ROFR Thread April to June 2024 *PLEASE SEE FIRST POST FOR INSTRUCTIONS & FORMATTING TOOL*

[FreemanFam]

FreemanFam---$135-$11008-75-BWV-Oct-75/23, 75/24, 75/25- sent 4/18, passed 5/3

 

[mike1986]

Wow! I’d say they really are making an effort to get the resale price up to potentially get people to go direct when sales start in the next 3 to 4 months.

I agree. I have another in ROFR now at a slightly higher amount. Will see how that one goes

 

[JackosinDIS]

JackosinDIS---$120-$12590-100-CCV@WL-Jun-0/23, 75/24, 100/25-seller pays MF ‘24- sent 4/7, passed 5/3

Well that felt like a long wait!

 

[clarker01]

clarker01---$98-$5635-50-SSR-Mar-0/23, 30/24, 50/25, 50/26-seller pays MF ‘24- sent 4/16, passed 5/2

 

[JGINPL]

JGINPL--(Seller)-----$125-$3626-25-BRV@WL-Feb-0/23, 0/24, 25/25, 25/26- sent 4/19, passed 5/3

 

[Chili327]

In Sep 2021 - if you bought a 5 year government bond, you'd earn less than 1% interest. Time value of money and discount rates were very different. DVC financing was still expensive, but if you had cash, or cheaper financing, that's really your discount rate.

Between then and now, you probably had the points available to take 5 vacations - assuming you can borrow points and essentially strip your contract. Each vacation is probably worth at least $18/point (thinking about value to rent out), and you're paying roughly $8/point in dues, netting $10 of value from the contract. With interest rates near zero until last year, time-value of money doesn't really have an impact on near term cashflows.

You bought your contract at $130, then have 5 years of vacation were the benefit minus dues is $10/year, or $50. If you were to sell your contract today stripped, you can probably get at least $80/point. I'd say you did okay in this case. You didn't gain as much as if you took market risk and invested in the S&P500 or NVIDIA.

At $80 contract, you still have a present value of all the future vacations (minus expected dues). The problem with higher rates is that the present value shrinks. Instead of Y1 = $10, Y2 = $10, Y3= $10, you might get $9, $8, $7 of value in each year. In the current resale market, i would use a 12%-15% annual discount rate on current contracts and you roughly get the current pricing.

Off topic, but all your numbers reminded me, I always feel like I can buy a certain amount of points and rent a portion of them to cover the dues and still use the rest for a vacation… but my head always starts hurting before I figure out what that magic number is. lol

 

[Jayunit09]

Good timing!


Agreed, I'm one of the people who bought in that range ~2 years ago for my first SSR contract (paid 126... a little less on an adjusted basis since they paid closing costs). Seeing prices subsequently drop nearly 30% has been hard, had to jump on this one to lower my average cost basis

I've been feeling the same way about the direct CCV contract we bought in 2022 and the 50 point resale add on in 2023. The incentives for VGF last summer and now RIV/OKW......

Still no regrets because at the time it was what we wanted and we love Wilderness Lodge. But man these resale prices!

 

[aammtt20]

Off topic, but all your numbers reminded me, I always feel like I can buy a certain amount of points and rent a portion of them to cover the dues and still use the rest for a vacation… but my head always starts hurting before I figure out what that magic number is. lol

The ratio would be different for each resort (based on the dues and how much rentals command) but I can tell you how I’m doing it with my animal kingdom lodge villas points. From rentals, one can get $18 / point through the major rental brokers. The dues are a little over $9 /point, which is a ratio of about 1 to 2 for dues expenses vs rental income.

How it works in practice - let’s say you needed 100 points at AKV resort for your average vacation. Then to cover your costs you’d need twice as many points, 200. From there you’d rent 100 points and that would cover your dues, and then use the other 100 points to travel dues free. Alternatively, if you only planned to travel to that resort every other year, you could just get 100 points, rent them one year to cover both years of dues and then travel the other year dues free.

Now this advice comes with the caveat that rentals are never a sure thing and the rental market demand could change at any time. It’s not something DVC owners should rely to be able to afford their dues, and obviously Covid showed that situations can changed rapidly. However, in my experiences I have usually been able to get my points rented through brokers in at least a week, and sometimes as fast as 24 hours. So right now, the rental demand for points definitely exists to make a dues free strategy doable. It’s a nice little hack for cheap people like myself, who travel every other year and then rent the other points out.

