Seems like disney is trying to crush the dvc resale market!!!

[slappy magoo]

Just a guess based on what I'm reading, but it seems DVC is buying back OKW points if the contract is not only a low price but also low in points. In other words, they'll utilize ROFR on a contract for 50 points at $58pp but they'll let a 300 point contract for the same amount per point slide by.

 

[tjkraz]

While the economics major in me would love to further dispute the accuracy of calling a DVC purchase an investment in any form (mainly because we're dealing with Disney here), I'll refrain from further debate with someone who has close to 2700 messages while this guy now has 2 . But I do agree with the logic you've spelled out.

Most associate financial gain with the word "investment" but the dictionary definition tends to go beyond that:

Noun​

1. The action or process of investing money for profit or material result.
2. A thing that is worth buying because it may be profitable or useful in the future.

​

There is "material result" to be gained from a DVC purchase--many, many nights in Disney accommodations. And it certainly is "useful in the future."
At the end of the day, I suspect we're all on the same page. I don't think anyone using the term "investment" is truly suggesting that they expect to see profit or appreciation in value from a DVC purchase.

 

[Dave D]

Couldn't agree more!

If I can continue to experience moments like the one captured in the photo to the left, then there is not a stock nor mutual fund in any portfolio that will yield a greater return.

 

[Computer Magic]

While the economics major in me would love to further dispute the accuracy of calling a DVC purchase an investment in any form (mainly because we're dealing with Disney here),

I agree. I'm not going to debate either as I enjoy the posters other topics outside of DVC.

 

[Disneykidder]

I invested in my brand new car (six days ago), invested in my cute new shoes, DVC, investing in my sons retainer. All of things are of importance to me and I am happy.

 

[Dave D]

I invested in my brand new car (six days ago), invested in my cute new shoes, DVC, investing in my sons retainer. All of things are of importance to me and I am happy.

ok the cute new shoes? Now you've gone too far!

 

[GoofGoof]

You can look at a financial investment as an alternative to DVC. Take the money you paid up front and invest it in a mutual fund or CDs or a money market account. Each year take money out of that account to pay for your trip to WDW and deposit into the account what your dues would have been if you bought into DVC. When the amount of money in the account hits zero you have hit what a lot of people consider their break-even point for buying into DVC.

Let's say for arguments sake I bought 160 points at BLT for $95 and I break even in 10 years. I paid my $15,000 in upfront money plus 10 years worth of dues and got 10 trips to WDW that would have cost me the same amount of money. If I sell 160 BLT points on the resale market at this point whatever I get paid is a gain for me. For arguments sake again, lets say BLT resale in 10 years is going for low $60s a point. After paying a sales commission I may net close to $9,000 if I sell. If you look at just the purchase and sale as a pure investment I bought in for $15,000 and I sold for $9,000 so I lost $6,000 on my investment. Where that logic is flawed is I got 10 trips to WDW for just my dues each year which is a significant savings over paying cash for a room. The better way to look at it is after breaking even whatever I sell my DVC for is my profit from the investment. If I don't sell ever and let the contract run its course whatever I save each year after break-even by paying dues instead of a cash room rate is my return. This all assumes you would actually be going to WDW either way.

 

[Disneykidder]

Rarely does anything ever get 100% of their money back, either. The new car I bought a few days ago wouldn't get full value if I were to sell it back tomorrow. What makes something valeuable to some is much more than just a price. I suppose spending money on a vacation, a home or a car is putting a price on it but what you get out of it can be priceless. (Now I sound like the Visa commercial.)

 

[Disneykidder]

You can look at a financial investment as an alternative to DVC. Take the money you paid up front and invest it in a mutual fund or CDs or a money market account. Each year take money out of that account to pay for your trip to WDW and deposit into the account what your dues would have been if you bought into DVC. When the amount of money in the account hits zero you have hit what a lot of people consider their break-even point for buying into DVC.

Let's say for arguments sake I bought 160 points at BLT for $95 and I break even in 10 years. I paid my $15,000 in upfront money plus 10 years worth of dues and got 10 trips to WDW that would have cost me the same amount of money. If I sell 160 BLT points on the resale market at this point whatever I get paid is a gain for me. For arguments sake again, lets say BLT resale in 10 years is going for low $60s a point. After paying a sales commission I may net close to $9,000 if I sell. If you look at just the purchase and sale as a pure investment I bought in for $15,000 and I sold for $9,000 so I lost $6,000 on my investment. Where that logic is flawed is I got 10 trips to WDW for just my dues each year which is a significant savings over paying cash for a room. The better way to look at it is after breaking even whatever I sell my DVC for is my profit from the investment. If I don't sell ever and let the contract run its course whatever I save each year after break-even by paying dues instead of a cash room rate is my return. This all assumes you would actually be going to WDW either way.

Yup~~You're not really losing $6,000 on it if you got 10 years out of it. There's the value. 10 trips for $9,000 would be a great deal, too.

 

[GoofGoof]

One more way to possibly look at DVC as an investment. I could buy in and just rent my points out each year without ever using them. In this case I would need to rent for about $5 per point over my dues in order to earn around a 5% return per year on my initial investment. This is assuming buying 160 BLT points for 50 years at a cost of $15,000. I'm not saying its a good or wise investment, but it is in theory possible to do. A 5% return isn't bad compared to a bank account, but there is a lot of risk involved and no guarantee that you can rent the points for $5 over fees. Right now that would be renting at $9.50 a point, but in 10 years after the dues went up each year will the point rental market go up as much?

