Own a Resort?

[rawisericho]

So many of my family members have DVC. I'm a huge Disney fan but generally opposed to timeshares. My brother in law was telling me how you will always own a piece of the resort and Disney will always buy it back. I've heard this from multiple time shares but you really own nothing, is DVC different? Also I thought after the 50 years your membership just expires and you don't get anything out of it. He's saying he owns actual property. Clarification?

 

[officialtom]

We did the DVC tour last year and have looked into it extensively. You don't own actual property. The "shares" revert back to Disney at their expiration date. You don't get bought out when they expire.

From another site (and confirmed during our DVC tour):

Membership in Disney Vacation Club is included with ownership at a DVC Resort. The program is currently scheduled to end on January 31, 2042 for OKW, BWV, VWL and BCV. After that date, the present resorts will revert back to Disney ownership. Ownership rights may be transferred to others in a will or by a direct sale, after consult with DVC.

DVC has added additional resorts which have a different end date. The Saratoga Springs Resort & Spa (SSR) memberships run through January 31, 2054. At the Animal Kingdom Villas, the membership runs through January 31, 2047.

 

[rawisericho]

This is what I suspected, thank you.

 

[officialtom]

We did the DVC tour last year and have looked into it extensively. You don't own actual property. The "shares" revert back to Disney at their expiration date. You don't get bought out when they expire.

From another site (and confirmed during our DVC tour):

Membership in Disney Vacation Club is included with ownership at a DVC Resort. The program is currently scheduled to end on January 31, 2042 for OKW, BWV, VWL and BCV. After that date, the present resorts will revert back to Disney ownership. Ownership rights may be transferred to others in a will or by a direct sale, after consult with DVC.

DVC has added additional resorts which have a different end date. The Saratoga Springs Resort & Spa (SSR) memberships run through January 31, 2054. At the Animal Kingdom Villas, the membership runs through January 31, 2047.

I should say, though, that we do plan to buy into DVC as soon as the Canadian dollar gets closer to being on par with the USD. It's projected to take a major jump if Clinton wins, so we could be buying in the near future!

 

[Phonedave]

First off - when you buy a timeshare you DO own part of the resort - any timeshare. That is what a timeshare is, and that is how they work.

I have a deed of real property, filed in the State of Florida, that shows I own a percentage of Saratoga Springs Resort. I pay property taxes on that property and if I already did not own other properties, I could deduct them from my federal income taxes.

The same thing goes for other time shares as well.

Now just because you own a portion of a property does not mean you can do what you want with it. A co-op is the same thing (as opposed to a condominium) In a co-op you own a portion of the entire apartment building, and your deed specifys you have a right to use Unit A for example. In a condo you actually own Unit A ("walls in") and the condo board owns the common areas. There are certain tax ramifications for each, and some are harder to sell and/or buy than others.

Anyway, so yes you own real property when you buy into DVC. However the deed states what you can and cannot do with it. The deed also states that the ownership of the property will revert back to DVC after so many years. You could do this with a house if you wanted to. You could sell a house and include that the ownership reverts back to you after 40 years. Good luck trying to find a buyer for that however.

Now, as far as the property reverting back to DVC, that could be a bad thing, or that could be a good thing. When you own a time share that "never dies" you own it for ever. Just like owning a house, you have to pay taxes on it, and because it is a time share you also have to pay maintenance on it. Many times, when you no longer want that time share, you cannot sell it. Nobody wants it. You are on the hook for the yearly payments forever. The person who built the timeshare does not want it back (because then THEY would be on the hook for the yearly payments). So what happens? You despetately try to unload the thing for next to nothing. Look on eBay, timeshare sites, and travel classifieds, there are many time shares for sale for a dollar. That is not to rent them, that is to buy the timeshare outright - for a dollar.

Now, here is what DVC does.

1) They take back the timeshare at the end of the contract expiration. So there is a limited time you have it. Sometimes timeshares are inherited and the kids end up paying the dues and still cant unload it. DVC has a definite end date.

