Sell or Not to Sell

[mom23boys]

Here it is, my dh and I bought DVC Dec 2002, it was an impulse purchase and have used it for BCV in Oct 2004 for a two bedroom, we have three sons (10,5, and 2) We love disney and will return every two years but we only have 150 pts/year and can only stay at BCV on the low seasons. We currenly are trying to sell, but every time they call us to tell us someone is interested I do not want to sell.

DH thought is we have a mortgage and maintence, the extra 220 a month could come in handy. I say we will be going so why not stay in DCV. The main reason for selling is for savings but if we use it it is worth in right? Also it fits in our budget, we can afford the mortgage, but it would help with long term savings if we sell.


We have stayed in the deluxe, value and off site, which we did not like. He would like to stay at a deluxe resort and get two rooms, because it come out cheaper even if we just paid maintence for 24 months.


What should we do?????

Sharon

 

[FreeTime]

I think that you and your DH need to really sit down and discuss what you should do. Since it was an impulse purchase decide if it was something that you really, really wanted. You mention that it fits your budget, but it cuts into your savings for the future. Is it cutting into savings for education or retirement? With pay increases over the next several years will you be able to make it up? Since you are making payments do you really want the extra payment for the entire length of time that you have it financed? Do you think that you will not enjoy your vacation because you will be worrying about how much it has cost you? I think that DVC is great and it was a great investment for my family. But that doesn't mean that it is for every family. Before we finally bought we had actually previous purchased but backed out during the waiting period. We wanted to make sure that it wasn't just an impulse purchase because the tour was so great. We have been members now since 1999 and enjoed many vacations. I wouldn't have enjoyed them though if I knew that my husband thought that we shouldn't be spending the money. So please, discuss it with your hubby and decide what your savings goals are and if it achievable with DVC or without.

 

[dianeschlicht]

Try staying at OKW on your 150 points. They will stretch a lot further. I think staying on-site is important to you, so it makes sense. Maybe the issue is that you purchased when you really couldn't afford it. I would think there are ways to extend the points to fit your use. I think one of the diservices guides do is to convince people that 150 points is enough. For some it is, but for those who must travel in peak point times, it isn't. Try doing every third year once in awhile. By this, I mean, bank one year and the next year use the current and banked points plus borrow the next years points as well. This gives you three years of points to use at once. You can get a 2 bedroom at BCV during Magic season (second highest point cost) for a week for 350 points. Since you will have 450 available with three use years, you could get a nice length vacation out of that. Any left over points from that 3rd year could be rented to give you some income as well to defray costs. Then start over with banking and borrowing.

 

[Doug Wolfe]

Time for you & DH to have a heart-to-heart. Discuss what you pay out when you take your trip every other year. How much do you spend for a deluxe resort? Don't forget to add the 11%+ tax. Take into consideration that after a few years, you usually come out ahead with DVC.

Also, I agree with the OKW concept. If you have 150pts a year, bank them over so you have 300 points for your trip. Most times of the year you can stay in an OKW 2-bedroom for 270 pts. Bank the remaining 30pts. Every couple of trips you will have enough for a 2-bedroom at BCV. The rooms at OKW are huge.

 

[BWVDee]

After reading your post, the first question that came to my mind is: Will you spend approx the same amount for vacations per year as what the DVC membership costs? If yes then it is a no brainer. Yearly vacation costs buy you just that: a yearly vacation. The cost of a DVC contract buys you vacations until 2042 or 2054, depending on where you buy.
Also a VERY big factor to remember is once your contract is paid off you are only talking about maintenance fees every year. I do not know any vacation destination you can go to and get accommondations on par with DVC for only the cost of yearly dues.
I have to add though, if owning a DVC membership is putting a real financial burden on your family, then selling might be a very good idea. Vacations are the "extras" in life, regardess if they are through a DVC timeshare or just calling a travel agent and booking from A to Z. And a DVC membership needs to be kept in the proper prospective, as do all the "extras" in life.
Good luck with whatever your decision may be!!!

