Second Thoughts…….in cool off period

[intamin]

Thank you for the input- we are fortunate and travel frequently- i am in, my partner on the other hand is not sold- we prefer the Beachclub area but the swan or dolphin is an option in that area as well at a fraction of the cost which is where the hesitancy comes from- I have been researching and listened to my first dvc pitch in 2017 just didn’t care for the resorts being offered at that time and the incentives weren’t great. I like the idea of the VGF for being on the monorail But I am just trying to work the math where it works - 40 years of dues is a lot but then I look at what we spend on vacation especially this year and we still have a November Disney trip booked…..financially it will not break me but I look at well if I took that money and put in some investments instead it would more than cover the costs of future vacations….. but then I remember that today is called the present for a reason….

That's the hard part, if you're spending that money on vacations anyways then you can't just compare directly to investing all of the money the whole time. A lot of the excel spread sheets compare buying in to investing all of it and opportunity cost.. which is simply unrealistic. Me not buying DVC is not going to stop me from going on vacations. We're not robots, we don't go 40 years like in those calculations without going on a single vacation and just leave all of our money in a mutual index fund the whole time. On the other hand, if you're not planning to go to WDW for the foreseeable future it still doesn't make sense.

If the savings you get from buying DVC compared to renting/paying cash are more than you would've earned from the interest from investing the money you used to buy in with then DVC makes sense. This assumes you want to stay in the deluxe DVC resorts and stay on property otherwise it really doesn't make sense to.

 

[RoseGold]

40 years of dues is a lot but then I look at what we spend on vacation especially this year and we still have a November Disney trip booked…..

I would get in contact with your guide and see if you can get a Magical Beginnings reservation for the holidays. This actually might flip the math if you are paying some insane rate for a holiday room.

Be warned there are many stories where they "can't" make the Magical Beginnings work after people signed direct, so I would want a real commitment with dates and rooms and points.

 

[aceshigh73]

Thank you for the input- we are fortunate and travel frequently- i am in, my partner on the other hand is not sold- we prefer the Beachclub area but the swan or dolphin is an option in that area as well at a fraction of the cost which is where the hesitancy comes from- I have been researching and listened to my first dvc pitch in 2017 just didn’t care for the resorts being offered at that time and the incentives weren’t great. I like the idea of the VGF for being on the monorail But I am just trying to work the math where it works - 40 years of dues is a lot but then I look at what we spend on vacation especially this year and we still have a November Disney trip booked…..financially it will not break me but I look at well if I took that money and put in some investments instead it would more than cover the costs of future vacations….. but then I remember that today is called the present for a reason….

We are also "not sold" on VGF, and just purchased 2 smaller BWV resales. Being in our 50's it makes sense to buy a 2042. We are also very close to buying VGF even though it isnt our favorite.

Basically what I see your issue being is.. DVC math works, but does it WORK FOR YOU...
Every time i think we might be making a mistake I remember that its fairly easy to rent your points out to cover your dues + some extra, and for the most part, there's a decent resale market that will buy your contract if things change (and they will).

In regards to investments, yes, this much is true... We can all be Scrooge McDuck, sit at home, count our money, look at our account statements, and watch Judge Judy reruns with an antenna on our roof. After a while, we have to view money as a tool to help us live our best life and not as some game where whoever dies with the most wins.

With that being said, Ive told more than a few people on this forum to make sure you are financially ready before buying DVC. (Lots of Cash, Retirement accounts on track, future expenses planned (college, etc), all CC debt paid off, etc. Other debts are manageable (cars, mortgage). Then take the plunge....

Good Luck.

 

[grahf1234]

I would get in contact with your guide and see if you can get a Magical Beginnings reservation for the holidays. This actually might flip the math if you are paying some insane rate for a holiday room.

Be warned there are many stories where they "can't" make the Magical Beginnings work after people signed direct, so I would want a real commitment with dates and rooms and points.

