Riviera Resale-Wow?

[Sandisw]

$145 only surprises me because iirc the last round of direct incentives around $150 for 200 points, not far off.

It wouldn't surprise me to see RR retain a relatively high resale price since it has the longest contract left and is a beautiful resort with good access to HS & EP. I've seen posts that thought the restrictions might cause it to level off in the bottom half of the resale pack but that doesn't look likely.

You had to buy 300 points to get $155. So, someone who gets 100 points at $145 is probably savings about $45/pt or $4500.

For someone who wants RIV it’s a pretty good bit of money. But, I do agree that it’s pointing to doing better than expected in initial prices.

 

[CP3uhoh]

There is some basic math here. They charge X for cash stays. Someone who pays <$140 point is getting a room for half price or less. A lot of fuss over dues. A 75 point contract has about $100 difference on dues. In 30 years, those studios cash wise, will be $1,500 night These will also rent well because of the savings and a small contract is a perfect addition for people who bought the minimum for the blue card. Do the math on renting at $16/pt, you can clear 4%. Going for the same as beach club with 30 years extra doesn’t seem insane plus you have the kicker of what happens if they lift the restrictions. I’d pay $120 for lower contract without hesitation. Gondola is same commute to epcot as walk from Beach Club and BW (assuming it’s running) Probably huge during Food and Wine. In 10 years you’re going to be looking at 10 years left at BW and BC or 40 at Riviera...

 

[Hjs33]

It’s supply and demand. Right now there are very few contracts coming up for sale. There’s also some decent demand from people that love the resort and want to own there to just stay there. At a $30-$50 discount on the direct points the buyers don’t care about the restrictions.

In a year or two a lot more contracts will hit the market and I think it will overwhelm the limited demand. It’ll eventually settle lower and I personally think it’ll settle somewhere around where Saratoga Springs resales are selling.

 

[CP3uhoh]

It’s supply and demand. Right now there are very few contracts coming up for sale. There’s also some decent demand from people that love the resort and want to own there to just stay there. At a $30-$50 discount on the direct points the buyers don’t care about the restrictions.

In a year or two a lot more contracts will hit the market and I think it will overwhelm the limited demand. It’ll eventually settle lower and I personally think it’ll settle somewhere around where Saratoga Springs resales are selling.

Let’s say you pay $105 pt which is generously what Saratoga goes for. Say 200 points

Annual dues $1,600
Rent at $16 point (and you could get more) $3200

Cost of points $21,000.
7.5% Tax Free yield with the the ten year at .7%....I will buy all the points in a couple of years at $105. Come find me.

All that being said, most people aren’t going to do that math or be willing to outlay $21k without financing . I have to say as a family of four the Poly and Riviera “Double shower” studio is really appealing. Would I rent the points to stay at Riviera for a good location, not best, at a brand new resort in a room I can’t get anywhere else. Yes. Huge savings and probably still less than a moderate. Win, Win.

I completely understand where you’re coming from but at a certain point it’s just math. Someone that wants an add on isn’t going to balk at $130 when they paid 175-$195 and Disney would buy back. They can’t have a rack rate of $750 night with the DVC points selling at $105. Or they’d just lift the restrictions.

 

[Cabius]

7.5% Tax Free yield

Why would this income be tax-free? I get that it isn't reported to the IRS as part of the transaction, but it's not legally tax-free income, just income that once might get away with illegally hiding.

 

[CP3uhoh]

Why would this income be tax-free? I get that it isn't reported to the IRS as part of the transaction, but it's not legally tax-free income, just income that once might get away with illegally hiding.

Real estate can be rented <15 days annually tax free.

 

[CP3uhoh]

Real estate can be rented <15 days annually tax free.
[/QUOTE

Real estate can be rented <15 days annually tax free.

And when you pay tax on rental income, you typically deduct your costs, in this case, maintenance fees. A little more complicated math at that point because each person/entity will vary but still a good deal.

 

[Lorana]

Real estate can be rented <15 days annually tax free.

And when you pay tax on rental income, you typically deduct your costs, in this case, maintenance fees. A little more complicated math at that point because each person/entity will vary but still a good deal.

In order to take the first 15 days of rental free, however, you need to personally use 15 days in that year for personal use and own a minimum of 3 weeks at the timeshare/vacation property.

This article dives a little more into the details:
https://www.redweek.com/resources/articles/tax-aspects-renting-timeshare

 

[RoseGold]

In 30 years, those studios cash wise, will be $1,500 night

If you believe that, I have a bridge to sell you.

 

[CP3uhoh]

If you believe that, I have a bridge to sell you.

