Now is the BEST time to buy DVC

I have been a DVC owner since 2001 and have a love-hate relationship with it.

I love DVC for my own family use and it is the BEST way to experience DisneyWorld. I beleive it is one of the BEST run point based TS available.

I hate DVC as it is expensive to buy, has high MF, and in not good for trading for any property other than DVC. What I mean by that is that - it is a good trader, but it is an expensive way to use II as compared to Marriott, WM, etc.

Two weeks ago, I added-on 150 more points to my already 500 point contract. This is something I would have not believed I would do a few months ago. In fact, I was considering selling some of my points after I got banned from DISboards for starting threads on trying to get members to raise their rental rates.

However, there is a LIMITED DVC opportunity that is the BEST I have seen in many years and that is why I decided to buy more DVC points.

The DVC Saratoga Springs Resort and Spa, price per point, a few months ago was $101 per point.

They have a friends and family special for current DVC owners and firends of owners (hint-hint) that offers a $15 pp discount. Thus the price is $86pp. That is a good deal, but is the same price as buying resale from The Timeshare Store.

However, here is the kicker....DVC threw in all the 2006 point year useage for only paying one month MF (December). Thus, the normal 2006 MF cost of $3.98 per point would only cost me $0.33 per point.

They were able to close me within 3 days and at no extra cost and put the entire purchase on my AmEx card (12,950 Delta points thank you).

I was then able to rent my 150 points for $10pp thus netting me a $1450 profit off the points I just got added to my account.

So in summary: the cost per DVC point was $86 - $9.67 (profit from rental - MF) = $76.33pp

Buying DVC directly from Disney for $76 per point is a fantastic and unbelievable deal. This is the BEST price I have seen in years. I assume that this deal will expire on December 29th, so if you are interested, send me a PM and I will give you my cast member contact at DVC.

Also note that DVC just announced a new property at the Animal Kingdom Lodge that will be build very soon. I know many people want to add on here, but the price will be $101-110pp (non-confirmed...just MHO). You can always trade into AKL with your SSR points. The only difference is that you will be paying about $25pp LESS for your DVC contract.

Once DVC points cost MORE than $100pp and the MF is over $5.00pp, I think most people are better renting than buying. However, buying DVC at $76 pp directly from Disney is the only "Sure thing" in the world....you WILL make money on a resale and you can immediatly make money renting points. No other TS developer can make this claim.

Now If I can only get my DISboard "Steamboat Willie" account back...that would be magical!

I agree with your basic premise, but I disagree that it's the "best" time to buy. -- That is relative.
I am personally waiting for AKV to go on sale before purchasing another contract.
While you may be able to use your SSR points at AKV, you may not be able to do so when the resort is new & small, or if you opt for the concierge room, or a grand villa.

Not a big deal for most people, but you should also keep in mind the AKV contracts will have a few additional years.

I have tossed around the idea of Disney points. I am one of the biggest nuts for Disney out there, so you would think Disney points would be in my repertoire of timeshares that you see to the left of this post. We own lots of weeks, but we exchange into Disney and Disney exchanges are always Sat-Sat. I wanted to add a five-night stay onto the week to extend our trips to 12 days instead of one week. That would mean using double points for that Saturday night stay, so I cannot see doing it. If the exchange weeks were Sun-Sun or even Fri-Fri, I would jump on the chance you just offered. Too bad, so sad.

Carl D said:

I agree with your basic premise, but I disagree that it's the "best" time to buy. -- That is relative.
I am personally waiting for AKV to go on sale before purchasing another contract.
While you may be able to use your SSR points at AKV, you may not be able to do so when the resort is new & small, or if you opt for the concierge room, or a grand villa.

Not a big deal for most people, but you should also keep in mind the AKV contracts will have a few additional years.

Click to expand...

I wonder what the expiration date will be for this new resort?

Also, another question on my mind, what were the benefits for tickets with Disney Vacation Club?

rickandcindy23 said:

I wonder what the expiration date will be for this new resort?

Also, another question on my mind, what were the benefits for tickets with Disney Vacation Club?

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The word on the street is a fresh 50 years, making the expiration 2057.

DVC Members recieve approximately a $100 discount on each annual pass for the household.
The exact amount varies depending on renewal staus, premium passes, and so forth.