2) DVC has right of first refusal on any DVC resale. This means that if I wanted to sell you my SSR contract for $100, DVC gets the first option to buy it at that price. They would buy it out from under you, and then sell it at at the current going rate. They do this becaue DVC properties are still in demand. This also has the effect of keeping the resale price of the contracts higher. If you wanted to buy a SSR contract on the resale market, you are going to have to pay upwards of $89 a point ( last I looked) because DVC will snap up any that attempt to sell for lower. This keeps the resale price high. This means that if I wanted to, I could sell my SSR contract, thus ending my yearly dues committment, and getting about $14,000 cash as well.

The robust resale market is one of the reasons I bought DVC. I have a number of friends who have timeshares (nice timeshares) that they would like to get rid of (airline flights change, schedules change, things like that) but they cannot because there is no resale market for them.


-dave


DV

 

[dreamfinder]

The deed does reflect that you own 0.00394854% of the resort (or whatever it works out to be) But as the PP said, it reverts back to DVD at the end of the deed. Disney won't guarantee the buy back of your deed, but they will ensure it sells at a certain price that they have in mind. So if you try to resell Poly for $500 a point, DVD won't touch it since most likely no one else will either. But if you were to try to sell Poly at $50 a point, you would most likely get a buyer, but DVD would exercise refusal, and buy it so they can resell it at the current new point cost.

 

[GoofGoof]

Traditionally there are 2 types of timeshares out there "deeded" timeshares where you are considered to own real property and non-deeded or "right to use" timeshares. A deeded timeshare can be rented out, sold or willed to your heirs, but your use generally is limited to the same unit at the same time each year. Your classic timeshare setup where you own week 26 every year. You own real property and pay real estate taxes usually through your annual dues or maintenance fee. A non-deeded timeshare agreement lets you lease the right to stay at a property. Under this type of agreement, the developer maintains ownership of the real property, and your right to use the property typically is limited to somewhere between 10 and 50 years. The non-deeded timeshares are typically more flexible often times offering flexible weeks or point systems.

The deed is mostly something that makes people more comfortable with their purchase. A lot of people already own houses and they understand what a deed is. The right of use contract is more difficult for people to get comfortable with, especially when you are putting out substantial cash up front. The deed may also provide some additional protection in the unlikely event of bankruptcy (unlikely for DVC at least). The main benefit of the right to use contract is it's flexibility.

With DVC Disney created a hybrid of both systems. You will receive a deed and you will own real property. You can rent, sell or will your DVC points as well. However, the point system adds a ton of flexibility and you are not locked into a specific week (unless you buy a fixed week contract at one of the newer resorts). Under DVC the contract does expire. Each resort has a specific expiry date and you will loose your right to that property after the contract expires. Since the first wave of DVC resorts don't expire until 2042 nobody knows what Disney plans to do with the expired contracts. They did sell 15 year extensions to existing owners for Old Key West a few years back but I don't think it went over all that well. DVC provides the flexibilty of a right to use system with the comfort of deeded property.

The finite end date is viewed by some people as a negative or drawback to DVC, but one of the major drawbacks to traditional timeshares is dealing with aging structures and major repairs. As costs to maintain go up so do maintenance fees. People get "stuck" with timeshares all the time often selling them for $1 just to get out of maintenance fees. With DVC the finite end date and robust resale market eliminate that issue. With 40+ years left on the newer resorts most owners will have more than gotten their money's worth by the time the contract expires.

 

[Phonedave]

There are also other deeded timeshares out there that have flexibility. There has been a sort of gradual change in why timeshares are set up.

Originally everything was a fixed week - Your timeshare is for week #37 and that is when you go. If you want to go at any other time, your only possible recourse would be to find somone that owns a different week and swap with them - maybe.

Then came the floating week type of contract. You own a week, but can take it at any time. You have to stay for a whole week, but that week can change from year to year. Some places have a combo of floating and fixed weeks. If you have a floating week, you can take it on any of say 48 weeks out of the year (subject to availability) but the remainng 4 weeks are blocked out and people actually "own" those weeks. These are usually holiday weeks that are popular. It's interesting because DVC is attempting to do something similar at the VGF right now.

