Small Contracts- so torn on options.

[mmackeymouse]

So, my family is wanting to get their feet wet with DVC with a 25 or 50 point contract. We are regular renters of points, so we have decided it may be time to jump in the pool.

We are just so torn on what to do. Ideally, we'd like BWV to be our home resort, and considering BWV Studio is an 11 month thing, we are looking at BWV; however you have to time it just right to get a 25 or 50 point at BWV.

We are also open to SSR or OKW, due to the value, especially with SSR having the extra years. So, we've thought of doing a 25 at first, and maybe adding on later. But, by the time we do that, it may be just as cost-effective to just go all-in on BWV to begin with.

Pricing doesn't seem all that great to me- $119ish a point compared to $155 through Disney....not that much of a savings. I know supply and demand can affect things. Do resale prices ever go down or will it only get more expensive?

 

[DVCDisneyRunner]

In the short term I don't see prices coming down. The economy is good and people have more discretionary income for things like DVC. If there were to be a slow down in the economy sometime down the road that would impact resale prices, but might also impact your decision to purchase in "bad economic times". So if you are interested and DVC is a good fit for you I say don't wait for the prices to drop as they likely will not for sometime and when they do you may no longer be in a position to buy. Keep in mind that by purchasing a small contract you are limiting your risk but you are also adding significantly to the cost. If you were to purchase 2-3 25-50 point contract you will have to pay a much higher price per point and you will also be paying for multiple closing. You may want to consider getting one contract of 100-150 points at the start. Over all this would save you money on upfront cost and still be small enough that it would be easy to sell if you decided you no longer wanted to be part of DVC.

Good luck with your decision.

 

[mmackeymouse]

Thanks for your insight.

Our thoughts on the small contract is we could pay in cash. If we did a 100+ point contract while we COULD pay in cash, we would more than likely want to finance a purchase that large. And, we definitely don't want to finance, since the interest would wipe out any savings from the points.

I definitely hate the thought of paying closing costs x2 or 3 though.

 

[DVCDisneyRunner]

Thanks for your insight.

Our thoughts on the small contract is we could pay in cash. If we did a 100+ point contract while we COULD pay in cash, we would more than likely want to finance a purchase that large. And, we definitely don't want to finance, since the interest would wipe out any savings from the points.

I definitely hate the thought of paying closing costs x2 or 3 though.

Your thought process is sound IMO. The interest would likely be as much or more over the term of the financing as the extra closing. Paying cash and feeling comfortable with your purchase is a good strategy.

Keep us posted.

 

[disneydenisel]

Would you consider buying a small contract from Disney direct? They used to only sell a minimum of 100 points to new members, but I recall them lowering the minimum (my guide told me, at one point) to 50.

I have purchased some small 25-50 point contracts from Disney because I saved on closing costs and it was quick. I paid more, but I didn't have to go searching for small contracts, wait for ROFR, or pay high closing costs. Not sure if this is an option, but thought I would throw it out there .

 

[Deb & Bill]

You might also notify the regular reselling companies that you are interested in a smaller BWV contract. See if they will get you on an email list or call list to let you know if they get one.

 

[Dean]

So, my family is wanting to get their feet wet with DVC with a 25 or 50 point contract. We are regular renters of points, so we have decided it may be time to jump in the pool.

We are just so torn on what to do. Ideally, we'd like BWV to be our home resort, and considering BWV Studio is an 11 month thing, we are looking at BWV; however you have to time it just right to get a 25 or 50 point at BWV.

We are also open to SSR or OKW, due to the value, especially with SSR having the extra years. So, we've thought of doing a 25 at first, and maybe adding on later. But, by the time we do that, it may be just as cost-effective to just go all-in on BWV to begin with.

Pricing doesn't seem all that great to me- $119ish a point compared to $155 through Disney....not that much of a savings. I know supply and demand can affect things. Do resale prices ever go down or will it only get more expensive?

IMO it's usually best in this situation to go larger. If there's a financial reason for not doing so, I'd generally recommend waiting, saving and buying more later not buying now. I think it's better to buy more even if you have to rent some out than to limit oneself to this size contract as the first purchase. As a minimum I'd suggest looking at what a typical trip would be and going about over. You'll open up a lot more contracts and likely a lot better contracts likely at a lower price. If it doesn't work out you'll be able to sell just as easily and likely for a better long term return.

 

[mmackeymouse]

Would you consider buying a small contract from Disney direct? They used to only sell a minimum of 100 points to new members, but I recall them lowering the minimum (my guide told me, at one point) to 50.

I have purchased some small 25-50 point contracts from Disney because I saved on closing costs and it was quick. I paid more, but I didn't have to go searching for small contracts, wait for ROFR, or pay high closing costs. Not sure if this is an option, but thought I would throw it out there .

Thanks for the info! I didn't realize Disney did small contracts; I thought there was like a 160 point minimum. It definitely gives us something to think about. Although, if we were going to spend the extra money to get 50 points directly through dvc, I think I'd rather spend just a little more and get a re-sale with more points....it's a hard decision.

But, it does make me want to give DVC a call and see what kind of deals they can get me on a 50 point contract.

You might also notify the regular reselling companies that you are interested in a smaller BWV contract. See if they will get you on an email list or call list to let you know if they get one.

Great idea! I'm on those sites just about every day anyway, but maybe they can give me a heads up if they know of any new, good ones coming on the market.

IMO it's usually best in this situation to go larger. If there's a financial reason for not doing so, I'd generally recommend waiting, saving and buying more later not buying now. I think it's better to buy more even if you have to rent some out than to limit oneself to this size contract as the first purchase. As a minimum I'd suggest looking at what a typical trip would be and going about over. You'll open up a lot more contracts and likely a lot better contracts likely at a lower price. If it doesn't work out you'll be able to sell just as easily and likely for a better long term return.

