What would longtime DVC members do?

[crisi]

Are you considering the remaining value of your contract? If you sell now, you can recover a good part of your initial investment making your vacations cost, even cheapier.

I'm evaluating purchasing DVC, and the remaining value of a contract after 10 years is almost the most important variable of all my projections.

I've seen than most people make their evaluations considering the full life of the contracts (until expiration, so remaining value = 0). I understand doing that, but if instead you do a 8, 10 or 15 years projection considering a final sale of your contract at an estimated remaining value, your results can be very different.

Even making that kind of projection, you can decide you want to keep your contract until expiration. But that decision hasnt to be made today, you can decide that anytime.

A timeframe of 8, 10 or 15 years is easier to foresee in terms of your family vacation requirements/plans. Most families can see they are wanting to go yearly/often when their kids are younger but are not sure what will happen after that. So, adding the remaining value of their contract at the "end" of that period makes a lot of sense when you are considering the purchase.

Yeah, it isn't a material amount of money for us, so I'm not worried about it.

 

[crisi]

So why hold on to the contract?

Our best friends spent ten years trying to conceive a baby. We promised them a trip for their child. The baby (adopted) turns two this Christmas. We've decided to hold onto the points at least until we take that trip - and we've decided the ideal age is four. This years points have been promised to my Girl Scouts. After that, we will see - my daughter will be college age and if I have the points and she uses them for Spring Break- we may keep them. If we decide to get away from Minnesota winters, we may keep them. Or we may sell them.

We now have them - it is, in material terms - a wash for us if I use them or rent them or sell them. So I might as well hang onto them until we take this trip, and then reevaluate.

 

[disneynutz]

Umm...didn't you just buy yourself even more points, Bill?

Yes we bought VGF, fixed week lake view one bedroom and yes we own at 6 resorts. VGF is a beautiful resort and overall we still love WDW for now, but honestly not as much as in the past. We have gone from 3 WDW vacations per year to 1 or 2 and if we were park people, we would have sold our contracts. We just got back from a 14 day stay at VGF and BWV and the MK was very crowed and not fun as in prior Decembers.

DVC is still saving us some money but I have learned to do as much a possible ourselves. I don't call MS unless I have to, I don't waitlist, I book online, and overall I have less issues if I do it all myself.

Bill

 

[crisi]

I could not agree more about costs. People are concerned about their MF increasing since they purchased 5, 10, 20 years ago? How about the increased rack rates when paying cash over those time periods? What do you think the rack rates will be like in another 20 years? It needs to be understood that yes DVC is expensive, and yes it will only get more expensive each year as time goes on. But that is the world we live in. You are still receiving a consistent discount vs paying cash over the length of your contract, and you will continue to do so, regardless of an increase in MF or a reduction in "perks".

I think it isn't just the dues - its the dues, and the ticket costs, and the food, and the airfare, and the fact that your kids stop being kids and start being Disney Adults. And that as they get older, you have more demands on your time and your money (and few people have seen their incomes increase). So each year, Disney is taking a bigger bite out of a lot of people's discretionary income. If it takes - say 5% of your discretionary income, maybe you are happy - when its 25%, maybe that is too much.

And yes, Disney is inexpensive compared to a ski vacation - but its expensive compared to a week at an all inclusive in Mexico. Its expensive compared to staying on the North Shore for a week. Its expensive compared to the week we spent in Washington DC. Its even expensive compared to a week in Europe (minus airfare). For my daughter right now, if her choice is a week in London or a week in Disney - its London - and my son wants Mexico.

 

[RonaldBravo]

When I first learned about the DVC, two weeks ago from a lady behind us in the long dole whip line, (the longest line we had to wait in during our trip, it was good but not 45 mins good) I was really ready to sign up through Disney but it seems everyday I learn another downside to the DVC. To me the reduction of the points value the further you travel from the parks is the biggest turn off. I would just assume go through disney but if the points really don't matter in other places all that much a resale seems to make much better sense.