The guide I'm working with is pretty pro-active and helped me book the welcome home reservation yesterday even though I haven't signed yet. Was kind of surprised by the options available, for a december 15-24 stay, was given more options than I thought was possible including a boardwalk standard studio and beach studio. I don't understand how they can pull off stuff like that, but seems like there's still possibility to get many things around christmas from that welcome home visit if you're interested

 

[intamin]

The guide I'm working with is pretty pro-active and helped me book the welcome home reservation yesterday even though I haven't signed yet. Was kind of surprised by the options available, for a december 15-24 stay, was given more options than I thought was possible including a boardwalk standard studio and beach studio. I don't understand how they can pull off stuff like that, but seems like there's still possibility to get many things around christmas from that welcome home visit if you're interested

They have a different set of inventory to pull from than just the DVC inventory that we see on the website.

 

[DanCali]

Thank you for the input- we are fortunate and travel frequently- i am in, my partner on the other hand is not sold- we prefer the Beachclub area but the swan or dolphin is an option in that area as well at a fraction of the cost which is where the hesitancy comes from- I have been researching and listened to my first dvc pitch in 2017 just didn’t care for the resorts being offered at that time and the incentives weren’t great. I like the idea of the VGF for being on the monorail But I am just trying to work the math where it works - 40 years of dues is a lot but then I look at what we spend on vacation especially this year and we still have a November Disney trip booked…..financially it will not break me but I look at well if I took that money and put in some investments instead it would more than cover the costs of future vacations….. but then I remember that today is called the present for a reason….

The math is really what you want it to be. If you compare to DVC cash rates, then owning DVC is a great deal. If you compare to cash rates or ownership at a Marriott or Sheraton timeshare, then DVC looks a lot less favorable but it's a different experience altogether.

Since most here recommend rescinding, I'll take the other side of the argument. Nothing is black or white...

VGF expires in 2064 and may be the last resort you can buy direct which is unrestricted. Because of that, I would expect resale prices to remain relatively high compared to Riviera or newer resorts in the pipeline. If you change your mind in a few years you can likely sell it and not lose too much (even in a few years ~$150 for VGF resale may be realistic, while RIV is in already the $120s today). If you rescind and decide to buy later, the incentives may not be as good or it will sell out.

The advice to buy Beach Club because that's where you want to go is generally a good one, but only if you are ok with paying $150+ per point (before annual dues) for something that will be worthless in 18 years. For our travel habits of short 1-2 day trips, I would consider a ~50-point contract at a 2042 resort in order to get the access, but with the full knowledge reality will catch up with resale prices in the coming years. In fact, even though we're in the process of closing on a small BRV now, in my view BRV, BWV, and BCV are all grossly overvalued on the resale market relative to their "shelf life". What you can say for certain is that a BCV contract will be worthless in 2042 (ignoring a potential option to buy at a discount at a restricted recycled BCV resort) while a VGF contract will still have substantial residual value with 22 years left, and will be only one of a handful of unrestricted resorts remaining.

 

[Genie+]

There is concern that in 2042, when BWV, BCV, BCV, HHI and VB drop out of the unrestricted list, all resale prices will drop.

Resale prices likely drop. Where will resale prices be? Resort specific? How far each drops? How much is direct?

I find this interesting lol. Of course caveat DVC should not be bought with reliance on future salvage values. We’ll likely remain happy using DVC but if/when we exit how much will ‘picking the right horse’ matter? It’s a bonus! VGC and BLT early on were awesome horses.

The OG WDW properties left to trade in 2042:

BLT -5.7m- 2060 -18yrs
CCV -3.3m- 2068 -26yrs
VGF -4.5m- 2064 -22yrs
Poly -4m- 2066 -24yrs
——- ^ Total 17.5 million points with 18-24 yrs left on contracts

AKV -7m- 2057 -15yrs
OKW -7m- 2057 -15yrs (some points will expire in 2042… 25% or ?%)
SSR -14m- 2054 -12yrs
——- ^ Total 28 million points with 12-15 yrs left on contracts

AUL -11.5m- 2062 -20yrs
VGC -1.1m- 2060 -18yrs
——- ^ Total 12.6 million points with 18-20 yrs left on contracts

Plus everything Riviera and beyond that is a new association. My bet goes to the MK resorts having considerably more resale value among WDW resale at this point. If restrictions hold true in 2042, the options will be:
direct
restricted to 1 resort resale (like RIV)
restricted to 7 OG WDW resorts + 2 AUL/VGC resale

We can only speculate. In 2042 I expect direct over $300pp. What’s the value of a dollar then? Say direct is roughly $190pp today on average with incentives, 4% yearly inflation brings that to $385pp in 2042.

