50 yrs vs. Lifetime

[rufio]

Okay, so I'm already a DVC member and I LOVE it! We use it at least once or twice per year and even used it for our honeymoon. I can't see ever selling it or being without it! For 47 more years, at least. Which brings me to my question. My husband and I have been looking around at other timeshares because we want to do some more travelling outside of Disney World (Europe, Alaska, Australia, etc.). We've attended presentations for Wyndham and Crowne Resorts. Both seem to have their perks, but I've been wondering about the time period involved.

There seems to be some debate over this issue. On the one hand, a lifetime buy-in is for a lifetime! You can use it til you keel over and then will it to family members. But is this a good thing? We would pay about the same thing for an additional timeshare as we did for DVC. However, we lose DVC after 47 more years. If we buy in at Wyndham, for example, we would keep it. The obvious issues is that maintenance fees last forever also, and who knows how much they could go up! Who's to say that having those maintenance fees at 95 is something I'd want to deal with. For that matter, what if my hypothetical children don't want it or can't afford it when I die? So maybe it's better to have a clean break after 47 more years! Or buy back in after those 47 years.

We've thought about just buying more points through DVC and trading through RCI, but we're hung up on this. Opinions?

 

[DVCOwner]

Disney decided when they started into the time share business to use the 50 year model, the reason is as you talked about maintenance fees. Must commercial buildings such as hotels are designed for a life of 50 years, so near the end of that time the building most be completely rebuilt or major renovations must be preformed to bring the building back to life and meet new building live safety codes. So under Florida law a the maintenance reserve for a life time timeshare must include a monthly reserve to accomplish this major reconstruction. This would increase annual dues substantial and dues would have to increase as building cost go up. So with a 50 year dead, this reserve can be keep low and annual dues will be less. Which is best, for me at 59 years old, I prefer the fifty year dead and keeping the annual dues lower. It really is up to each person to pick what is best for them.

 

[EOD K9]

Also, since none of the purchases has hit 50 years yet, they may opt to let you re-buy for a small fee. I don't think Disney knows what their plan is yet.

 

[slappy magoo]

Bear in mind, a timeshare could be a forever responsibility. If the MFs become unaffordable for you, tough, you gotta pay. If you try to sell and no one's buying (look around ebay, it happens A LOT) tough, you keep paying your MFs. If you buy it as a couple and one of you keels, tough, the other's gotta keep paying. You're so old you're not even ambulatory can't even get to your timeshare anymore, tough, you gotta keep paying.

With DVC, you're seeing a resale value that remains pretty strong. People who bought early into the program can sell at a profit. Time will tell if that will stop, or if the later timeshares will start becoming a good investment. It's still a desirable vacation destination so at least for now, you can rent your points with few problems.

 

[GoofGoof]

My 2 cents:

A traditional timeshare has a few major differences to DVC. The biggest one you mentioned is the lifetime vs limited life. For me personally this doesn't matter. By the time my DVC contract expires I will be very old or worse. If it lasted forever I could will it to my kids, but I feel like I've given them enough already. They can pay for their own vacations as adults. Others have pointed out the negatives of a lifetime timeshare so I won't go into it.

One other big difference is the resale market. DVC has an active resale market. You will likely be able to "get out" of your contract if you choose to without losing your entire upfront payment. With other timeshares the resale market could be less strong. While this is a disadvantage should you have to sell it can be a major advantage if you are buying. Spend some time and look around at your options. Buying a timeshare is a real estate transaction so everything is negotiable and deals are out there. I have an uncle who owns several weeks of timeshare at a nice place on the beach in Florida. He picked both weeks up through foreclosure sales at a fraction of what a similar timeshare would cost brand new. The other benefit is the timeshare units are all 2 bedroom. This is both an advantage when you stay at your home resort and when trading in through RCI.

Another difference is DVC has a liquid and active point rental market. Unforeseen events can occur (lost job, major home repair, pregnancy, illness...). If for some reason you need to skip a year or 2 it's pretty easy to rent out your points and get more than enough back to cover MFs. Even if you don't want to go through a rental site send an e-mail to your friends and family and there is likely someone who is planning a WDW vacation who would be willing to rent your points. You can rent out other timeshares, but it's not as easy as DVC.

