When is it worth getting a DVC contract with a 2042 expiration?

[CATANDSAL1009]

When is it worth getting a DVC contract with a 2042 expiration? Is it worth getting? I currently own at BLT and Saratoga. I do like some of the resorts with a 2042 expiration, but it doesn't feel like it's the best investment. On the flip side, it at least only give me 20 yrs of maintenance fees and who knows in 20yrs whether those points will matter much anyway. Plus, my youngest child will be 23 in 20 yrs.

 

[princessmocha]

Well, I am little on the older side (47) so in 20 years we may be at the end of our Disney days or not going as much, we have a couple that end in 2042 and others that end much later that the plan is our kids will take them one, or at least right now they want to take them on one day. We recently bought a couple beach club contracts because we LOVE staying there and it is difficult at the 7 months mark (but not impossible) and I want the ease of booking there at the 11 month mark.

 

[perchy]

The 2042 doesn’t bother me. No, it’s not the best “investment” but DVC is not an investment vehicle. It’s prepaid vacations.

They always say buy where you want to stay. So if that’s a resort with a 2042 expiration, so be it. Like you said, you’re on the hook for the dues for fewer years. It’s your hassle free out.

 

[The Jackal]

Well, I’m a little on the younger side (46) so we own SSR and OKWE (2057). If we stop going ( who am I fooling) our DD and DDG will use the points till they expire. But BWV and BCV at this point in time cost per point per length are usually the highest at WDW, but if you want to stay there in a studio most of the year, you have to own there. At some point in the future the resale prices of the 2042 resorts will plummet.

 

[Brett Wyman]

Our main contract is 2057 but we did a HHI add on so we could stay in better rooms while our kids are still young. It was so cheap we have no intention of ever reselling it anyway.

 

[davidl81]

To be 100% honest the math is hard on a 2042 resort at this point compared to renting. Let’s say you buy BWV at heck $120 a point. Comes out to $6 a year basically for the remaining points. Then add $8 a year for fees now you are at $14 a year per point. You can rent points for $15-$18 a point so there is not a huge savings in buying really. I personally think the 2042 resorts are overpriced given the limited amount of years left on them, but we also don’t know what will happen when they expire.

 

[pinkxray]

I bought a small BWV contract in 2020 for $120 a pt. I will be 60 in 2042.
I mainly bought it for RunDisney weekend or food and wine weekends. I love being able to walk to DHS and Epcot. I love the slide/pool,studios fit 5( again only for 2-3 nights), also love the views over Cresent lake.
Im not a big Beach Club or SAB person but I could see owning there if that’s where I wanted to stay. Renting math might sound good but there is always risk with renting. I prefer being able to use my points when I want and being able to switch dates or cancel without having to contact someone else.
Also with the prices now on SSR resale being closer to $120, I don’t feel too bad when I use BWV points somewhere else. We were able to snag 2 nights at GFV for Princess Half weekend using some BWV points with SSR points.
It will stink when 2042 comes and I no longer have low point charts and access to DHS, but by the time I’m 60 RunDisney weekends will probably be a thing of the past for me. Who knows,maybe Ill be happy to get rid of the maintenance fees too.

 

[RoseGold]

Math says rent, at least for now. I expect rental prices to go up soon to match the crazy resale pricing.

I have considered owning one for 10 years and reselling. I actually think it will hold with the crazy Epcot construction and the appeal of picking up a starter contract in 10 years.

I can't make the math work though. My brain just says get more SAP and get the 1BR at 7 months.

My contracts are all <$10/pt/year. BC/BBW are at 14-15, higher even than this pricing, which is a few months old. That's a BIG jump.
https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-spring-2021/

 

[Pens Fan]

We originally bought Copper Creek with its 2068 expiration so that our adult son can use it for years to come. We also figured that should he decide down the road not to keep it, he would have no trouble selling some or all of it (we have 3 contracts). But when we added on a resale HHI contract the 2042 expiration was kind of perfect for us. My husband is going to retire in a few years and we love that resort and plan on using those points almost exclusively there. It will allow us to vacation on HHI but not burden our son with more maintenance fees down the road for something he might not use that often.

