What am I missing? DVC vs. Marriot

[RoseGold]

Actually, there is an entire section of the legal industry that is devoted to getting people out of bad time shares.
Disney product is only narrow by your definition of vacation. For someone that enjoys central Florida and Laid back vacation traveling all over the world is ridiculous.

Actually, because of the ROFR Disney is pretty much going to go up in value. Unless you buy in the last 15 years of a resort you will come out on top. It is simple math.

DVC isn't simple math, and people have gotten burned hard, including foreclosure. Yes, even on DVC. Plenty of people didn't come out on top.

It's possible that you can't even get out of DVC, if you have to bring money to the table and are underwater. I own a lot of DVC and I love DVC, but I don't think it's fair to act like its performance in the last decade is likely, or even possible. Buying historic DVC was a great investment, but that doesn't mean modern DVC is. With the way modern Disney is making choices, I view owning as increasingly risky.

 

[Robbie Cottam]

DVC isn't simple math, and people have gotten burned hard, including foreclosure. Yes, even on DVC. Plenty of people didn't come out on top.

It's possible that you can't even get out of DVC, if you have to bring money to the table and are underwater. I own a lot of DVC and I love DVC, but I don't think it's fair to act like its performance in the last decade is likely, or even possible. Buying historic DVC was a great investment, but that doesn't mean modern DVC is. With the way modern Disney is making choices, I view owning as increasingly risky.

Foreclosure, is not DVC fault, Foreclosure is the inability to do simple math.
I have NEVER seen DVC underwater or upside down.

The requirement to purchase is 10 percent down. So at the time of purchase you have paid for 5 years of vacations. If you used all the points you had access to and NEVER maid a payment, you would not be upside down.

I agree that some recent statements by Disney have been lets say not well thought out. That does make DVC a risk, maybe less attractive but not a junk bond level risk.

 

[RoseGold]

I have NEVER seen DVC underwater or upside down.

CCV opened at $176 in 2017. Average CCV resale right now is in the 170s. 150s after commission to sell. That's underwater for most, especially with closing costs. If financed, I don't see how it couldn't be underwater.

 

[Robbie Cottam]

Ok I see the problem you either can’t do simple math or are leaving the value of those 5 years worth of points out to make your argument…. And if you are saying the brokers are getting 10percent I would say they are raping people ….

I Found CCV from 169 to 199

So on the big end of those number you argument is void

However for the sake of argument let’s use you numbers.

Assuming someone bought in at 176 got no discounts or incentives and netted 150 at the sale. I would argument the still made money, or value….

Those 5 years worth of points usage have a next worth of 10 to 14 dollars per point. After dues.

So again we can use the small number over 5 years there is a net income or benefit of 50 dollars per point … not to mention and tax benefits to that owning provided….

So net sale price of 150. Using your questions numbers. Plus 50 dollars in captured value Bring us to 200 less the 176 dollar purchase price. Is 24 dollars a point ahead conservatively ….

 

[CarolMN]

I have NEVER seen DVC underwater or upside down.

Then you are very lucky, and there are many who experienced foreclosure and/or who had to bring money to the table to sell their contracts.

Those of us who have owned from the late 90's and early-mid 2000's remember that time well. Incidentally, during that time ROFR was practically never exercised. Those who were more comfortable with the risk and had the cash got some very good deals.

IMO, DVC is a luxury and should be purchased with discretionary income. There is no guarantee that it will be worth anything when one wants out. YMMV.

 

[Docwheeze]

CCV opened at $176 in 2017. Average CCV resale right now is in the 170s. 150s after commission to sell. That's underwater for most, especially with closing costs. If financed, I don't see how it couldn't be underwater.

Maybe I am missing something here but I am a newbie. If you took 5 years of vacations staying at CCV with a relative value of $3-5000/week, wouldn't that mean you were not underwater if you sold for 10% less than purchase price accounting for value of family vacations at the "happiest place on earth"?

 

[Robbie Cottam]

Maybe I am missing something here but I am a newbie. If you took 5 years of vacations staying at CCV with a relative value of $3-5000/week, wouldn't that mean you were not underwater if you sold for 10% less than purchase price accounting for value of family vacations at the "happiest place on earth"?

Thank you

 

[Robbie Cottam]

Then you are very lucky, and there are many who experienced foreclosure and/or who had to bring money to the table to sell their contracts.

Those of us who have owned from the late 90's and early-mid 2000's remember that time well. Incidentally, during that time ROFR was practically never exercised. Those who were more comfortable with the risk and had the cash got some very good deals.

IMO, DVC is a luxury and should be purchased with discretionary income. There is no guarantee that it will be worth anything when one wants out. YMMV.