DVC sort of raised the bar with the whole point system thing. That, and the resale market of DVC are what cause me to buy into it. A fixed week, or even a floating week contract does not work for me. My schedule is not always like that. And, as friends of mine have found, airlines don't always play nice either. When you own a Sunday to Saturday week in the Caymans and United messes with the only direct flight out of Newark to Grand Cayman, all of a sudden the flexibility of the point system looks very attractive.

 

[GoofGoof]

There are also other deeded timeshares out there that have flexibility. There has been a sort of gradual change in why timeshares are set up.

Originally everything was a fixed week - Your timeshare is for week #37 and that is when you go. If you want to go at any other time, your only possible recourse would be to find somone that owns a different week and swap with them - maybe.

Then came the floating week type of contract. You own a week, but can take it at any time. You have to stay for a whole week, but that week can change from year to year. Some places have a combo of floating and fixed weeks. If you have a floating week, you can take it on any of say 48 weeks out of the year (subject to availability) but the remainng 4 weeks are blocked out and people actually "own" those weeks. These are usually holiday weeks that are popular. It's interesting because DVC is attempting to do something similar at the VGF right now.

DVC sort of raised the bar with the whole point system thing. That, and the resale market of DVC are what cause me to buy into it. A fixed week, or even a floating week contract does not work for me. My schedule is not always like that. And, as friends of mine have found, airlines don't always play nice either. When you own a Sunday to Saturday week in the Caymans and United messes with the only direct flight out of Newark to Grand Cayman, all of a sudden the flexibility of the point system looks very attractive.

Good points.

I am not sure if DVC was the first program to go to pure points, but it's the most successful one out there. Other chains like Hilton and Marriott have similar products now with a pretty well established trade in program. Back in the day you had to join RCI and pay for the transfers which is still an option today, but you can gain a lot of flexibility while just staying in the chain's resorts.

 

[DVC Mike]

Good points.

I am not sure if DVC was the first program to go to pure points,

Did DVC invent the “points” system?

No. The points-based timeshare system Disney used was not invented by them, but actually dates back to “the Father of Timeshare”, Dr. Guido Renggli. In 1963, Dr. Renggli and German developer Alexander Nette co-founded Hapimag, which started selling timeshares in Europe. Hapimag was the first timeshare operator in the world and is by far the largest in Europe. It was Dr. Renggli who first pioneered the points system. Vacation Internationale introduced the points system in the US in the mid-1970’s, beginning in Hawaii. Trendiest Resorts, based in the state of Washington, was the first timeshare company to only sell a points-based timeshare. Disney patterned its system on these models.​

https://dvcinfo.com/dvc-information/history-of-dvc/the-year-1991/#5

 

[GoofGoof]

Did DVC invent the “points” system?

No. The points-based timeshare system Disney used was not invented by them, but actually dates back to “the Father of Timeshare”, Dr. Guido Renggli. In 1963, Dr. Renggli and German developer Alexander Nette co-founded Hapimag, which started selling timeshares in Europe. Hapimag was the first timeshare operator in the world and is by far the largest in Europe. It was Dr. Renggli who first pioneered the points system. Vacation Internationale introduced the points system in the US in the mid-1970’s, beginning in Hawaii. Trendiest Resorts, based in the state of Washington, was the first timeshare company to only sell a points-based timeshare. Disney patterned its system on these models.​

https://dvcinfo.com/dvc-information/history-of-dvc/the-year-1991/#5

Good info Mike

 

[Simba's Mom]

So many of my family members have DVC. I'm a huge Disney fan but generally opposed to timeshares. My brother in law was telling me how you will always own a piece of the resort and Disney will always buy it back. I've heard this from multiple time shares but you really own nothing, is DVC different? Also I thought after the 50 years your membership just expires and you don't get anything out of it. He's saying he owns actual property. Clarification?

You mean I don't own anything? I thought sure that door was mine! In all honesty I was dumb enough to believe that when I took the tour (yup, I took the tour by myself-DH wasn't at all interested). When they said "Own a piece of Disney" I was so ready to buy. When I got back and DH saw the huge smile on my face, he said "You know, I think we should buy" (smart man!) Now, 14 years later, he'll be one of the first to say that it was the best decision we ever made.