 

[GoofGoof]

The problem is DVC is a depreciating asset that eventually goes to 0. Even spread out over 50 years, that's $300 per year, a good chunk of the $800 per year made at $5/point over Maintenance Fees times 160 points ($800).

For a high risk 50-year investment, it's a pretty poor rate of return.

Yep. If I lent someone $15,000 over a 50 year period at 5% I would get roughly $800 a year in payments which is where I got the $5 from. Since there is no guarantee I will even be able to rent my points let alone get $5 over fees it's too risky for the 5% return.

Now if I bought a SSR contract for $60 I would only have to spend $10,000 upfront and could make more like an 8% return over the life of the contract. Still not high enough to warrant the risk IMHO.

 

[Unlucky]

I don't know where all this investment talk came from? Investment or savings, what's the big deal. We look at it as we are buying a resale for $4500 and our yearly fee is$250. So our first trip with the dvc contract will be more costly. But by our second trip the savings will start. Look at what the deluxe resorts charge per night, for a week you are probably looking at $2000-$2500 per week. We will be in it for $250 and with air,food,passes we are looking at $3000 including room. As compared to $4500-$5000 without membership. I would say its a good investment with great savings, if you buy resale

 

[Dave D]

I don't know where all this investment talk came from? Investment or savings, what's the big deal. We look at it as we are buying a resale for $4500 and our yearly fee is$250. So our first trip with the dvc contract will be more costly. But by our second trip the savings will start. Look at what the deluxe resorts charge per night, for a week you are probably looking at $2000-$2500 per week. We will be in it for $250 and with air,food,passes we are looking at $3000 including room. As compared to $4500-$5000 without membership. I would say its a good investment with great savings, if you buy resale

Amen.

Can I ask where you bought for $4500 with dues of $250? Seems quite reasonable. Just curious. In case our second attempt at BWV gets grabbed by Disney.

If the price were right, I'd buy into a tarp slung from a churro cart.

 

[Unlucky]

Amen.

Can I ask where you bought for $4500 with dues of $250? Seems quite reasonable. Just curious. In case our second attempt at BWV gets grabbed by Disney.

If the price were right, I'd buy into a tarp slung from a churro cart.

Weare buying a 50 point contract from Saratoga springs, we will go for a week this year and next. We will borrow some points from 2014 this year and 2015 next year. Then take 2015 off and wait to get our 50 points for 2016 in feb. of that year and do the same routine. Go 2 years in a row, then 1 year off. Unless we decide to add on. But right now we think this will work for us.we usually go every other year,so to go 2 years in a row and 1 off we are still getting more disney time

 

[Dave D]

Weare buying a 50 point contract from Saratoga springs, we will go for a week this year and next. We will borrow some points from 2014 this year and 2015 next year. Then take 2015 off and wait to get our 50 points for 2016 in feb. of that year and do the same routine. Go 2 years in a row, then 1 year off. Unless we decide to add on. But right now we think this will work for us.we usually go every other year,so to go 2 years in a row and 1 off we are still getting more disney time

Sounds like a good plan. We stayed at SSR in November, loved it. Beautiful place.

 

[Unlucky]

Just found out at 4:45 that disney passed on our contract. Thank you!!!!!!!!! It took us two attempts. Now we got to get the closing done and hope we have time enough to get one of the resorts we are looking to stay at the first week of December. It will be nice to stay at the deluxe resorts.the only time we did was our honeymoon in 1998. We always stay at the values because of the deals they run,but my wife is all valued out and wanted to try the resale market.i hope staying at the deluxe resorts will enhance our enjoyment at disney!!!!!

 

[Dave D]

Just found out at 4:45 that disney passed on our contract. Thank you!!!!!!!!! It took us two attempts. Now we got to get the closing done and hope we have time enough to get one of the resorts we are looking to stay at the first week of December. It will be nice to stay at the deluxe resorts.the only time we did was our honeymoon in 1998. We always stay at the values because of the deals they run,but my wife is all valued out and wanted to try the resale market.i hope staying at the deluxe resorts will enhance our enjoyment at disney!!!!!

Hey Congrats! That's great news and the first week of December is a nice slow time so the parks are quite manageable. Good for you guys!

 

[Unlucky]

Hey Congrats! That's great news and the first week of December is a nice slow time so the parks are quite manageable. Good for you guys!

Thanks we are very excited. Best of luck to you with your BWV contracts!

 

[toolsnspools]

Weare buying a 50 point contract from Saratoga springs, we will go for a week this year and next. We will borrow some points from 2014 this year and 2015 next year. Then take 2015 off and wait to get our 50 points for 2016 in feb. of that year and do the same routine. Go 2 years in a row, then 1 year off. Unless we decide to add on. But right now we think this will work for us.we usually go every other year,so to go 2 years in a row and 1 off we are still getting more disney time

This is basically how we use our contract, and it works great. If you plan well enough, you can get APs for the 2 trips and save on the cost of park tickets as well.

 

[DVCOwner]

We always stay at the values because of the deals they run,but my wife is all valued out and wanted to try the resale market.i hope staying at the deluxe resorts will enhance our enjoyment at Disney!!!!!

I will once again jump in and say that if you are staying in a one or two bedroom villa, I think DVC is much better than staying at the deluxe resorts. The deluxe resort does not have all the space and amenities that a one or two bedroom villa has. The only thing is that you do not have housekeeping when staying on points, but for us that is not a big deal.