 

[bwvBound]

What would longtime DVC members do?
If you had to buy into it today? Would you do it? Assume all of the circumstances are the same when you bought into originally.

Most likely, "Yes," we'd do it again. We've owned SSR for nearly 10 years now (May 2004, first purchase). We have three contracts, all direct.

We flirted with our DVC purchase for 6 years before buying. We had traded into BWV on multiple occasions through II using other timeshare and after thoughtful evaluation, we determined to purchase BWV, 200 points, Dec UY via Resale. Unfortunately for us, multiple resale attempts fell through and we put our card on file with DVC Sales to go on the waitlist for this "sold out" property direct. After several months we received a message, "We have your resort!" The arriving paperwork, however, was for SSR with Oct UY. We sent it back … but after multiple rounds of paperwork mailed back and forth (each time they kept pushing SSR/Oct) … we caved and with reluctance purchased the property the Developer was pushing at the time.

Admittedly, it was a fairly bad start. We were a little soured by the shady sales tactic and were buying SSR as "sight unseen" with intentions to "always" book BWV for an annual business conference at the Dolphin/Swan.

FWIW, we've had zero troubles using SSR points all across the DVC system. We've surprised ourselves in how we've used our points -- expanding our original intentions "business conference only" to actually taking "vacations" on them. Our first visit to our "home resort" came more than 5 years after initial purchase to try out the newly opened Treehouse Villas. We hit 10 nights this year across three different reservations at the Grand Cal (our closest DVC) and truly enjoyed our visit to Aulani during its Grand Opening Celebration, Sept 2011.

DVC isn't my favorite timeshare. But it is quite flexible w/in the DVC system. We are enjoying that even as our situation changes -- we find ways to entertain family and friends using DVC and our other timeshares. In all, it has carried its own weight and proved itself "useful." We certainly don't regret our decision to accept SSR and we'd likely do it again.

 

[disneynutz]

When I first learned about the DVC, two weeks ago from a lady behind us in the long dole whip line, (the longest line we had to wait in during our trip, it was good but not 45 mins good) I was really ready to sign up through Disney but it seems everyday I learn another downside to the DVC. To me the reduction of the points value the further you travel from the parks is the biggest turn off. I would just assume go through disney but if the points really don't matter in other places all that much a resale seems to make much better sense.

In a nut shell, DVC may save you some money if you currently stay at deluxe resorts and vacation at WDW each year. Buy resale and take the time to discover your favorite resort and for added insurance, buy the correct UY based on your typical vacation time.

Expect some DVC issues and understand that other than selling, you will have no choice but to go along with what ever Disney does and accepting any changes that they make.

In the past a 45 min wait for a dole whip was unheard of, tomorrow they will charge more and make you wait longer. At some point you will say enough is enough and that unfortunately that is where we maybe headed.

 

[Minniesgal]

I just had a conversation with my 10 year old that made me happy again we have our DVC

We are from Scotland but currently live in Paris and we go every other year so we bank and borrow. Our next trip was due to be 2015. However for work we willbe moving to Australia in 2014 for 3 years. My plan for 2015 was to do. VCG and Aulani but with the Austalian school holidays being in June and not being owners at Aulaini it looks difficult so I am discussing going to Orlando for 8 nights resort time and Universal time and then do 5 nights at VGC where we do the parks. My ten year old piped in with that's a great idea I love the hotels way more than the parks at WDW. It true we all do, we hire boats, we swim most days, we love the restaurants and just chilling in the room. That's what we have got out of DVC is we slow down, we no longer rush and really enjoy the Disney resorts. The only thing I would change is I'd buy my points 6 years earlier.

 

[RonaldBravo]

Thank y'all again for putting up with my questions!

 

[DVC Mike]

If you had to buy into it today? Would you do it? Assume all of the circumstances are the same when you bought into originally.

Yes.

 

[Dean]

If you had to buy into it today? Would you do it? Assume all of the circumstances are the same when you bought into originally.