A HUGE benefit for annual pass holders is the Disney Dinning Experience. This costs $60, but gets you 20% off most restaurants including alcohol.
If you go as often as us, and your dinning habits are like us, this alone pays for the annual passes.
The DDE is only available to AP holders and Florida residents.

Bill,

Your taking of advantage of and offering this advantage to others to buy DVC points seems to be a good deal.

It looks like you have set yourself up to make good use and some $ off of this to support your TS habit.

I think we may be at a crossroads for DVC. There are 3 macro economic developments that could have an impact on the resale price of DVC points.

1) The timeshare resale market has had a greater than normal decline this fall. There are other threads on TUG discussing this in a bit more detail. So far, timeshares with strong resale markets such as WorldMark and DVC have held fairly steady, but the drop off could be signaling a greater issue for timeshares if there isn't a significant rebound in the Spring of 2007.

I believe the relevant macro level trend is the cooling off of the general real estate market. For the longest time, I believed that the timeshare markets and the real estate markets operated on unrelated cycles (i.e. the timeshare market on the general economy and the residential real estate market on interest rates and demographic shifts). Now, I believe there may be some spillover effect between the two.

Timeshare resales are related to the market for Timeshare primary sales since the more the resort developer educates consumers via tours, the greater the knowledge there is about timesharing in general. That helps to prop up the demand for resales. If resort developers start having trouble selling timeshares in 2007, then this could be very negative on the resale market. Time will tell.

2) Rental rates in Orlando are starting to fall. That's in part due to over capacity of hotel space in Orlando AND an over supply of timeshares in that market. If there is any general slow down in the economy, it may be very difficult for DVC to hold its high prices from both a rental and a resale point of view.

3) The tremendous timeshare building and condo hotel developments in Orlando. Will DVC continue to be able to hold its value as other alternatives start dropping? It's kind of like the Dow Industrials and how it was impacted when the NASDAQ crashed. There was a general aversion to anything stock market related in 2001 even for good companies.

I do believe that DVC has commanded far too high a premium on a relative scale to its peers in Orlando. If there is a correction in the timeshare market, DVC owners could be impacted. I am not saying it will happen for sure. But, the higher rise, the greater they fall.

And lastly, there will be a time in the next 20 years when DVC points start falling in value. Don't know when that will happen, but it will and when it does happen, it will happen fast. I surely don't want to be on that bandwagon when the wheels fall off.

Bill,

Thanks for an informative heads up. I'm not very DVC saavy, so I had two questions: 1) Does the 150 point minimum purchase still apply? 2) How did you rent this year's points? Through Disney or privately? Do you have to rent them before Jan. 1 or you lose them?

Thanks!

Jim

I don't think DVC is more expensive than any of the other big developers in the area and the value is always up with DVC, as opposed to down. Go buy a week at River Island with the corresponding points and see what you pay for a two bedroom. It is going to lose value quickly for sure (probably 80% in the first year) and those points would not transfer when you choose to sell. That sounds crazy to me, selling a timeshare just purchased, but you can bet that a year from now, some poor slob will be selling their River Island week for peanuts somewhere.

HGVC and Marriott are very overpriced for the area and especially compared to resales. How easy it is to trade into both. I just looked with my blue week at summer of 2007 and pulled a three bedroom at HGVC Seaworld. My blue week is a two bedroom.

Getting a DVC trade is so much harder. I think the value is there and will remain. I may be talking Rick into a purchase, though I wish we didn't have to pay higher point values for those Fri and Sat stays to combine the week with an exchange.

I always say not to buy Orlando, no matter what, but the simple fact of the matter is that buying Disney does not feel like buying Orlando.

BILL: Are taxes included in the MF's, or are they separate?

BocaBum99 said:

I think we may be at a crossroads for DVC. There are 3 macro economic developments that could have an impact on the resale price of DVC points.

1) The timeshare resale market has had a greater than normal decline this fall. There are other threads on TUG discussing this in a bit more detail. So far, timeshares with strong resale markets such as WorldMark and DVC have held fairly steady, but the drop off could be signaling a greater issue for timeshares if there isn't a significant rebound in the Spring of 2007.

