Term on Resales

[DISNEY ZEALOT]

I'm looking for information on resale purchase of Disney Timeshares. We looked into buying one about 4 years ago but backed out because of the 40 year term (would like to leave what we have to the kids/grandkids someday as you can with other timeshares).

Anyway, I was wondering if you purchase a resale property, is the term limited to 1st year purchased (ie. if bought in 1992, would only ownership through 2033)?.... if this is true than some resale property could actually be worth less than others because of the time left on the term...

Please advise...I really want to go with Disney (because that's the only place we vacation) but want to make a wise purchase.

Thanks for your help in advance.

 

[RobDoc]

All of the existing DVC resorts expire on January 31, 2042- regardless when they were originally built or purchased. Only early owners at OKW actually got 50 years of ownership. OKW, VB, HH, BWV, VWL and BCV all end their DVC relationship in 2042.

Saratoga Springs Resort, scheduled to open in May, 2004 will have an expiration date of January 31, 2054- regardless when it is purchased. Future resorts will also likely have the 2054 date, until some time in the future when DVC decides to offer a resort with a new end date.

IMO, the end date should be considered when evaluating a purchase.

Enjoy!

 

[DISNEY ZEALOT]

Thank you so much for your quick reply. I appreciate the information. It will certainly help us in our decision making.

Thanks again.

 

[dianeschlicht]

If you purchase at SSR, your membership will be for 12 additional years, so I am sure your kids will like inheriting that membership from you. We will be mid 90's when our membership expires, and our "kids" will be in their 70's, so we aren't too worried about the ending term. We figure we will have had plenty of great pre-paid WDW trips by then!

 

[pumpkinboy]

Originally posted by WebmasterDoc
IMO, the end date should be considered when evaluating a purchase.

While Doc is absolutely right on this and the additional term feels nice and the knowledge that you can pass these years on to your grandchildren is a very good selling point, the actual cash value of the additional term is fairly small.

Being a finance geek by training, when considering the purchase fo just 40 yrs worth of BWV this past summer, I backed out Disney's calculations: they offered us DVC at $85 per point, and offered $10 per point off the price if we gave back the current year's points. So, assuming that 2002's points were worth $10 and in 2042 the value would be $0, you come out with (value of Next year's points = (this year's points - 11.6925%)), more or less . Under these assumption the present value of the points in years 31-40 added together is not quite $1.30. OK, so this is only a back of the napkin calculation, but the numbers work on a quick Excel spread. Since my calculation was for a mere 40 yrs, the cash value of another 10 yrs would be even smaller. (Just to note, the value of the first 10 yrs was roughly $60, yrs 11-20 was about $16, and yrs 21-30 about $4.50 at a constant discount rate)

This being said, I still would have jumped at the opportunity to have another 10 years of ownership, if offered; we just figured we'd want to stay at BWV more often and did not want to wait until they started sell SSR to get into DVC. But while the additional term has great sales and personal value to folks, the actual additional cash cost to DVD is not much (lower interest rates have made this even more affordable for DVD management).

Just my $0.02 (or is that $1.30?)

 

[RobDoc]

You may want to rerun those numbers, since a purchase of BWV this past summer (or OKW, VWL, BCV, VB or HH) would give you just over 38 years (instead of 40 years) of ownership and SSR will have an additional 12 years of ownership (instead of only 10 years) since it ends in January 2054.

Also, with the $10 MB incentive used, you still paid maintenance fees for the current year- even though you did not get to use those points. Thus the actual "value" of that incentive was reduced by the fees paid.

I would still consider the extra 12 years of ownership when looking at resale or direct purchase.

 

[Laurabearz]

Originally posted by DISNEY ZEALOT


Please advise...I really want to go with Disney (because that's the only place we vacation) but want to make a wise purchase.

Thanks for your help in advance.

We talked about the ending date before we bought, but like you, we knew that 90% of our vacations over the next 20 plus years would be to WDW (so much to do, so little time) and decided that prepaying for the use of (in our case) 2 bedroom onsite villas, out weighted the ending date... I will be...78, ODD will be 39 (i think) and it would be nice for our kids to be able to use it forever.... but it is still super duper de wonderful that we will have 38 years of pre paid onsite accomdations. We bought in, before SSR offered the extra years, so that didnt come into play.

Now that SSR offers the full 50 years... if we werent capped out on points, we would add on there, just for the extra years.

Depending on how many points you plan on buying, maybe consider splitting your purchase between SSR (for the longer term) and say, VWL or BCV because it will be hardest to book those resorts due to their size...

Good luck! And keep us posted!!!!

 

[pumpkinboy]

Originally posted by WebmasterDoc
You may want to rerun those numbers, since a purchase of BWV this past summer (or OKW, VWL, BCV, VB or HH) would give you just over 38 years (instead of 40 years) of ownership and SSR will have an additional 12 years of ownership (instead of only 10 years) since it ends in January 2054.
I would still consider the extra 12 years of ownership when looking at resale or direct purchase.

Once again Doc, you are absolutely right. For simplicity's sake I omitted consideration of dues; I was mainly trying to figure out DVD's calclulations, not the cost/ value to us buyers/ owners. I did rerun the numbers with the shorter period, and it mainly changed the discount rate (1 basis pt lower), but the last 10 years are still cash value of less than $1.50 per point.
I also ran the same calculation assuming an $89 price at SSR (and a lower, 11.2125% discount rate), and came up with DVD present value of the 12 additional years of $0.58, which is a bargain given the value we feel we are getting from it (I'm just pointing out that it is cheap for the developer). With the $5-$10 per point incentives most folks are getting, the deal gets even better for direct purchase.

The fact that there is a robust resale market (and ROFR keeping prices up), gives me a lot of comfort in case and of us should ever need to liquidate our beloved DVC holding.