Granted we don’t know how +/- popular WDW or DVC is at that point making any hypothetical hard, but for simplicity I’m going with somewhat stable. So today’s environment faced with the above expirations and utility.

What horse to pick?! I’ll take one of each. As the last round of RofR dried up Copper Creek continued getting rofr’d. Less surprising when looking at these groupings.

 

[Rex1993]

I understand the argument about the 2042 cliff but that's 18 years from now. What level are those resale prices going to drop from? Not today's prices. Will they start declining with 10 years left, 5? No one knows but the market so far seems to indicate that the resale buyers couldn't care less about the cliff as of today.

 

[Genie+]

I understand the argument about the 2042 cliff but that's 18 years from now. What level are those resale prices going to drop from? Not today's prices. Will they start declining with 10 years left, 5? No one knows but the market so far seems to indicate that the resale buyers couldn't care less about the cliff as of today.

It is tricky. Inflation continues bringing prices up while the actual value deteriorates. At 4% inflation a $150 VGF resale today would be $240 in 2035 dollars. So even with 12 years of usage removed from the value, could still see $200pp ‘35.

Another part of the value is what’s possible with the contract. In 2042, how likely is SSR to trade into something other than OKW and AKV? If availability gets harder, a premium might apply to MK resorts. I’m thinking likely.

 

[AstroBlasters]

I understand the argument about the 2042 cliff but that's 18 years from now. What level are those resale prices going to drop from? Not today's prices. Will they start declining with 10 years left, 5? No one knows but the market so far seems to indicate that the resale buyers couldn't care less about the cliff as of today.

My wild guess is that they will drop to where the combination of the upfront buy-in + projected dues are not 25% below cash rates + a margin of safety. The pool of buyers will also start to shrink as families with younger children won’t consider them viable.

 

[DanCali]

I understand the argument about the 2042 cliff but that's 18 years from now. What level are those resale prices going to drop from? Not today's prices. Will they start declining with 10 years left, 5? No one knows but the market so far seems to indicate that the resale buyers couldn't care less about the cliff as of today.

There isn't a "cliff" that you get to and then prices suddenly crash... In theory, they should be declining every year (adjusted for inflation). Clearly reality isn't like that, so we can just look at is the "all-in" cost of $~16/pt/year in todays dollars for some 2042 resorts vs. $11-$12 for the 2060+ resorts. That's a 35%-50% premium with most of it paid upfront...

 

[Bucketfoot]

I can understand the thought of don't do it if you have doubts. However, if you know you enjoy and are are going to continue taking Disney vacations, I think you will eventually regret it more that you didn't do it.

While some people will say the VGF is not the best option for "future value", I would argue that because it is the Crown Jewel of the WDW DVC resorts, it will likely hold its value better than others, making it easier to recoup some of your initial investment. And of course the location of being on the monorail loop is fantastic (and a major reason why we bought our first contract there).

All of that said, as long as you are fine with not being able to stay at the Riviera or any future resorts, I honestly think that a resale contract could be the better option for you.

 

[Sandisw]

The guide I'm working with is pretty pro-active and helped me book the welcome home reservation yesterday even though I haven't signed yet. Was kind of surprised by the options available, for a december 15-24 stay, was given more options than I thought was possible including a boardwalk standard studio and beach studio. I don't understand how they can pull off stuff like that, but seems like there's still possibility to get many things around christmas from that welcome home visit if you're interested

Because both those resorts are currently being renovated, it may have played a role in why there were able to secure you the room.

My guess is they were pulled from booking because of that, and had not yet been released back into the pool of rooms. Congratulations!!!

I understand the argument about the 2042 cliff but that's 18 years from now. What level are those resale prices going to drop from? Not today's prices. Will they start declining with 10 years left, 5? No one knows but the market so far seems to indicate that the resale buyers couldn't care less about the cliff as of today.