Probably not for several reasons. Truthfully our situation and options have changed more than DVC has so it's not really a knock on DVC. If I didn't own now and all else I had were the same I'd likely buy a small contract of 50-75 (maybe even 25) just for the internal perks.

AI'm evaluating purchasing DVC, and the remaining value of a contract after 10 years is almost the most important variable of all my projections.

I've seen than most people make their evaluations considering the full life of the contracts (until expiration, so remaining value = 0). I understand doing that, but if instead you do a 8, 10 or 15 years projection considering a final sale of your contract at an estimated remaining value, your results can be very different.

Even making that kind of projection, you can decide you want to keep your contract until expiration. But that decision hasnt to be made today, you can decide that anytime.

A timeframe of 8, 10 or 15 years is easier to foresee in terms of your family vacation requirements/plans. Most families can see they are wanting to go yearly/often when their kids are younger but are not sure what will happen after that. So, adding the remaining value of their contract at the "end" of that period makes a lot of sense when you are considering the purchase.

I would offer a third option as the best and safest approach. It's difficult to project resale value in 10-15 years, a LOT could change between now and then. Plus there's no guarantee one can sell at any price. What I recommend is projecting NO value in 10-15 years but continued dues for the life of the contract. IMO, if the numbers don't work with this assumption, that person really is not a good candidate for DVC anyway.

I know you lose out on the adventures by disney stuff when you by resale, but what about the other perks? Would I retain any of those or not?

You lose NOTHING of value with a resale purchase as it stands right now. IF buying DVC without any other perks doesn't make sense, buying simply doesn't make sense. Currently you lose ALL cash type exchanges and the ability to do member cruises unless you own qualified points. You still have BVTC and RCI options and all direct membership perks like dining discounts. Unless DVC develops a VIP system, it's unlikely there will be any substantial changes going forward but I'm sure there will be some changes.

Is Disney expensive? Yes but comparatively, it is less expensive that other vacations. For instance. My family and I are going to Colorado next week to ski. The vacation compared to Disney is very expensive. We will likely spend as much if not more for a week in CO than for 2 weeks at Disney.

Consider when thinking Disney is expensive is that when you are in the park, all your entertainment is paid for. There is no time limit with the exception of park hours. Stay for an hour, come back later in the day or be in the park for 12-20 hrs. Your choice.

Overall Disney, inc DVC, is a very expensive trip from where I stand. It sounds like you're comparing to paying cash for the rooms and considering the "value" you feel. Even living 4 hours away, I find DVC one of our most expensive trips overall even trading in through RCI so paying less than most. For larger trips (HI, Aruba, MX) we usually average around $175 per day for 2 people including ALL expenses (car, food, air, recreation AND indirect timeshare expenses) give or take. As for cooking, I don't think most DVC members realize much savings from the kitchen though some do.

When I first learned about the DVC, two weeks ago from a lady behind us in the long dole whip line, (the longest line we had to wait in during our trip, it was good but not 45 mins good) I was really ready to sign up through Disney but it seems everyday I learn another downside to the DVC. To me the reduction of the points value the further you travel from the parks is the biggest turn off. I would just assume go through disney but if the points really don't matter in other places all that much a resale seems to make much better sense.

IMO one should spend around 6 months minimum of active investigation before buying DVC or any other timeshare if one is new to the concept. Forewarned is forearmed as they say.

 

[PacoDF]

I would offer a third option as the best and safest approach. It's difficult to project resale value in 10-15 years, a LOT could change between now and then. Plus there's no guarantee one can sell at any price. What I recommend is projecting NO value in 10-15 years but continued dues for the life of the contract. IMO, if the numbers don't work with this assumption, that person really is not a good candidate for DVC anyway.
.

I get your point and is good advice for those with very high risk aversion. But I think is very unlikely that in 10-15 years the remaining value of a contract would be=0. It could be more or less, but not zero. Not even the oldest resorts.

 

[Deb & Bill]

I get your point and is good advice for those with very high risk aversion. But I think is very unlikely that in 10-15 years the remaining value of a contract would be=0. It could be more or less, but not zero. Not even the oldest resorts.

