Selling and profit DVC

[JudyTL]

Okay... This is not my concern but I am interested in learning if there are any stats on whether people make or lose money in selling their DVC timeshares. Does anyone have any personal stories or stats on this?

Thanks,
Judy

 

[Chuck S]

As in selling the entire contract, or renting reservations? Either way, it depends upon how long you have owned as to the amount of return you will get.

For instance, we bought in 1992 at $51.50 per point, and at the current resale price of approx. $77 per point, if we chose to sell we would recover (obviously) all of our initial investment and about 1/3 of our annual dues to date...not bad for any timeshare, that would give us 15 years of pretty cheap accommodations.

Now, renting at an average of $10 per point, we would recover about 2 times our annual dues on those points, so still not too bad.

But overall, if you plan to use most of your points for your own family vacation, the value is in the extended use at DVC resorts over the life of you contract vs. what you would pay cash for the same or similar accommodations at a deluxe class Disney resort.

 

[JudyTL]

Chuck,

You were so smart. I wish I did that... but too much was going on in my life. You have provided another aspect of the DVC ownership by considering the renting of unused points. Do you know upfront the amount of points you want to rent? Or is it something you just play by ear?

I am wondering if this is a long term investment opportunity or just a way to reduce overtime vacation costs?

Thanks,
Judy

 

[Chuck S]

Do not buy it as a long term investment. Resale price will obviously drop as the contracts near the end of their "right to use" lease (2042 for older resorts, 2054 for SSR and newer resorts.)

Do not purchase additional points with the sole intent of renting the excess, sooner or later there may be a decrease in demand, or maintenance/dues may eventually reach a point where it is no longer beneficial.

If DVC is used as intended, it is a way to save $$$ on your future vacation accommodations.

 

[Lynne M]

I am wondering if this is a long term investment opportunity or just a way to reduce overtime vacation costs?

Thanks,
Judy

DVC (or any timeshare) is not an investment vehicle. The resale prices are, to some extent, inflated because of DVC's high ROFR prices. If that should change, the resale values will drop. Also, as we get closer to the end of the contracts, at some point the resale prices will drop.

I wouldn't necessarily look at DVC as a cost-savings either. Many DVC members go to WDW more often than they did before they bought in, and thus have additional costs for park passes, food, airfare etc. It certainly can save you money, it all depends on how you vacation.

I think many people look at it as a way to pre-pay for their lodging expenses, and hold the line against the annual resort rack rate increases. Maintenance fees do increase every year, but many folks are betting that they won't go up as much as the resort rates do.

 

[dumbo71]

I posted a real scenario in another thread. I recently sold many points and I posted how I personally made out. That post was off the top of my head, I'll make this one a little more real life with the actual numbers rounded for simplicity.

500 points at OKW purchased at $52 per point. 500 x $52 = $26000 Then I had 600 more points added on at BWV at $78 pp. = $46,800. My total buy in for those several contacts was $72,800.

Now I sold those contracts. They brought in different prices but close so I'll round for simplicity. OKW 500 points sold for an average of $74 per point. 500 x $74 = 37000. You have to subtract 10% commision on that so that leaves a net of $33300.

Now BWV, I sold those 600 for an average of $85 pp. 600 x $85 =$51000 - commision = $45900.

$45,900 + $33000 = $78900. That is what I netteed when I sold. Subtract what I paid and you have a return of $6100.

There was dues of course so call them $4 per point. $4 x 500 points = $2000 times 14 years of ownership at OKW and you have $28000 there. BWV 600 x 4 = 2400 x 7 years and you have $16800. So total dues paid for both resorts is 16800 + 28000 = $44800 total dues paid.

$44800 - my "profit" from the sale and you have $38700 that my points "cost" me to use.

Now, I had 24 rentals averaging $2500 give or take and you have $60000 taken in renting.

$60000 taken in minus my costs of 38700 and I netted $21,300 PROFIT. So with all the trips I took probable 35 or so. I was paid $21,300 to take those trips. YES, DVC paid me to travel.

Moral, yes you can make money from DVC. Can it be done going forward? I don't know but I certainly made out OK.

 

[Deb & Bill]

...Now, I had 24 rentals averaging $2500 give or take and you have $60000 taken in renting....