I believe the relevant macro level trend is the cooling off of the general real estate market. For the longest time, I believed that the timeshare markets and the real estate markets operated on unrelated cycles (i.e. the timeshare market on the general economy and the residential real estate market on interest rates and demographic shifts). Now, I believe there may be some spillover effect between the two.

Timeshare resales are related to the market for Timeshare primary sales since the more the resort developer educates consumers via tours, the greater the knowledge there is about timesharing in general. That helps to prop up the demand for resales. If resort developers start having trouble selling timeshares in 2007, then this could be very negative on the resale market. Time will tell.

2) Rental rates in Orlando are starting to fall. That's in part due to over capacity of hotel space in Orlando AND an over supply of timeshares in that market. If there is any general slow down in the economy, it may be very difficult for DVC to hold its high prices from both a rental and a resale point of view.

3) The tremendous timeshare building and condo hotel developments in Orlando. Will DVC continue to be able to hold its value as other alternatives start dropping? It's kind of like the Dow Industrials and how it was impacted when the NASDAQ crashed. There was a general aversion to anything stock market related in 2001 even for good companies.

I do believe that DVC has commanded far too high a premium on a relative scale to its peers in Orlando. If there is a correction in the timeshare market, DVC owners could be impacted. I am not saying it will happen for sure. But, the higher rise, the greater they fall.

And lastly, there will be a time in the next 20 years when DVC points start falling in value. Don't know when that will happen, but it will and when it does happen, it will happen fast. I surely don't want to be on that bandwagon when the wheels fall off.

Click to expand...

Boca, you're forgetting one huge driving force for DVC---> the price of the WDW hotel resorts.
As long as there is a market that will nearly fill the WDW on site resorts, there will be a market willing to pay a little less at DVC. That "little less" is still a big number. Plain and simple, the price of the WDW resorts will continue to drive the price of DVC. Perhaps even more so than right of first refusal.
When Disney is filling the Beach Club hotel at $400 per night, it doesn't make sense the associated villas will sell for $100 per night.

Carl D said:

Boca, you're forgetting one huge driving force for DVC---> the price of the WDW hotel resorts.
As long as there is a market that will nearly fill the WDW on site resorts, there will be a market willing to pay a little less at DVC. That "little less" is still a big number. Plain and simple, the price of the WDW resorts will continue to drive the price of DVC. Perhaps even more so than right of first refusal.
When Disney is filling the Beach Club hotel at $400 per night, it doesn't make sense the associated villas will sell for $100 per night.

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I'm not forgetting that. I agree with your logic. My point is that if Disney can't hold those prices, then it will impact DVC rental and resales.
There will be some bleedover effect no matter how popular Disney stays. The greater the over capacity problem gets in Orlando, the greater the potential divergence in rental rates, the greater the bleedover effect will become. That's my point.

And, DVC points at most resorts will have ZERO value in 2043. Sometime between now and 2043 the resale prices need to go down dramatically. The question is not if, but when.

Disney has done a masterful job at convincing people that their on-site resorts have value, though. Viewed entirely on a fee-for-service basis, those perks don't justify the premium. For example, I can get access to extra magic hours by renting a campsite in addition to any offsite lodging I get. I can also contract with a towncar company to shuttle me back and forth from my offsite location. I can pay to ship my packages all the way home rather than to my hotel. Add all this up, and I'd STILL spend less out of pocket than I would on a comparable onsite rental.

But, those resorts are still full, and a good chunk of the rooms are sold at rack rate, rather than at a discount.

9/11 demonstrated that even the Mouse isn't immune to travel slumps---they were selling rooms almost at half price for a while there---but it is darn close.

bnoble said:

Disney has done a masterful job at convincing people that their on-site resorts have value, though. Viewed entirely on a fee-for-service basis, those perks don't justify the premium. For example, I can get access to extra magic hours by renting a campsite in addition to any offsite lodging I get. I can also contract with a towncar company to shuttle me back and forth from my offsite location. I can pay to ship my packages all the way home rather than to my hotel. Add all this up, and I'd STILL spend less out of pocket than I would on a comparable onsite rental.

Click to expand...

True, if you look at "value" from only a financial viewpoint.
For our family, we just can't put a price on the great memories we have of staying in the middle of Magic.
For us, THAT'S value!

BocaBum99 said:

And, DVC points at most resorts will have ZERO value in 2043. Sometime between now and 2043 the resale prices need to go down dramatically. The question is not if, but when.