It is a long way off, and for now, I agree many are not really giving it a lot of thought

But, if in 5 years from now you have several more resorts restricted from resale with new ones having been announced, then we could see new buyers put more stock in whrther they care about that cliff or not.

We are already seeing BWV, BCV, and BRV going for less. Granted most are but if things rebound..I am not sure they will…I don’t think these resorts will

 

[Genie+]

My wild guess is that they will drop to where the combination of the upfront buy-in + projected dues are not 25% below cash rates + a margin of safety. The pool of buyers will also start to shrink as families with younger children won’t consider them viable.

Good point, dues play their role too.

Last year it looked like OKW nearing $10pp dues cooled resale prices.

The big sprawling resorts could see dues rise faster than average if labor costs continue getting more costly.

 

[Jlo85]

But, if in 5 years from now you have several more resorts restricted from resale with new ones having been announced, then we could see new buyers put more stock in whether they care about that cliff or not.

Just want to say that this risk kind of cuts both ways. Counting on 7 month availability as new resorts fill-up with resale-only buyers is a little risky. Which is why you should buy where you want to stay.

Also, it's always possible that in 18 years a better resort comes along that you'd wish you had bought into instead of one of the direct resorts today. Heck, who knows what they're going to replace BWV and BCV with. I'd assume it's going to be pretty nice (and expensive).

 

[DanCali]

Just want to say that this risk kind of cuts both ways. Counting on 7 month availability as new resorts fill-up with resale-only buyers is a little risky. Which is why you should buy where you want to stay.

Also, it's always possible that in 18 years a better resort comes along that you'd wish you had bought into instead of one of the direct resorts today. Heck, who knows what they're going to replace BWV and BCV with. I'd assume it's going to be pretty nice (and expensive).

They will probably replace BWV and BCV and BWV2 and BCV2, respectively. Except the resorts will be restricted and the points charts less favorable (so they could maximize revenue from sales)

 

[RamblinWreck]

For the people discussing how compelling VGF's price point is right now, I wouldn't focus too much on that. $10 per point here or there is such a miniscule portion of the total cost of a DVC contract that I just wouldn't rush a decision based on it. Sure, it feels good to save a couple thousand bucks (or maybe even several thousand bucks if you're buying a big enough contract). But it just doesn't move the needle that much on the total cost (upfront and dues).

Don't let a little FOMO trick you into a decision you didn't want to make.

 

[AstroBlasters]

Or the OP could be like me who passed on VGC in 2010 at $100ish pp because the cash rates in a recession were dirt cheap only to regret that choice and buy in at $225pp on 2023 because the cash rates had pushed me off property.

Run the ROI on what I paid in cash for DL hotels (off property and Disney) from 2011 to 2023 and then add in the current resale value ($275pp?) vs the initial buy in + dues.

What % of current DVC owners would say, “I’m glad I waited!”. There will be some, for sure. But probably a small % of the overall ownership.

 

[Bucketfoot]

Or the OP could be like me who passed on VGC in 2010 at $100ish pp because the cash rates in a recession were dirt cheap only to regret that choice and buy in at $225pp on 2023 because the cash rates had pushed me off property.

Run the ROI on what I paid in cash for DL hotels (off property and Disney) from 2011 to 2023 and then add in the current resale value ($275pp?) vs the initial buy in + dues.

What % of current DVC owners would say, “I’m glad I waited!”. There will be some, for sure. But probably a small % of the overall ownership.

We were in this same boat. It would have been harder at that time, but we have so regretted not buying VGC in the pre-sales.

 

[RamblinWreck]

Or the OP could be like me who passed on VGC in 2010 at $100ish pp because the cash rates in a recession were dirt cheap only to regret that choice and buy in at $225pp on 2023 because the cash rates had pushed me off property.

Run the ROI on what I paid in cash for DL hotels (off property and Disney) from 2011 to 2023 and then add in the current resale value ($275pp?) vs the initial buy in + dues.

What % of current DVC owners would say, “I’m glad I waited!”. There will be some, for sure. But probably a small % of the overall ownership.

VGC is very unique compared to any WDW property, though.

It's not necessarily about being glad you waited vs glad you made sure it was the right decision first. The limited supply of VGC, sure, that's a different animal.