It all just depends on your long term plans. 2042 works for a lot of people, but for others not so much.

 

[Brian Noble]

To be 100% honest the math is hard on a 2042 resort at this point compared to renting. Let’s say you buy BWV at heck $120 a point. Comes out to $6 a year basically for the remaining points. Then add $8 a year for fees now you are at $14 a year per point

It's a little worse than that, because time-value-of-money suggests that the purchase price now is "more expensive" than spending 1/20th of the purchase price each year for 20 years.

If we figure inflation is going to hover around 2% for the next 20 years, the first-year cost on a $120 purchase spread over 20 years is more like $7.34 (amortized) plus $8ish for fees, which puts you at $15.35ish. (The past 20 years saw inflation at about 2.11%). If you figure inflation might be higher at 3% the first-year cost goes up to about $8.07+$8ish, or $16 and change.

On top of all that, owning is less flexible than renting. At that point the argument for buying a 2042 resort is pretty thin.

Of course, that assumes you'd hold until the end. If you do sell, things get more complicated. I think a lot of people are assuming that the 2042 resorts hold their resale value. That can't last forever, but Disney's Reality Distortion Field (aka "the magic") might keep the resale prices higher longer than I think.

Math says rent, at least for now. I expect rental prices to go up soon to match the crazy resale pricing.

The rental prices don't really depend on how much resale deeds cost, because most renters are not making the buy vs. rent decision; they are making the rent from an owner vs. book a conventional hotel room decision. I think for most cases (renters who just want a hotel room) there is more headroom in rental rates bc the studio points-vs-cash comparison is so favorable to points.

 

[Brian Noble]

At that point the argument for buying a 2042 resort is pretty thin.

If I were in the market for a 2042 resort, I'd be inclined to do the following:

I would take the purchase price, and put it into an index fund. Each year, I'd add to that index fund what an owner pays for Dues. Also each year, I'd rent the stay that I would have used those points for, paying for it out of that index fund.

If my math and assumptions are correct, I will have money left over in that index fund 20 years from now, while a person who owned the resort has an expired deed. We both have the same memories though.

 

[CraigInPA]

With the present price of points for the current 2042 contracts, the math doesn't really work. The only reason to buy one of them at this point is if you really have a passion for that particular resort and only plan to stay there. And even that is tenuous, given the price that rentals of these resorts bring. i.e., it may be cheaper to rent points there than to be an owner. In some number of years, the 2042 contracts will stagnate, or decline, in price to reflect the limited number of years remaining.

 

[havoc315]

When is it worth getting a DVC contract with a 2042 expiration? Is it worth getting? I currently own at BLT and Saratoga. I do like some of the resorts with a 2042 expiration, but it doesn't feel like it's the best investment. On the flip side, it at least only give me 20 yrs of maintenance fees and who knows in 20yrs whether those points will matter much anyway. Plus, my youngest child will be 23 in 20 yrs.

It all comes down to math. And with less than 20 years left, shorter contracts make it easier to compute straight math with less unpredictability.
For example, we really don't need to deal with future re-sale value. In 2042, the resale value will be zero.
And while we can't predict point rental costs in 30 years, we can more reliability estimate the more immediate future.

I've done the math. Direct purchase of 2042 resorts, at Disney prices, it just insane. You're MUCH better off just renting points.
With resale -- it really comes down to how good a resale price you can get. But generally speaking, looking at current re-sale prices, buying does NOT offer a significant advantage over renting points. If you really maximize your use of the points over 20 years, you will get a fair savings over renting points. But no huge savings. And if you don't maximize your point use, you may only break even versus renting points.

Basically, unless you were getting an unbelievably good re-sale price, which somehow passes ROFR, I wouldn't consider buying a 2042 resort.

 

[havoc315]

If I were in the market for a 2042 resort, I'd be inclined to do the following:

I would take the purchase price, and put it into an index fund. Each year, I'd add to that index fund what an owner pays for Dues. Also each year, I'd rent the stay that I would have used those points for, paying for it out of that index fund.

If my math and assumptions are correct, I will have money left over in that index fund 20 years from now, while a person who owned the resort has an expired deed. We both have the same memories though.

I've run the math as well, and I believe you are 100% correct.