Hey, Dumbo, you might want to delete this line. I will after you do.

 

[ahmo]

Is selling a contract considered a real property sale?

 

[dumbo71]

Hey, Dumbo, you might want to delete this line. I will after you do.

Why would I do that?

I declared all rental income with the IRS. I've also discussed this with DVC Legal and others at DVC. They stated nothing was wrong with how I was using my membership. I've never morphed or actually even done a single transfer.

Remember, those 24 rentals were over 12 -14 years and they amounted to less than 40% of my total point holdings. Most were used by my family or as free trips for my family.

 

[JudyTL]

Dumbo,

You are no dumbo. You had 1100 points. WOW. So, you rented out the weeks instead of using them. That is what I was wondering. AKV will be such a situation for the first couple of years. The novelity will increase prices. However, I think the initial cost of ownership is going to be more than what people expect. My view is AKV will be requiring 25 grand and 250 points for a week. I think Disney is going to be a top vacation company with fantasy holidays for people to escape. I see SKV as an initial investment. Disney will be a way to travel saftly around the world. It is an interesting business from my view. I think it is an investment.

Thank you for your candor. Do you have any points left?

Judy

 

[dumbo71]

Dumbo,

You are no dumbo. You had 1100 points. WOW. So, you rented out the weeks instead of using them. That is what I was wondering. AKV will be such a situation for the first couple of years. The novelity will increase prices. However, I think the initial cost of ownership is going to be more than what people expect. My view is AKV will be requiring 25 grand and 250 points for a week. I think Disney is going to be a top vacation company with fantasy holidays for people to escape. I see SKV as an initial investment. Disney will be a way to travel saftly around the world. It is an interesting business from my view. I think it is an investment.

Thank you for your candor. Do you have any points left?

Judy

Actually I had 1450. I now have 350 at SSR.

I'm feeling very point deprived right now.

I didn't rent the weeks....... well I did but the intent of purchasing and then adding on was for personal use. I just couldn't find the time to travel to WDW that often. I still got in a good 15 - 20 days per year. I was going to keep adding and then spend a good month at WDW when I retired. Well with some recent changes I decided to get out while the prices were still high. I kept my SSR add on for the longer term. With ROFR that contract should stay reasonably high for some time longer. I'll likely get out of that as well before it drops.

Who knows what the future holds. Something tells me the wife is going to want some AKV points.

 

[DVC Dude]

Since 1991, DVC is one of the rare timeshares that you can buy from the developer, keep it for 3 years or longer, and sell for a profit.

Most TS drop 50% the day you sign the contract.

 

[dumbo71]

Since 1991, DVC is one of the rare timeshares that you can buy from the developer, keep it for 3 years or longer, and sell for a profit.

Most TS drop 50% the day you sign the contract.

While I agree I feel it should be noted that this has nothing to do with how good/bad DVC is or isn't.

It is simply a product of DVC using ROFR to artificially keep prices high. They do this to steer buyers right back where they want them and that is buying directly from them and buying whatever the current offering is.

 

[DVC Dude]

While I agree I feel it should be noted that this has nothing to do with how good/bad DVC is or isn't.

It is simply a product of DVC using ROFR to artificially keep prices high. They do this to steer buyers right back where they want them and that is buying directly from them and buying whatever the current offering is.

It is more that just that as Marriott and other timeshares use ROFR. Unfortunately, you can buy a 2 bedroom Marriott Platinum week in Orlando for $26k from Marriott and then you will be lucky to sell it for $13k.

The most I have seen DVC drop in price is 15% and with the last SSR promotion for family and frineds discount, DVC was selling for less than the resale prices on The Timeshare Store.

Thus, DVC is a much "safer" buy than just about any other timeshare out there. I think there are other factors keeping the price up there besides ROFR, but I thank DVC for exercising ROFR when it spots a lowball price.

 

[salmoneous]

It is simply a product of DVC using ROFR to artificially keep prices high.

Many of us believe that ROFR has very little, if any impact on resale prices.

 

[kdzgon]

Many of us believe that ROFR has very little, if any impact on resale prices.

I think the reality is somewhere between the two camps. I think ROFR does have an effect, but it can only prop up prices so much - if there is little or no demand, no amount of price-setting via ROFR can force the price to in some cases nearly double the original price.