So I guess what you are saying is a made my investment wisely then since I bought in 2006 and have only every scene equity in my purchases.

 

[CarolMN]

So I guess what you are saying is a made my investment wisely then since I bought in 2006 and have only every scene equity in my purchases.

I think you are lucky. I do not consider DVC a financial investment and do not recommend that anyone consider it one. YMMV.

 

[Dyefrog]

Maybe I am missing something here but I am a newbie. If you took 5 years of vacations staying at CCV with a relative value of $3-5000/week, wouldn't that mean you were not underwater if you sold for 10% less than purchase price accounting for value of family vacations at the "happiest place on earth"?

If you ignore the time value of the money spent upfront, historically, the numbers pencil out that you've vacationed for free. Using for example a 10 year use of your contract, the latest chart I saw showing the past 20 years of point values on the resale market, they've appreciated more than the cost of MF's. So a $30k contract sold 10 years later for $40k with ~$1,000 annual dues averaged, nets break even. The actual data shows better than break even. I posted the source for these a while back and can dig up again if needed.

Additionally, using the current VGF sales number of $207pp +$7.01pp MF's works out to about $12pp and you can rent them on this board's resales sponser for $18. If you're losing money on a DVC contract, you're doing it wrong.
Where it gets muddy is how do you value your stays. Most that are arguing being underwater have left that out of the equation. Like someone earlier may have pointed out, even if you get foreclosed on or have to come to the table with a few grand, what value did you get from DVC when you used it.
Past performance is no guarantee of future gains.

 

[BamaGuy44]

If you're losing money on a DVC contract, you're doing it wrong.
Where it gets muddy is how do you value your stays. Most that are arguing being underwater have left that out of the equation. Like someone earlier may have pointed out, even if you get foreclosed on or have to come to the table with a few grand, what value did you get from DVC when you used it.
Past performance is no guarantee of future gains.

Yeah that’s the part people leave out when comparing the cost to renting points. It will be an awkward conversation when you contact the people you’ve rented from over the last 10 years and tell them you’d like most of your money back.

 

[Robbie Cottam]

I think you are lucky. I do not consider DVC a financial investment and do not recommend that anyone consider it one. YMMV.

Your opinion and financial advice is noted which one of the houses do you work for Zack’s Barclays Wells Fargo

 

[Robbie Cottam]

Where it gets muddy is how do you value your stays. Most that are arguing being underwater have left that out of the equation. Like someone earlier may have pointed out, even if you get foreclosed on or have to come to the table with a few grand, what value did you get from DVC when you used it

Three simple was to figure this number out
You listed two of them…. Thirds is cash rack rate for the same room, same dates. This is the number you use to make the most impact ….

The actually value is somewhere between the two you listed

Use the more conservative and average 100 point contract and you can safely call a 100 point vacation 1200 dollars a year.

 

[Brian Noble]

I have NEVER seen DVC underwater or upside down.

Then you missed the Great Recession.

 

[Robbie Cottam]

Then you missed the Great Recession.

No not really,

 

[Brian Noble]

Then you weren't paying attention. There were plenty of people who had underwater sales, many of whom posted here.

But I am reminded of this great scene from Office Space.

 

[Robbie Cottam]

Then you weren't paying attention. There were plenty of people who had underwater sales, many of whom posted here.

But I am reminded of this great scene from Office Space.

proper planning prevent pass poor performance….
i was never upside down in fact I added more, twice

I was paying attention maybe those people with alleged under water sales weren’t.

Or maybe they are using that fuzzy math were they used the points gave those years of vacation no dollar value…. then cried how much money they lost, after take 15 years of vacation

 

[Duckbug.Ducktales]

Or maybe they are using that fuzzy math were they used the points gave those years of vacation no dollar value…. then cried how much money they lost, after take 15 years of vacation

Ah, I think this is it! Y'all just have different definitions of what it is to be underwater.

 

[Brian Noble]

You mean the one Robbie uses and the one everyone else does?

Either way: anyone who tells you that any item’s value always goes up is either selling something or a fool.

 

[Robbie Cottam]

You mean the one Robbie uses and the one everyone else does?

Either way: anyone who tells you that any item’s value always goes up is either selling something or a fool.

When you were ”underwater” what value did YOU put on all the years you used or rented your points? My guess is zero!

I purchased SSR at $61 a point in 2006 and by 2012 was renting some points at a net of 9 dollars a point. 7 years of renting and I would have OWNED my points for free….. However the vacations I took, the points I used had an approximate value of 5000 dollars a year i recaptured by using the points as compared to rack rate.

So please tell Me what number you put on the value of the vacation you used your points on before they were repoed