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First half of your statement- Correct, but by that time we have gotten our money's worth (IMO).

Second half- Not as quick or dramtic as you might think. Just think what the rack rates at Boardwalk will be in 2035.
That will help boost DVC prices.

Disney has done a masterful job at convincing people that their on-site resorts have value, though. Viewed entirely on a fee-for-service basis, those perks don't justify the premium.

Click to expand...

I don't own DVC, but we've traded in 2x in the last 2 years and I've gotta disagree that the perks don't justify the premium.

Staying in the park, at a huge 2BR OKW unit, is an entirely different experience than staying outside the park at, say, Marriott Grand Vista. The ease of transit, the castmember's attitudes, the extra magic hours, the dining plan (which we found a tremendous value), it all adds up to one of the best vacation experiences around, especially if you have children.

The one thing that would make me hesitate about purchasing is my belief that if you're a diligent II exchanger and a little flexible with your plans, you can trade in for a fraction of the price.

If you want a 2BR in a good season, though, that ain't easy. Possible, but not easy.

I hear you Carl, but I've stayed offsite and onsite, and the memories last about the same either way.

Like I said; they are masterful marketers, if nothing else. And I still succumb to it from time to time, even though I *know* better.

Disney commands a huge premium today and it is worth it because people are willing to pay for it. That's a fact and I am not arguing with the market.

My asssessment is not about the past, it's about the likely future. I believe I am more right than wrong. I have provided 3 macro economic events that I believe could effect the future prices of DVC points.

In 2035, DVC points will be far lower in value than they are today in inflation adjusted terms. I am quite sure of that. There is no way for us to prove it now. But I am firm in my conviction about this assertion.

Claiming that you've already got your money back is a red herring argument. There are a lot of assets in which you can get your money back. In timesharing by itself, there are dozens of alternatives that have a far superior return than DVC points. If DVC had a superior return, I would own thousands of points. I don't own any. What is important from a financial return point of view is the relative return given the risk.

DVC is a great purchase if you've got to have it and you want a luxury item. As a financial investment, it is weak at best.

Getting back to the original claim about now being a great time to buy DVC. I think a better time to buy will be when DVC tanks due to some shock to the economy. I'll bet the value is far greater at that time than now. To me, DVC is providing incentives to purchase because they are having trouble making their numbers without the incentives. If they weren't having trouble, they wouldn't be providing them.

We recently sold some DVC points - one package sold for $93 a point and the other for $86 a point. I thought that was really good. In my opinion, the driving force on price on DVC points is the Disney hotel rates. Deluxe Disney hotel rates are up there (Yacht/Beach Club standard rooms are around $400 a night).

We've downsized our DVC points to just a little over 200 points. But I plan on using those points to make sure we (kids or us) can stay in a studio at Disney when we're going to the parks and when we WANT to go (not IF something pops up for trade). I plan to ride it out until the end with those points. Keeping those points is still better than paying almost $150 a night for a moderate or the outrageous deluxe hotel rates. By using those points Sunday through Thursday, we can get a lot of mileage out of them. Is it extravagant? Yep, it sure is. But, we love the Disney resort hotels. My husband and I both agreed that we've worked too long and too hard not to have the splurge of those DVC points.

When we want to stay in bigger units and not do the Disney parks, our plan is to stay at Marriott's Cypress Harbour, Horizons, or Vistana Villages for the most part (I do want to try Cypress Pointe soon, too, as an option). We can either get those with a cash Getaway or trade in with our lock-off units or AC's through Interval.

The only reason why I own DVC points is to stay on Disney property when we visit the parks. Even if I manage to trade in to DVC through Interval, it's so great to be able to pick up the phone and call DVC and book, say a studio at the same resort, for five nights for one of our kids or nieces or nephews. You can't call up Interval and do that when you have more people that want to go on the trip. The best value for us with the DVC points are the studios Sunday through Thursday. I think we'll use 20 nights of studios with our points next year. If I booked those 20 nights in Disney deluxe hotels on cash, it would probably cost me around $6,000. I know I could rent somebody else's points, but I don't want to fool with it. I want to pick up the phone and get what I want when I want it.

