Sirwalterraleigh
Premium Member
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Nw Resale Restrictions as of Jan 19th
- Thread starter nickys
- Start date
I think “MFs” is a little strong...afterall - they have a duty to the stockholders
Before anyone fails to understand and decides to report me, MFs obviously stands for Maintenance Fees!
Sirwalterraleigh
Premium Member
Before anyone fails to understand and decides to report me, MFs obviously stands for Maintenance Fees!
Huh? What?
“Maintenance fees” doesn’t have the same pop
kong1802
Well-Known Member
Still not the same as the ability to sell it for at least half of what you paid...I could see these going to 25% at best, but admittedly thats 100% cynical speculation.
I agree.
But I’m in the camp that says I bought to use the points. As long as I get to enjoy using them to stay at WDW, then I don’t need to recoup my costs. It’s a nice perk, but it didn’t factor into the reasons that convinced us to buy. What did contribute to the decision was the fact that our liability, or rather that of our sons, would end.
Are you meaning general resales will fall, or just those for the future resorts? Thing is, even new resale buyers at the original 14 resorts can trade; it’s just one resort they are barred from. Now for Riviera, then I think it will affect the resale value, but there again there are many members who only really ever stay at their home resort. Where it could affect sales, direct or resale, is the fact that at 7 months they could be shut out of staying anywhere.
kong1802
Well-Known Member
That's fair. We ended up not buying resale or direct as the equation was still a little too lopsided in the early years if something happened and we changed our minds (like $1k AP's, lol). But I understand that resale value might never really come up.
I don't think general resales will be adversely affected by this change. Nothing really changes, just no ability for the new resorts, but I can't see that being a selling point or non selling point since those resorts #1 don't yet exist and #2 didn't exist before. But, the Riviera points will really be impacted. Good call on the availability, as soon as stories come out "I waited until 5 months and couldn't use my points", it will further hamper the "cause".
networkpro
Well-Known Member
- In the Parks
- Yes
These recent moves are away from a vacation club to a true time share. I'm waiting for the next shoe to drop when point rentals are only authorized through a mouse clearing house.
Two problems with that:
1) There’s no way to know whether points are being rented out or simply gifted to friends and family.
2) The right to rent out points is in the deeds, so they can’t stop renting altogether. Sure, they could maybe find some way to shut down the rental brokers, but it might be hard to achieve. I know that David’s changed their business model to be able to continue to act as brokers.
But ultimately, if Disney / DVC can’t identify a rental, how would they be able to stop it happening privately?
kong1802
Well-Known Member
This whole DVC issue had me re interested in crunching some DVC numbers....
The cheapest contract for 100 pts I could find is going for roughly $100/pp for OKW. With maint fees and quick calculations it would take about 15 years to break even on that investment, leaving roughly 5 years of "payback". I.e “free stays”
How are they selling these things at $170/pp at the resorts that need more points to book?! I know its off topic, but I wanted to take another look at the market.
Call me when they are back down to $70/pp max.... giving a break even of closer to 8 years, lol
The cheapest contract for 100 pts I could find is going for roughly $100/pp for OKW. With maint fees and quick calculations it would take about 15 years to break even on that investment, leaving roughly 5 years of "payback". I.e “free stays”
How are they selling these things at $170/pp at the resorts that need more points to book?! I know its off topic, but I wanted to take another look at the market.
Call me when they are back down to $70/pp max.... giving a break even of closer to 8 years, lol
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correcaminos
Well-Known Member
Right, the selling back thing is the one I have only rarely heard that they will allow. I should say it is an option I wouldn't count on (hence me calling it not viable). I'd never buy in and expect that to be able to happen. More often than not, I've heard them say no. Rarely they say yes and only then with a low ball. At that point, just do a resale and price it low, but higher than Disney and it should sell. I just wouldn't advise or suggest someone to try this. I literally have been told by one person they got an offer. More that were told "too bad" and good luck with selling themselves.
So to me this isn't a viable option since it's really not allowed and not one I'd count on. At least DVC has an end date which is an out for all.
A real and true foreclosure is due to other financial issues, so those who foreclose usually don't really care. It's not something I suggest to anyone to do (stop paying for their contract or MFs) There will always be those bad with finances and those who hit tough times and gave up though.
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correcaminos
Well-Known Member
Well when averaged in with my $60/point OKW the over $100/point add ons really didn't matter much. So for people like me, I didn't care. I think my average is right around $90/point total if my math is right (which it might not be). I broke even with about 4 years of usage originally (boy did I go a lot) and after a bungalow stay, I think I'm good for a while again
But for a newbie with nothing to average into? Yeah I'm with you. Especially if you finance.
GoofGoof
Premium Member
I have seen and heard the investment debate a number of times. Here’s my take. It depends on how you are defining “investment”. From an economic prospective an investment is the purchase of goods that are not used today but are used in the future to create wealth. A financial investment is something purchased today that provides either income (interest/dividends) or appreciates in value or both.
It’s not wise to assume a DVC purchase is a financial investment if you also plan to use the points for vacations. In theory you could buy points that go up in value in the short term but that’s not expected long term due to the expiration date. You could rent the points out for income. For example, if you bought 160 points at BLT 8 years ago for $90 a point or $14,400 you could probably sell them today for $140 a point or $22,400. That’s about a 6% annualized return on your investment. In addition if you also rented all those points out for an average of $9 a point over MFs without using any of them you would have earned income of $1,440 a year. That would earn you an annual return of 10% a year on top of the potential appreciation of the points. In theory as long as the point rental market continues to far exceed MFs you could ride the “investment”.