Take the current price and compound an average increase of 2% annually.

 

[CP3uhoh]

In order to take the first 15 days of rental free, however, you need to personally use 15 days in that year for personal use and own a minimum of 3 weeks at the timeshare/vacation property.

This article dives a little more into the details:
https://www.redweek.com/resources/articles/tax-aspects-renting-timeshare

I was thinking most people would own multiple contracts if buying resale or buying a bunch to increase income though that would take a lot of $$. Rental income that doesn’t require insurance or eviction ever isn’t terrible either.

 

[we"reofftoneverland]

I was thinking most people would own multiple contracts if buying resale or buying a bunch to increase income though that would take a lot of $$. Rental income that doesn’t require insurance or eviction ever isn’t terrible either.

You do realize if you rent that you are liable for your renters? If they burn down the building, you are liable.

 

[CP3uhoh]

I was thinking most people would own multiple contracts if buying resale or buying a bunch to increase income though that would take a lot of $$. Rental income that doesn’t require insurance or eviction ever isn’t terrible either.

Just to be clear, I’m not saying these contracts are a steal on the resale market, my point was at $105, the math is more than in your favor for a good outcome and I honestly don’t think Disney would let it go that low. Many people have emotional attachments to this stuff. It’s a piece of paper.

 

[CP3uhoh]

You do realize if you rent that you are liable for your renters? If they burn down the building, you are liable.

You know what, I hadn’t considered that someone that had thousands of dollars to pay for a vacation would purposefully burn the entire resort down. They might steal a robe would be my guess but they leave their own payment for incidentals to may not matter.

 

[CP3uhoh]

Take the current price and compound an average increase of 2% annually.

During a worldwide pandemic, the contemporary, to book this week is $705/night before any discounts for tower/lake view. It was $28/night when it opened. Theme Park view approached $40/night.

 

[havoc315]

1 -- Many of the buyers might simply be adding points to a Riviera direct purchase, or may already own at other resorts and just want some points to use at Riviera.
2 -- It's still the newest current DVC and longest contract. That can appeal to buyers, even with restrictions.
3 -- Many buyers only plan on staying at Disney World, and aren't bothered at being locked into 1 resort. Especially as it's the resort with the longest contract. And they may believe it's the nicest resort.
4 -- There is a general consensus that Riviera has among the nicest rooms, second perhaps to only GFV. And $145 per point is still much cheaper than GFV resale. (Yes, OKW are much bigger but not nicer).
5 -- Riviera is the only DVC on the skyliner. And its contract is much longer than any of the other Epcot area resorts.

Basically, there are LOTS of reasons that someone might still want the Riviera resale, even with the restrictions. Not everyone puts a high priority on resort hopping.

 

[GeneralTso]

It costs about 500 points to stay at the Riviera during peak times. It's a pricey place.
I LOVE the Riviera. I'm stalking the resale market and waiting for a better dip. You better believe I'm gonna swoop in and purchase a resale contract when it hits that sweet spot. I'm patient. The restrictions don't worry me at all. We own direct at other resorts and this will only enhance that. I truly want that 11 month booking advantage there.

 

[RoseGold]

Take the current price and compound an average increase of 2% annually.

First, you've got to find someone who has actually paid $741 for a RIV studio. It was on sale before it even opened.

 

[RoseGold]

They might steal a robe would be my guess

There are no robes. You'd have to go Four Seasons for that. Maybe they will steal the pack n play. Or unscrew the shampoo off the wall.

 

[havoc315]

First, you've got to find someone who has actually paid $741 for a RIV studio. It was on sale before it even opened.

True. But with tax, $550-$650 per night has been common, even with discounts, depending on time of year.

And room rate inflation at Disney is a lot more than 2%.

So base it on a current average selling price of about $550, to be conservative.
3% per year increases are still on the conservative side for Disney.

So... after 10 years, that would be $739 per night. After 20 years, $993 per night. After 30 years, $1334. After 40 years, $1794 per night.

Granted, the future is impossible to predict. And "past inflation is not an indicator of future"
Over the past 50 years, Disney resorts have increased prices far more than 3% per year. I expect the hyper-inflation to continue because I expect demand to continue to grow faster than supply. (Disney really can't increase the capacity of their current parks by that much... Competitors are limited in their ability to offer competitive hotels as Disney controls the real estate immediately surrounding the parks).
Now..... things could go the other way, with decreased demand. Contributing factors: more global pandemics truly hurting long term international travel, theme parks could simply become less popular. Global warming could make Florida a less desirable location.
While we may see a temporary 1-2 year decline in demand, I anticipate continued demand growth.