 

[CarolMN]

Originally posted by mom23boys
Here it is, my dh and I bought DVC Dec 2002, it was an impulse purchase and have used it for BCV in Oct 2004 for a two bedroom, we have three sons (10,5, and 2) We love disney and will return every two years but we only have 150 pts/year and can only stay at BCV on the low seasons. We currenly are trying to sell, but every time they call us to tell us someone is interested I do not want to sell.

DH thought is we have a mortgage and maintence, the extra 220 a month could come in handy. I say we will be going so why not stay in DCV. The main reason for selling is for savings but if we use it it is worth in right? Also it fits in our budget, we can afford the mortgage, but it would help with long term savings if we sell.


We have stayed in the deluxe, value and off site, which we did not like. He would like to stay at a deluxe resort and get two rooms, because it come out cheaper even if we just paid maintence for 24 months.


What should we do?????

Sharon

I don't know what you should do because I don't know your family's financial situation, your goals or your values. Here are some things to think about, though:

DVC is a prepaid vacation plan. IMHO, it's not a necessity and the funds to support it should come out of discretionary income.

Are you currrently saving enough for your retirement?

Do you own your own home?

Do you have adequate health care insurance for your family?

Do you have an emergency fund equal to at least 3 months of expenses?

Are you saving enough for your sons' education?

Do you have long term care insurance?

Assuming you have taken care of all your financial goals/priorities and still have income left over, DVC may make good sense for you.

FWIW, I am having a very hard time believing you can get two deluxe rooms for the same price as maintenance for 24 months. Dues on 150 points is approximately $600/year. That's $1200. What deluxe only charges $1200 for two rooms for 5 nights???? That's only $120/night. Even the AP rates aren't that good! Or were you thinking about something off site?

Best wishes -

 

[Dean]

None of us can truly tell you what to do. However, if you're going every 2 years and enjoy staying on site, you seem well suited for DVC. I'd sit down and look at the numbers including fees and a per year return on the purchase price. If you do, I think you'll come up with somewhere in the range of $1750 every 2 years as your direct costs for DVC though there are indirect costs that don't really apply in your situation. Using $149 for a Deluxe, $89 for a Moderate and $60 for a Value, and 12% tax, I get the following per trip prices assuming 7 days. $2350 per trip for a deluxe, $1400 for a Moderate and $950 for a value. 300 points every 2 years should get you, on average, a 2 BR every other year for the same 7 days. Some years you may have to bank AND borrow, others you may have points left over to bank for a future trip.

The only way I could see DVC not bing reasonable for your situation is if your trips were heavy on weekends or if you simply quit going to WDW. Still, you may want to consider ways to maximize your points. You could stay for 5 weeknights in a 2 BR then stay elsewhere on cash or even in the same unit type on cash. That gives you the option of trying other resorts and options. Since you already have the habit of going every 2 years, it's difficult for me to see you not doing well in the long run with DVC.

If you told us you weren't going to go for a while and get your finances in order, I'd say you may want to consider selling. But if you're going anyway, I can't see how you can do as well as through DVC (except for long weekends). Remember there are other savings for DVC including less meals out, W/D and the odd discounts. As your children get older, you likely will have years you can easily get by with a studio or 1 BR stretching your points even further. And not to mention the luxury of space and privacy {potentially) that DVC affords.

 

[disneycrazed139]

Maybe you could pay off your loan with a lower interest home equity line and save some monthly money income that way.

 

[dianeschlicht]

I'm going to bump this up in hopes that Mom23boys sees it and gets to read all the great responses. Hope she posts again.

 

[msdis]

I sold 2 years ago and bought it all back at a higher cost. We had extra points when we bought back last year and we are now working on 2005 points (2004 are already all gone) so I guess you could say we didn't really want to sell either. We just came back this weekend and we are entertaining the thought of selling again. Yet I know if we do, we will buy it back again. It does seem like an unnecessary asset and we only use it a couple times a year. We do have a lot of money tied up and the dues each year are a big expense. We own almost twice as many points as you, and no kids, so we can rent any size which lets our points go a lot further if we choose.