 

[thanxfornoticin]

I'm going to go non-math for a moment. If you don't view it as 'investment', but instead of future memories of a place you'd like to be, then maybe 20 years on the lease isn't a bad deal. For example, if you wish to purchase 20 years at Beach Club, which expires in 42. But your family situation is such that you want to enjoy that pool, or HS, or EPCOT and the festivals and the upcoming new attractions - having control of your own points can be much nicer than working through the rental process. You can make and even adjust your own reservations.

I know renting right now seems to be easier than ever, probably because of a slight glut in DVC points yet due to the pandemic. Will renting continue to be easy in the future when that balances out? I surely don't know. But I prefer having the location I want at my fingertips for my own family and my own memories. Poor investment? Perhaps. Priceless investment for memories and flexibility? Perhaps. And who knows, maybe you can do a little bit of your own 'renting' to those who do not wish to invest, if there's a year you don't use the points for your own family! I expect there is no perfect answer for all families and you'll need to go with your own situation. Best of luck with your decision!

 

[hhisc16]

When is it worth getting a DVC contract with a 2042 expiration? Is it worth getting? I currently own at BLT and Saratoga. I do like some of the resorts with a 2042 expiration, but it doesn't feel like it's the best investment. On the flip side, it at least only give me 20 yrs of maintenance fees and who knows in 20yrs whether those points will matter much anyway. Plus, my youngest child will be 23 in 20 yrs.

We bought a 2042 resort this year. (HHI)
Our child will be 22 in 2042.
We bought our home resort due to location.
If you view DVC as an investment, you will lose on a 2042 resort.
We bought a 2042 DVC contract bc we want our family to enjoy the next 20 years with Disney.
(After 2042, who knows what will happen anyway...)

 

[CarolMN]

FWIW, math doesn't matter if the BWV are where you want to be most of the time, especially if you want a standard or Boardwalk view. BWV contracts are still less expensive than Disney's cash prices. Getting into the BWV is tough at 7 months for many times of the year.

I love BWV. The ability to walk to two parks & the skyliner is a HUGE plus. Vacation time is too precious to me to spend it wishing I were stying somewhere else.

 

[havoc315]

FWIW, math doesn't matter if the BWV are where you want to be mos of the time, especially if you want a standard or Boardwalk view. BWV contracts are still less expensive than Disney's cash prices. Getting into the BWV is tough at 7 months for many times of the year.

I love BWV. The ability to walk to two parks & the skyliner is a HUGE plus. Vacation time is too precious to me to spend it wishing I were saying somewhere else.

I love chocolate ice cream. But if I have a choice of paying $4 per cup or $5 per cup, I won’t spend the extra just out of the love.

If purchasing BWV is more expensive than renting the exact same rooms, then the math still matters. I’ve never seen an inability to rent BWV at 11 months.

 

[thanxfornoticin]

I love chocolate ice cream. But if I have a choice of paying $4 per cup or $5 per cup, I won’t spend the extra just out of the love.

I love the analogy. But if I can pay $5 for that cup and know it's my freezer and I can grab it anytime, as opposed to $4 for that cup and I need to depend on things going smoothly with a stranger I'll never meet, it might be worth the $5. Of course, it would be a no-brainer if the cost diff was only a $1! I realize the price diff could be an important driver. A significant driver.

 

[CaptainAmerica]

If I were in the market for a 2042 resort, I'd be inclined to do the following:

I would take the purchase price, and put it into an index fund. Each year, I'd add to that index fund what an owner pays for Dues. Also each year, I'd rent the stay that I would have used those points for, paying for it out of that index fund.

If my math and assumptions are correct, I will have money left over in that index fund 20 years from now, while a person who owned the resort has an expired deed. We both have the same memories though.

Biggest variables obviously are your discount rate, expected return, inflation of dues, inflation of rack rate, and projected discounts.

When a lot of people do their math, they often fail to take into account the fact that cash guests can often get deluxe resorts at a 25% or 30% discount off of rack rate. I have access to a cast member 50% discount so my math was even tighter, but it still worked out that a handful of contracts were still "worth it" for me... SSR, AKV, Aulani subsidized, and OKW 2057.