BocaBum99 said:

In 2035, DVC points will be far lower in value than they are today in inflation adjusted terms. I am quite sure of that. There is no way for us to prove it now. But I am firm in my conviction about this assertion.

In timesharing by itself, there are dozens of alternatives that have a far superior return than DVC points. If DVC had a superior return, I would own thousands of points. I don't own any. What is important from a financial return point of view is the relative return given the risk.

DVC is a great purchase if you've got to have it and you want a luxury item. As a financial investment, it is weak at best.

Getting back to the original claim about now being a great time to buy DVC. I think a better time to buy will be when DVC tanks due to some shock to the economy. I'll bet the value is far greater at that time than now. To me, DVC is providing incentives to purchase because they are having trouble making their numbers without the incentives. If they weren't having trouble, they wouldn't be providing them.

Click to expand...

Worth less in 2035 once adjusted for inflation- Agreed.

Bad FINANCIAL investment- Agreed again, but I didn't buy it for that reason.

DVC tanks?- It may get somewhat slower, but I doubt "tank" will be the applicable descriptor.

Trouble making their numbers?- No, sales are very brisk. That is why more DVC resorts are slated to come on line. Most notably, Animal Kingdom Villas. AKV is also slated to be a large resort. There are rumors of two more, with one being at the Grand Californian in Disneyland. That one seems very likely to happen.

Carl D said:

Trouble making their numbers?- No, sales are very brisk. That is why more DVC resorts are slated to come on line. Most notably, Animal Kingdom Villas. AKV is also slated to be a large resort. There are rumors of two more, with one being at the Grand Californian in Disneyland. That one seems very likely to happen.

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Explain the incentive then. Disney is not well known as a generous company. It NEVER leaves money on the table. Disney is legendary on this front.

It's kind of like the point in "A Few Good Men" where Tom Cruise asks Jack Nicholsen why the "two orders".

If there is no need for an incentive, why the incentive?

If things are going so swimmingly, we not just increase the prices more?

BocaBum99 said:

Explain the incentive then. Disney is not well known as a generous company. It NEVER leaves money on the table. Disney is legendary on this front.

It's kind of like the point in "A Few Good Men" where Tom Cruise asks Jack Nicholsen why the "two orders".

If there is no need for an incentive, why the incentive?

If things are going so swimmingly, we not just increase the prices more?

Click to expand...

I think part of the reason for incentives at Saratoga is the location. It doesn't command as much of a premium as Boardwalk, Beach Club, or the Wilderness Lodge does. Those resorts have deluxe hotels attached to them, plus they are close to the theme parks. There's a long waiting list for Beach Club points through Disney. If you try to add on direct through Disney for those three, there are no incentives offered for them and they sell for $95.00 a point direct through Disney. You can actually buy Saratoga cheaper with the incentives. I guess it's the old location, location, location coming into play.

I'm just going to add that last year at this time, SSR price was $81.50 per point with the 15% off retail, and the purchase also came with the previous year's points for little or no cost. And, there were no closing fees for new members.

So I would say that last year's deal was even better than this year's. New members now pay minimal closing costs (max $200, I think).

But the current promotion is great for today's prices!

BocaBum99 said:

Explain the incentive then. Disney is not well known as a generous company. It NEVER leaves money on the table. Disney is legendary on this front.

Click to expand...

As strange as it sounds, DVC usually has some type of incentive. The exact details vary from time to time, but it always translates to a money saver.
When I purchased years ago it was called "Magical Beginnings", and DVC paid the first $10/pt toward your down payment.
At the beginning of DVC there was some sort of free park pass incentive.
Again, same story different title.

Wow…23 replies within 7 hours…this is a HOT topic!

Let me clarify my position and reply to a few posters.

First, I think DVC offers families the BEST vacation experience if you want to visit Walt Disney World. I have visited WDW in Orlando dozens of times and with two young children and a Florida resident season pass, we all love it here. There is so much to do in WDW and everything is so clean, no wonder it is the #1 tourist destination in the world. I am a big fan of staying on-site at Disney World.

Second, I never encourage people to buy DVC to make money. DVC is not like some of the other TS properties where "smart people" can easily make a living. DVC frowns on commercial renters and is starting to crack down on them.