All that being said, IMHO if you are not going to use DVC points at one of the DVC resorts and you plan to just trade them in through RCI you will probably make out better with a non-Disney Timeshare. If you find one at a good price with a reputable company you can save some money and get better value for your trade in as well.

 

[rufio]

Thanks for the replies! We have awhile before we're going to make a decision, but I like to start researching things well ahead of time and I'm just not sure if a lifetime commitment is for us. You all have made excellent points about DVC resell value and being able to rent out points (we were able to rent ours for $13/point last year) vs. the $1 eBay listings (which is what we were actually looking at earlier today). I'm definitely open to more advice and opinions!

 

[tjkraz]

Obviously there are pros and cons to both approaches. As stated, the DVC expiring contracts mean that the burden will go away at some point. The timeshare industry as a whole has gotten much more litigious about holding owners to their financial obligations. Managers will now aggressively take legal action against owners (often the heirs of the original buyer) who attempt to simply walk away from an unwanted timeshare.

To generalize, the $1 timeshare offers on eBay are properties which have almost zero marketability. Allowing owners to slowly default (walk away) from their ownership places an increasingly higher burden on the remaining owners. Developers have no desire to re-open sales for a 20-30 year old property. Meanwhile the resort still needs to be operated and maintained regardless of whether there are 10,000 owners, 5K or 2K.

That great timeshare deal could prove to be a costly burden for your family if they are stuck paying for it--warts and all--long after you're gone. The entire timeshare industry is only about 30 years old so it's very difficult to predict where things are ultimately headed. In the coming decades, as first-generation owners continue to pass-away, hundreds of resorts will face the challenge of how to best remain solvent.

Ironically Disney is one destination which would NOT seem to face these challenges. All things being equal, there will be demand for WDW and DL accommodations for many years (decades) to come. Still it's one of the few timeshares with a fixed RTU date.

If you do your homework and buy wisely (good timeshare system, area which has natural demand from vacationers), either approach is valid. Honestly I'm not sure that I would get hung up the expiration date. Buy a timeshare because it suits YOUR wants/desires....not because you think you're doing the kids a favor.

 

[EOD K9]

The other thing is this, if you plan on going to WDW (or any Disney property) once a year, or at least every other year, DVC may be right for you.

 

[rufio]

The other thing is this, if you plan on going to WDW (or any Disney property) once a year, or at least every other year, DVC may be right for you.

We already have DVC, we're just looking to supplement that for other travel.

 

[EOD K9]

We already have DVC, we're just looking to supplement that for other travel.

A ha Now the truth comes out.

 

[slappy magoo]

You all have made excellent points about DVC resell value and being able to rent out points (we were able to rent ours for $13/point last year) vs. the $1 eBay listings (which is what we were actually looking at earlier today). I'm definitely open to more advice and opinions!

Just for chucks n' giggles I checked out a $1 timeshare in Orlando. Seller is offering to pay all closing costs and transfer fees, your OOP expenses for this year is your winning bid, plus the maintenance fees, which for this year is $722.

Now, let's just assume that maintenance fees only go up 3% a year. Could be less some years, more others, again, just an exercise in what-ifs.

In 50 years the maintenance fees will be roughly $3165.

Were they to go up 5% a year, it would be almost $8300 50 years from now.

This might not be a big deal, inflation and cost of living might put the minimum wage at $40 an hour by that point, and a loaf of bread might be $25. Your 401K might be worth millions by then. Who knows?

The question is, what do you think your finances might be like 50 years down the road where you can still continue to lay out that money? And then beyond, if your deed is in perpetuity?

Now Disney's MFs will keep going up too, I'm not saying they won't. But at a certain point, it won't be a concern any more.

 

[rufio]

A ha Now the truth comes out.

Yeah... So, I said that in my OP and said we're looking for something to supplement.

 

[slappy magoo]

Yeah... So, I said that in my OP and said we're looking for something to supplement.

So you ADMIT it!

 

[LuvtheGoof]

Personally, we would simply purchase additional DVC points. That way, you can always upgrade your trips to WDW (1bdr instead of a studio type upgrade) when you don't use the extra points to trade out. We are already booking 1 bdrs just for my wife and I because we love the extra room, plus the w&d. We only do studios for short trips where we don't have quite enough points for the 1 bdr.