Vero Beach Resale - a good bargain?

[rchristiansen]

Why should I NOT buy Vero Beach for a resale option? I've run the numbers and even with their extra annual dues, over time, it's still less costly than other properties.

Here's my situation

I have 100 OKW points & 50 AKV points. I want to get at least 150 more points so we can do 1 -2 weeks in a 1 bedroom or 1 week in a 2 bedroom each year. I am done with the studios. To do that I have to combine all my points anyway and I'm not able to book until the 7 month window anyway. So why shouldn't I buy those Vero points?

Any advice is greatly appreciated.

 

[Buckeye Fan]

I'm a SSR and VB owner, but bought VB because I want the 8-11 month booking window. Otherwise, I personally would have never considered purchasing there. I'm doing some very simple math and making some big assumptions, but here's at least something to consider:

If you look at today's resales, you can purchase VB for around $55 per point, or SSR for $78 per point. The difference in buy-in price for 150 points is $3,450.

If you take the difference between today's maintenance fees and assume the gap remains the same, the difference is $1.83 per point ($6.04 - $4.21), or $274.50 per year.

Take your savings, $3,450 and divide it by $274.50, and your break even point is 12.57 years.

If you took the $3,450 and invested it, sure, it would stretch this out longer. However, I didn't bank on that, because I think the MFs at VB will go up faster than SSR because it's a coastal property. Also, SSR has a 2057 expiration date versus a 2042 if that's important to you. If I were purchasing today and was buying based on the best deal versus "stay where you want to stay," you can't beat the price of SSR for both contract term and MFs. I would say the same for OKW, but there just aren't enough 2057 expiration date contracts out there yet.

Best of luck with your future purchase! I pondered this one for a while, but really wanted points at either HHI or VB. I only went with VB because of the ability to do a VB/WDW combo vacation!

 

[Dean]

Three reasons.

1. Significantly higher dues.
2. No home resort priority for WDW.
3. Lower resale value.

Only buy VB if you plan to stay there part of the time in a Beach Cottage, 1 or 2 BR units esp during peak times.

 

[dvcnewgirl]

I bought a VB resale too add extra points with the cash I had on hand. I do not think it was a bad decision. Yes the fees are higher but it is only a 50 point contract and I have no problem paying my dues. I would rather do that then go in debt for a contract. Only buy VB if you plan on going times that you can book at the 7 month window. Good Luck.

 

[bbowers]

I bought a VB resale too add extra points with the cash I had on hand. I do not think it was a bad decision. Yes the fees are higher but it is only a 50 point contract and I have no problem paying my dues. I would rather do that then go in debt for a contract. Only buy VB if you plan on going times that you can book at the 7 month window. Good Luck.

Us, too! It had the same use year, the extra years don't mean anything to us (DH will be 89, I'll be 79 - HOPEFULLY we'll still be going to WDW, but no guarantees and no kids to leave our points to), AND we actually do plan to spend a day or two at VB once in a while (and possibly give my mom and step-dad a few nights there occasionally while they winter in Sarasota).

 

[BillPA]

I would only buy where I would not mind staying. As the number of DVC members increases, the 11 month window will be more and more important.

OKW is about $10-12 more per point, but the dues are $1.50 a point more at VB than OKW so in about 7-8 years you will be paying more to be at VB than just adding at OKW.
By the end of the contract in 2042 you will have more than and extra $50 a point tied up in VB. And with all or most of your points at one resort, you can book those longer trips at 11 months, instead on hoping you can get what you want at 7 months. JMHO, good luck with your add on, no matter where you pick.

 

[carlbarry]

I'm a SSR and VB owner, but bought VB because I want the 8-11 month booking window. Otherwise, I personally would have never considered purchasing there. I'm doing some very simple math and making some big assumptions, but here's at least something to consider:

If you look at today's resales, you can purchase VB for around $55 per point, or SSR for $78 per point. The difference in buy-in price for 150 points is $3,450.

If you take the difference between today's maintenance fees and assume the gap remains the same, the difference is $1.83 per point ($6.04 - $4.21), or $274.50 per year.

Take your savings, $3,450 and divide it by $274.50, and your break even point is 12.57 years.

If you took the $3,450 and invested it, sure, it would stretch this out longer. However, I didn't bank on that, because I think the MFs at VB will go up faster than SSR because it's a coastal property. Also, SSR has a 2057 expiration date versus a 2042 if that's important to you. If I were purchasing today and was buying based on the best deal versus "stay where you want to stay," you can't beat the price of SSR for both contract term and MFs. I would say the same for OKW, but there just aren't enough 2057 expiration date contracts out there yet.

Best of luck with your future purchase! I pondered this one for a while, but really wanted points at either HHI or VB. I only went with VB because of the ability to do a VB/WDW combo vacation!

I don't understand ignoring the interest from the $3,450 savings. Even at a modest 5% interest, at your calculated 12.57 year break-even point, you'd have an additional (approximately) $2,199 in savings. That should pay for at least a bit of increase in MF.

 

[Buckeye Fan]

I don't understand ignoring the interest from the $3,450 savings. Even at a modest 5% interest, at your calculated 12.57 year break-even point, you'd have an additional (approximately) $2,199 in savings. That should pay for at least a bit of increase in MF.

Absolutely agree that under normal circumstances, interest would play a big role. This assumes you'd invest that money, though. Also, being a math major and working in the insurance industry, I just feel the risk of the MFs going up at either HHI or VB is considerably higher than the land-locked Orlando resorts. Since DVC has the option to increase fees by up to 15%, it would only take one or two tropical storms/hurricanes during a 15 year period to eat up any interest you would earn. The earlier in the contract term the loss, the less of a bargain HHI/VB becomes. If there's a storm that comes through next year and Dis takes a 10% increase at VB for a couple of years in a row and SSR, for example, takes a 3 - 5% increase, interest can't keep up.

Honestly, much of what we're talking about requires a crystal ball . If I were purchasing, though, I just don't know that I'd buy VB or HHI unless I really wanted the 8-11 month booking window there. JMHO.

Sorry I didn't explain more of my assumptions, as I can see why you were going !!! Just one point of view to consider.

 

[sigmaphi289]

As I am also in the insurance industry, specializing in CAT property, I would be curious if HH and VB had a spike in MF's after Katrina. With property insurance going up over 75% the year after, i would be curious if HH and VB felt the cost or if they spread it out over the entire portfolio. I would bet that it is spread out over the entire portfolio, but if not, you would see a large spike in MF's, if another hurricane hits this year.

I just joined, but I bet if you look at the property insurance line item on the balance sheet you will see a large increase in the insurance price every year. To say that the premium could go up over $750,000 in 1 year is not unheard of for a location the size of these 2 locations. With less owners, the MF's may have higher movement.

Just food for thought.

 

[Arthur27]

Doesn't Disney have the right to sell off VB and/or HHI? I remember my guide telling me this when I was in the decision process. I asked him about VB for it was so much cheaper.

 

[Dean]

Doesn't Disney have the right to sell off VB and/or HHI? I remember my guide telling me this when I was in the decision process. I asked him about VB for it was so much cheaper.

Technically they could sell of the management contract or not renew if there were significant damages. The owners there would also kick DVC out if they chose but the process would be difficult. As I read the legal documents, Disney can't just simply say "see you later". The POS contains a list of situations where this could happen though the management contract is a separate entity.

 

[rchristiansen]

Thanks everyone. I think we'll end up looking for an OKW contract instead - so we have a large quantity all at one resort.