Third, DVC is pretty expensive as compared to all TS, and extremely expensive as compared to Orlando TS properties. Sure, you can buy a cheap no-name Orlando TS for $500…but it will not be on-site. To families like me….we are willing to pay a premium to stay within WDW property. I equate DVC to a "ski-in/ski-out" TS property. Why do people pay 2-4x the rates to stay at a TS/hotel/condo that is ski-in/ski-out rather than staying at a cheaper property and take a shuttle bus or walk to the slopes?

To: Carl D - Why would you pay 25% MORE for AKL than SSR. This does not make much sense to me, but it is your cash. Besides AKL will be a HUGE property…almost as big as SSR. We can both agree that DDE is a fantastic deal for pass holders. I saved a ton of money when I had dinner with friends at Victoria & Alberts. I also agree with you that the hotel prices at WDW seem to defy the laws of gravity. Buying a DVC is like hedging your future WDW hotel prices.

To: rickandcindy23 - If you are able to trade into DVC for cheap during flex or some other method, then keep it up. My family requires a confirmed reservation 4-6 months before we travel. Taxes are included in the price. If you are really serious about DVC, I would encourage you to buy before Dec 29th as this is the BEST deal I have seen in years.

DVC has had a very steady increase in price since 1991. You can go to DISboard to see the trend charts. DVC is also hard to trade into during school vacations. Most II trades into DVC are for the off season or slow periods. This does not work if you have kids in school.

To BocaBum99 - I always respect your input as one of the most knowledgeable TS owners I have ever met. Regarding DVC, the resale market is pretty strong and prices are high. Since 2000, most DVC resale properties sell for about 85-90% the current DVC price. This is an amazingly high resale price. I am not sure if overbuilding Orlando is a factor or not as staying within WDW property is not overdeveloped and prices for hotel stays are climbing thru the roof. Let's not forget how expensive simply paying the tax on a room at WDW…ouch. My mother reminds me that in 1971, they thought paying $25 per night to stay at the Contemporary hotel was a rip-off. I agree that prices will have to fall for older properties like OKW as their 40 year right to use approaches (year 2042). However the SSR is on a new clock that expires in 2054. All this is a moot issue as most owners keep their TS for 10 years or less. I will probably not be here in 2054 to worry about it. I think the reason for this sale is to sell-out SSR and concentrate on the new AKL and new prices. Remember that SSR is a HUGE resort and is not in as nice a location as VWL, BWV, BCV. I 100% agree with you that DVC is not the BEST investment, I am only posting that, IMHO from now until December 29, 2006, this is the BEST DVC purchase plan I have ever seen. I doubt DVC will ever tank, but if you buy now and sell in 5 years, I am sure you will be happy with the results. I am recommending this as a vacation club for families that LOVE Disney, not for any investor out there.

To: ondeadlin - DVC owners can add 115 pts, new owners need 150. I rented my points online. The points are usually good for one year. I sense you are thinking of buying…am I correct?

To: Bnobel - Perhaps it is something in the water up there, but average people save all year just to vacation in WDW and want to stay on site. I think 99.99% of vacationers to WDW will NOT use the saving methods you describe. Some people actually pack lunch and drinks to save on the food expenses. As I said before, DVC (or WDW for that matter) is not cheap and the $10 refillable daily soda mugs are beginning to piss me off….for that price, I could get ten 2 liter bottles.

To: littlestar - You really know how to work the DVC system to squeeze 20 nights per year on 200 points. You stated you SOLD some points for $93 and $86pp and that is great news. I am posting how you can effectively buy direct from DVC for $76pp….this is a GREAT opportunity. Your analogy regarding location and price is correct.

Steamboat Bill said:

To: littlestar - You really know how to work the DVC system to squeeze 20 nights per year on 200 points. You stated you SOLD some points for $93 and $86pp and that is great news. I am posting how you can effectively buy direct from DVC for $76pp….this is a GREAT opportunity. Your analogy regarding location and price is correct.

Click to expand...

Actually, I'll have about 40 points left over. Here's the breakdown/plan for Sunday through Thursday stays (we've got kids and nieces and nephews going in October for food and wine and Mickey's Not So Scary Halloween Party):

October (5) nights - BWV = 45 points
October (5) nights - OKW = 40 points
October (5) nights - OKW = 40 points
January (5) nights - OKW = 40 points

Total 165 points