It is financial...and it isn't. It is more of a personality thing. As I said, we could do a larger contract. But...it's the same reason we finance our vehicles, even though we could buy in cash. It's the same reason we take out home equity loans on major improvements, even though we could pay in cash. It's the same reason we pay medical/dental bills in installments instead of in one lump sum. We just aren't risk-takers financially, and we like to have a nice kitty. You never know when something may happen that homeowners insurance may not cover (like a sinkhole or flood) or the dog needs some major life-saving surgery. Even if we didn't take the money out of our checking or savings; even if we set aside so much each pay check into a separate account and saved up that way...at the end of it all, we would probably still want to pocket the money and finance a large expense.

With 3,000 here, 4,000 there...we are much more likely to do it....even though logically, I know we are spending more money that way.

 

[lovin'fl]

After buying 5 contracts via resale we bought 55 points at BWV direct (and then did another 25 a few months later). Small contracts at BWV are very hard to find and they go fast and for top dollar so the difference isn't ungodly. BWV is a good one to own a small contract at because those points can stretch if you book a standard view studio. That's why we bought BWV over BCV even though BCV is more a favorite for us. AKV and OKW are good for stretching points as well. Now a studio at OKW is easy to get but standard view studios at BWV and value studios at AKV are tough to get and you need to own there for those. If you want longer contract life, maybe go AKV.

 

[Dean]

It is financial...and it isn't. It is more of a personality thing. As I said, we could do a larger contract. But...it's the same reason we finance our vehicles, even though we could buy in cash. It's the same reason we take out home equity loans on major improvements, even though we could pay in cash. It's the same reason we pay medical/dental bills in installments instead of in one lump sum. We just aren't risk-takers financially, and we like to have a nice kitty. You never know when something may happen that homeowners insurance may not cover (like a sinkhole or flood) or the dog needs some major life-saving surgery. Even if we didn't take the money out of our checking or savings; even if we set aside so much each pay check into a separate account and saved up that way...at the end of it all, we would probably still want to pocket the money and finance a large expense.

With 3,000 here, 4,000 there...we are much more likely to do it....even though logically, I know we are spending more money that way.

Your choice of course but I would submit the risk is much more with the approach you outlined. With not financing, having an emergency fund and saving for purchases you get everything you delineated with dramatically lower risk. IMO for a luxury purchase, if one can't pay for it and not have to worry about the risks you listed, one can't afford it. Regardless of the reasons, one problem with trying to go to small is you create a situation where you always have to count every point and try to worry about every issue or reallocation plus you lock yourself out of so many possibilities It's the same issue as chasing discount codes, even worse.

 

[mmackeymouse]

After buying 5 contracts via resale we bought 55 points at BWV direct (and then did another 25 a few months later). Small contracts at BWV are very hard to find and they go fast and for top dollar so the difference isn't ungodly. BWV is a good one to own a small contract at because those points can stretch if you book a standard view studio. That's why we bought BWV over BCV even though BCV is more a favorite for us. AKV and OKW are good for stretching points as well. Now a studio at OKW is easy to get but standard view studios at BWV and value studios at AKV are tough to get and you need to own there for those. If you want longer contract life, maybe go AKV.

Yep, that high-demand Standard Studio is what we will be shooting for most times, so we definitely want to get BWV in some capacity, just to have that 11 month window. But, like you said, other resorts we might get more for the money and possibly more years for the money as well. I think that is the definite pro to getting a couple of different smaller contracts.

Your choice of course but I would submit the risk is much more with the approach you outlined. With not financing, having an emergency fund and saving for purchases you get everything you delineated with dramatically lower risk. IMO for a luxury purchase, if one can't pay for it and not have to worry about the risks you listed, one can't afford it. Regardless of the reasons, one problem with trying to go to small is you create a situation where you always have to count every point and try to worry about every issue or reallocation plus you lock yourself out of so many possibilities It's the same issue as chasing discount codes, even worse.

I think we will have to agree to disagree on what it means to be able to afford something, but your point is taken. I guess the logical side of me and the side that is a worrier are kind of at odds with each other right now. The logical side of me knows that 1) something catastrophic probably isn't going to happen 2) even if it does, we will be able to afford it. And, I guess that is why dropping $3k here and there and smaller contracts doesn't bother me. But, the worry-wart side of me thinks of the Alanis Morrisette song Ironic, and feels the second we sign over $11 K, all of our cars would explode or something and insurance wouldn't cover it.

Our original thought was: We are going to be renting points anyway. Let's just get a small contract, so we at least have some of the DVC benefits, access to the availability tool, and we'll just have to rent fewer points when the time comes. Well, that led to doing the math, reading Dis Board threads, and now, here we are.

 

[mjillard]

If you keep second-guessing yourself, you may end up talking yourself right out of it, which would be a shame since you clearly have given it some thought and concluded that it is right for your family. If you want to get your feet wet with a small contract first, then do that, higher price per point and all. But for boardwalk I would still go resale if I could find a nice loaded contract for 100/pt. Disney charges 130. For me even 100 isn't worth it because of the 2042 expiration. Still far away but close enough to worry about resale value.

 

[MsTessP]

Right now BWV has a high resale value. Obviously, that's bound to change as 2042 gets closer. But based on the thousands of resale contracts sold, it appears that the average DVC members owns for just 10 years - obviously some for a longer time, but others for much shorter. Because of this, it is my opinion that the end date of a resort's contract should not be the prevailing reason for choosing which resort to buy.