Now since most owners bought in to use their points for vacations and not to rent them out you have to look at the economic definition of investment. IF YOU WOULD HAVE GONE TO WDW ANYWAY AND STAYED AT A DELUXE RESORT then you are going to save money with DVC. Did you make a purchase today to be used in the future to create wealth? Most people have a hard time calling paying for a Disney vacation creating wealth, but if you would have spent more money anyway to do the same thing then you have actually created wealth. A better way to create financial wealth would be to skip the trip to WDW altogether and invest the money in a financial asset, but what fun is that. There’s other kinds of wealth besides financial wealth
It’s not wise to assume a DVC purchase is a financial investment if you also plan to use the points for vacations. In theory you could buy points that go up in value in the short term but that’s not expected long term due to the expiration date. You could rent the points out for income. For example, if you bought 160 points at BLT 8 years ago for $90 a point or $14,400 you could probably sell them today for $140 a point or $22,400. That’s about a 6% annualized return on your investment. In addition if you also rented all those points out for an average of $9 a point over MFs without using any of them you would have earned income of $1,440 a year. That would earn you an annual return of 10% a year on top of the potential appreciation of the points. In theory as long as the point rental market continues to far exceed MFs you could ride the “investment”.
Now since most owners bought in to use their points for vacations and not to rent them out you have to look at the economic definition of investment. IF YOU WOULD HAVE GONE TO WDW ANYWAY AND STAYED AT A DELUXE RESORT then you are going to save money with DVC. Did you make a purchase today to be used in the future to create wealth? Most people have a hard time calling paying for a Disney vacation creating wealth, but if you would have spent more money anyway to do the same thing then you have actually created wealth. A better way to create financial wealth would be to skip the trip to WDW altogether and invest the money in a financial asset, but what fun is that. There’s other kinds of wealth besides financial wealth
GoofGoof
Premium Member
I saw the original post on DVC News but I’m having a hard time believing it. This takes away one of the biggest direct from Disney selling features for new owners...the resale market. Resale prices for Riviera would be much lower without the flexibility of trading in so now a prospective buyer can’t be told that if they need to get out and sell their points they won’t get hurt too bad Iike you do with a lot of traditional timeshares. If that’s true it’s foolish and will make it much harder for them to sell direct points. It also makes the legacy 14 resorts worth even more resale since they will be the only resale ones that allow trading in.
correcaminos
Well-Known Member
I've been reading the POS a lot lately. It blatantly says this is not an investment. I think if it is in the POS that goes with the contract I signed, that's a wise thing to follow. That's all I'll have to say about investing (though totally respect other thoughts and definitions so to speak of what investing is).
lawdogNOLA
Active Member
I think the moral of this story is simple: Never come up with new strategies for DVC while at the company New Year's Eve Party.
I find it very hard to believe this stays as is. It's going to be a nightmare to try and sell Riviera with this knowledge out there. I think they change this, and knowing Disney, it'll be in a way that's not going to be good for the resale market.
I find it very hard to believe this stays as is. It's going to be a nightmare to try and sell Riviera with this knowledge out there. I think they change this, and knowing Disney, it'll be in a way that's not going to be good for the resale market.
MickeyMinnieMom
Well-Known Member
To the above two points, just spoke with our DVC rep and was told this:
Current prices, increasing 1/16/19 to…
VCF: 220 to 245
BLT: 191 to 225
Copper creek: 182 to 188
SSR: 152 to 160
The impression I got (just an impression!!) was that Riviera would be closer to BLT in point cost... I'd guess btwn copper creek and BLT, but who knows...
Who knows what will happen with this most recent change, but we purchased SSR direct from DVC 13 years ago for $93/pt and current average resale is about $105. So doesn't quite keep up with inflation, but we've used the heck out of it over these years and have most certainly gotten our money's worth and then some. The main thing I retained from a brief stint working in timeshare years ago (not Disney) is that it's a good move if you're actually going to use it primarily where you've purchased. Then there can be a good deal of savings over the years. But it's not an investment in the traditional sense, IMO.
kong1802
Well-Known Member
Yeah those who bought at or below 100 5-10 years ago were really the last who are gonna see that true value with any resell ramifications. I mean there’s no timeshare contract in the world where that’s true. I just don’t think anyone buying north of 150 will see that scenario play out. It will be use or lose.
Phonedave
Well-Known Member
In practice, yes. If you did not want your DVC time share, I am sure you could put it on the market for say $1, it would enter ROFR, and DVC would take it. However there is nothing saying that HAS to happen. DVC does not HAVE to take back your time share, nor does anybody HAVE to buy it. This happens all to often with other time shares. You find time shares where the developer still has a large inventory to sell, and they do not want your portion back, even for free (because then they would be responsible for the maintenance costs) and the resale market is non-existent. Do some googling around and you will find people offering their timeshares for free. You will also find a number of law firms doing a bang up business getting people out of timeshares that they are stuck with.
Bill in Atlanta
Well-Known Member
Just curious... does anything change for people who rent points thru sites like dvcrequest.com?
Only in so far as some owners will be unable to accept a rental because they will not have the ability to book certain resorts.