The US could be owned by China in 10-15 years and the dollar will be worthless. You just don't know.

 

[Dean]

I get your point and is good advice for those with very high risk aversion. But I think is very unlikely that in 10-15 years the remaining value of a contract would be=0. It could be more or less, but not zero. Not even the oldest resorts.

IMO it's very possible. One may not even be able to sell in 10-15 years. But for sake of discussion, lets take both sides. If I'm wrong and DVC is worth say on average 50% in 15 years (realistic number), then you're better off than my estimate. If you're wrong and DVC isn't worth nearly as much as you're assuming, you're in trouble. When I look at DVC from an investment standpoint, I assume ROI in 10 years which seems to be the standard for risky investments from what little I've seen. The problem is that IF you have to drag it out far longer to make sense, it really doesn't, your margin is too small. IMO one needs a 20% savings or a 20% increased real value to justify buying and DVC rack rates mean nothing in that equation UNLESS you would have paid that consistently anyway not owning. There's almost no way to get that buying retail or buying extra points to use for cash type exchanges.

 

[PacoDF]

There's almost no way to get that buying retail or buying extra points to use for cash type exchanges.

I agree with you 100% on that. Paying direct prices will move the break even year way beyond 10 years. Even more if you spend your points in cheapier cash trades.

I also concur with you that if your break even is more than 10 years away, you shouldn't buy.

 

[Dean]

I agree with you 100% on that. Paying direct prices will move the break even year way beyond 10 years. Even more if you spend your points in cheapier cash trades.

I also conquer with you that if your break even is more than 10 years away, you shouldn't buy.

I've arrived at the opinion that for DVC to make sense, the financials should make sense with reasonable to conservative numbers as a qualifying consideration. However, after that, timeshares are really mostly behavior more than finances. I've also come to believe that risk is far more important than the numbers for timeshares and finances in general. Some believe that's radical and that normal is to finance cars, vacations, etc but to me normal=broke.

 

[browniemtb]

If you had to buy into it today? Would you do it? Assume all of the circumstances are the same when you bought into originally.

NO or could be a maybe....we tossed around the buy in question for a long time. My wife and I would go once a year....then the kids started coming. Our stays went from small rooms to our last non DVC stay at the Wilderness Cabins, love them by the way. Over the years we kept seeing the price go up so finally we took the plunge at BWV. With 4 kids DVC has been a life saver. Now I look at Disney direct pricing at over $100 point the affordability factor comes into play for many families, mine included. Resale would be the only way I would entertain the thought today....direct pricing is crazy. With that being said, we love our DVC especially that it's all paid off!

 

[NoleFan]

With current direct pricing, it takes too long to break even on the purchase. This also does not take into account the cost of tickets, dining, etc. As much as I love Disney, I would have to pass on the cost of buying direct right now.

 

[starjazz]

I'm beginning to think, as a new perspective buyer, that a Wyndham membership might be better. Is that a bad word around here?

 

[tjkraz]

I'm beginning to think, as a new perspective buyer, that a Wyndham membership might be better. Is that a bad word around here?

In many ways, I agree with you. But I also think there's a fair amount of risk involved.

If you hope to frequently stay at DVC resorts via trade, the trade process carries a lot of uncertainties. Understanding the system will definitely give you an advantage but you're still at the mercy of DVC/RCI in terms of what is released for trade.

If either DVC or Wyndham change their trading affiliations, you could have a problem.

You won't get access to DVC perks like the Annual Pass discount.

There are additional fees involved in the trading process. Not enormous fees but still worthy of note.

And I think there's a much greater risk you could be stuck with the Wyndham contract beyond the point you may wish to own it. DVC contracts have historically been very easy to sell, given proper pricing. Wyndham...not so much. Of course, if you're paying next-to-nothing to buy a Wyndham contract, there isn't any expectation of a back-end return. But under poor market conditions, you may be unable to get rid of the Wyndham points for months or years after you start looking for a buyer.