 

[aammtt20]

And one other little add, obviously the dues will increase each year, and the rental amounts will also increase over time, but they might not increase at the same rates, so that also adds another calculus to the equations

 

[Chili327]

The ratio would be different for each resort (based on the dues and how much rentals command) but I can tell you how I’m doing it with my animal kingdom lodge villas points. From rentals, one can get $18 / point through the major rental brokers. The dues are a little over $9 /point, which is a ratio of about 1 to 2 for dues expenses vs rental income.

How it works in practice - let’s say you needed 100 points at AKV resort for your average vacation. Then to cover your costs you’d need twice as many points, 200. From there you’d rent 100 points and that would cover your dues, and then use the other 100 points to travel dues free. Alternatively, if you only planned to travel to that resort every other year, you could just get 100 points, rent them one year to cover both years of dues and then travel the other year dues free.

Now this advice comes with the caveat that rentals are never a sure thing and the rental market demand could change at any time. It’s not something DVC owners should rely to be able to afford their dues, and obviously Covid showed that situations can changed rapidly. However, in my experiences I have usually been able to get my points rented through brokers in at least a week, and sometimes as fast as 24 hours. So right now, the rental demand for points definitely exists to make a dues free strategy doable. It’s a nice little hack for cheap people like myself, who travel every other year and then rent the other points out.

Jeez, you made that way too simple. lol
Now I really want to double up on BWV, & AKV points.!!

 

[Chili327]

And one other little add, obviously the dues will increase each year, and the rental amounts will also increase over time, but they might not increase at the same rates, so that also adds another calculus to the equations

Realistically that just means I could end up paying a little more towards dues (less points to rent out), or on the plus side, able to rent more than needed to pay for my trips.

 

[aammtt20]

Jeez, you made that way too simple. lol
Now I really want to double up on BWV, & AKV points.!!

Haha true, but think about how many years of free dues it would take to pay back all those buy in costs to double your points to make it worth it

 

[Chili327]

Haha true, but think about how many years of free dues it would take to pay back all those buy in costs to double your points to make it worth it

So you’re saying if I triple my points I essentially go for free!!!??

 

[Duckbug.Ducktales]

Haha true, but think about how many years of free dues it would take to pay back all those buy in costs to double your points to make it worth it

Yeah, and meanwhile the money could be earning interest

 

[aammtt20]

Yeah, and meanwhile the money could be earning interest

Exactly. There's a lot to consider with the time-value of money when it comes to all the different dimensions of purchasing DVC. But many times the convenience of owning DVC and taking trips wins out for the owners. And honestly, there is some inherent value in that convenience, even if logically many of us know that money could be more productive elsewhere while still being put towards Disney vacations.

 

[disland7]

Mike1986---$152-$29129-185-PVB-Mar-0/23, 185/24, 185/25, 185/26- sent 4/23, taken 5/3

Sorry. Wow they didn’t even take long to take this one

 

[SLACG]

The ratio would be different for each resort (based on the dues and how much rentals command) but I can tell you how I’m doing it with my animal kingdom lodge villas points. From rentals, one can get $18 / point through the major rental brokers. The dues are a little over $9 /point, which is a ratio of about 1 to 2 for dues expenses vs rental income.

How it works in practice - let’s say you needed 100 points at AKV resort for your average vacation. Then to cover your costs you’d need twice as many points, 200. From there you’d rent 100 points and that would cover your dues, and then use the other 100 points to travel dues free. Alternatively, if you only planned to travel to that resort every other year, you could just get 100 points, rent them one year to cover both years of dues and then travel the other year dues free.

Now this advice comes with the caveat that rentals are never a sure thing and the rental market demand could change at any time. It’s not something DVC owners should rely to be able to afford their dues, and obviously Covid showed that situations can changed rapidly. However, in my experiences I have usually been able to get my points rented through brokers in at least a week, and sometimes as fast as 24 hours. So right now, the rental demand for points definitely exists to make a dues free strategy doable. It’s a nice little hack for cheap people like myself, who travel every other year and then rent the other points out.

I like your thinking! I'd just be afraid I would end up using up all the points instead of renting half of them! LOL

 

[AstroBlasters]

I like your thinking! I'd just be afraid I would end up using up all the points instead of renting half of them! LOL

“Know Thy Self”

 

[aammtt20]

I like your thinking! I'd just be afraid I would end up using up all the points instead of renting half of them! LOL

The temptation is too real, haha! Fortunately my husband is a more moderating force and makes sure we use just what we need to and not get too crazy with our points

 

[billsfan12345]

billsfan12345---$90-$30162-300-SSR-Apr-0/23, 600/24, 300/25, 300/26- sent 4/15, passed 5/3