Is it the cost of DVC or the other expenses that go with it? We are now trying to vacation on the cheap. We just used our AP's for the last time and will not renew for at least a couple of years. There are a lot of "fun" things to do at WDW and the resorts that are virtually free. I know people who go to 1 Disney park for 1 day and say they have been to WDW. It's a perspective thing. We are actually looking forward to a no park trip. We try to eat in the room and watch for car rental coupons/specials and air specials. The time you spend with your children will always be special memories. I think vacations are necessary and there can be a lot of differences with regard to vacation expenses. I agree about staying on lower points where possible, renting out excess points, and cutting other expenses where ever possible. It sounds like you may regret selling and I wonder if there are other options that have been pointed out by everyone that may help you to keep it. Good luck deciding.

 

[mom23boys]

Everyone is so great, thank you all for your great responses.

We sat down after the boys went to bed and decided to keep the DVC.

Dean, you are great with numbers, and it acutally makes sense not to sell if we take advantage of it every other year. Which is why we bought it in the first place, a nice family vacation for a week at Disney.

Our thinking is that if we pay for 2 deluxe or moderate rooms it will cost us more in the long run, as those prices will only go up.

We also decided that if we buy one park ticket every three months the cost will not be so much at one time.

Good point on OKW, my friend loves it their, so we will try it.

Lots of great points on finances, we are in our early 30s and I do not work. We have good savings plan and hopefully will be able to give our children an education and retire nicely. We try to stay ahead of the game, but sometimes it is really hard.


Thank you so much for everything

Sharon

 

[crisi]

It sounds like your current issue is cash flow.

Since you are going to spend the money eventually, you could free up the cash flow by spending it now. I LOVE having savings, but it doesn't do you any good if you are paying interest rates on your loan. I figure you guys must be two years into a five year loan. If you can pay that off faster, you'll free up that cash faster for saving.

The budget board has some great ideas for stretching a dollar. With a small loan like that (or a big loan for that matter) every couple of bucks makes a difference in the term of the loan.

 

[floridafam]

Remember,

DVC will give you a 3 month break from your mortgage payments if you need it. You will still pay dues during this time.

I read this on these boards a few months ago and didn't believe it so I called and it's true. This seems nice for someone who just needs a break.

I'm not sure what all is involved but at least it's an option. Of course, you can't use your pts during that time.

Just an FYI

 

[dianeschlicht]

Originally posted by floridafam
Remember,

DVC will give you a 3 month break from your mortgage payments if you need it. You will still pay dues during this time.

I read this on these boards a few months ago and didn't believe it so I called and it's true. This seems nice for someone who just needs a break.

I'm not sure what all is involved but at least it's an option. Of course, you can't use your pts during that time.

Just an FYI

Interesting info! Something we need to keep in mind when answering newbie questions here.

 

[msdis]

They are called loan extentions. There are certain perameters and usually you end up making the extra payments on the end of a loan. Also, you are usually required to pay the interest on those payments while deferring the principle. Sometimes it doesn't really save very much esp. if you have to pay 3 mos. interest up front not to mention the huge payment on the end. Disney may have their own finance rules but in the banking industry that is usually how it works. I would call and ask for all the details before anyone counts on a 3 month period with any payments.

 

[DebbieB]

Your first trip is Oct 2004? One thing I would consider is you really haven't got much out of it yet for what you have put in. If you sell through a realtor, you will have to pay commissions. You probably will not get much more per point that you paid originally. I've had 10 DVC trips since I bought in late 1999, I think if I had to sell at this point I have got my money's worth out of it.

 

[mom23boys]

Again, thanks for the responses, I was so glad more people responded I lost track of the post. We have decided to stay, our intention for buying was so that we could go every two or three years and stay in Oct or a low season. We live in SE Penna so going everyyear is a stretch, but every 2-3 is great. As of AP we would not use them, I think if we buy a PHP ticket every three months or so, we will not be hit all at once.

Also, I am sorry about the Oct. 2004, we went in Oct 2003, for our first trip and loved it. Before we had stayed in moderate or value and with three kids and my mother, who vacations with us, we had to get two rooms and had no kitchen, so after thinking about that we decided DVC was for us. So our next vacation will be in Oct 2005.

We also refinaced our mortgage and got a great rate and put our DVC mortgage in it, so instead of paying about 11% we are now paying less than 5, I know it is longer but for now that works for us.

Thank you again, I love these boards appretiate your great input.