VB & HH and $60-65 for the rest. Yes I know you MIGHT be able to get a few more dollars right now if you sold after all commissions and depending on home reosrt, but not that much even now.