# DVC is a Seller's Dream



## capjak

I have been contacting DVC resales and watching regularly for my use year and any with banked or current year points seem to sale within a day, if it is a small contract less than 100 points  it is pending sale within hours.

I have never seen the resale market like this, just 12 months earlier the same properties were going for 20% less per point.

Anyone else looking to buy?


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## timeos2

Hang in there. As the remaining use years decline so will the prices. Plus this is the wrong time of year to buy. Try late 2013 or early 2014. 

Proudly Microsoft / Apple free with Droid Bionic & Tapatalk


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## MichaelColey

I think most of them will put you on a waiting list and call you when they get a listing that matches what you're looking for.

Me, I'm a computer nerd so I set up a script to check their site every 15 minutes and text me when a match showed up.  It took about a month or two, but I got exactly what I wanted at an unbeatable price.


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## stoler527

*Prices up!!*

We noticed that the prices seem to be climbing. I hope that they go down later in the year when we will be looking for more points. Is it possible to ever have enough?

We are not sure if we want more points at SSR or if we want to branch out to AKV. I like the idea of an extra bathroom, but since the animal kingdom park is my least favorite park, I wonder if we will enjoy it as much as OKW and SSR.
It has been booked solid when we have tried to reserve a night or two there.
The small number of points required for the value rooms is also appealing.

Is there an advantage or disadvantage to spreading your points around versus having them all at one resort?


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## fluke

I have been in the market as well and prices have surged this year. I think everything was skewed by the dvc price hike earlier this year and  the false rumors about additional resale restrictions.  This lead to a frenzy of buying both directly from DVC and on the resale market.  The direct increases caused an uptick in Rofr which lead to increased prices.  But if you look at rofr threads ( on dis board) the AKV and  SSR ROFR has not really changed.  Some other properties have increased. But the perception has caused an uptick across the board.  I think the brokers have been heavily exploiting the fear of ROFR and pushing prices up.


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## fluke

Crafty527 said:


> Is there an advantage or disadvantage to spreading your points around versus having them all at one resort?



If you like the idea of split stays (at different resorts) and you want to utilize the 11 month advantage for competitive rooms(at AKV that would be value rooms and concierge rooms) then it would be an advantage.  Realizing of course the advantage would be restricted to your new points only. MFs for AKV are significantly more.


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## fluke

timeos2 said:


> Hang in there. As the remaining use years decline so will the prices. Plus this is the wrong time of year to buy. Try late 2013 or early 2014.
> 
> Proudly Microsoft / Apple free with Droid Bionic & Tapatalk



One would think so with the 2042 date getting closer and closer , but that is not reality.  Prices have surged which seems to have sparked increased sales with decreased inventory(contradictory to typical supply and demand). This can only be temporary as I think things will stabilize and prices will drop as inventory begins to accumulate.

I agree late 2013 and early 2014 are likely better times to buy.


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## MichaelColey

Crafty527 said:


> We are not sure if we want more points at SSR or if we want to branch out to AKV. I like the idea of an extra bathroom, but since the animal kingdom park is my least favorite park, I wonder if we will enjoy it as much as OKW and SSR.
> It has been booked solid when we have tried to reserve a night or two there.
> The small number of points required for the value rooms is also appealing.


Are you booking (or trying to book) less than 7 months out?  If so, it really doesn't matter where you own.  At that point, points are points, and if there's no availability, there's no availability for anyone.

The week we stayed (in a Savanna view) at AKV, I think we only went to AK once.  We LOVED sitting out on the balcony, watching the animals.


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## stoler527

*Animal Kimgdom Villas*

We have been booking inside the 7 month window because we just bought the points recently. We knew we were going in August, but the points took longer to close than we had anticipated.

I think that we would like the atmosphere of AKV despite not liking the park. I read that Disney was not using ROFR so much at AKV because they still had points to sell there. A lower offer might get through. We won't be buying until later in the year, anyway. So on our trip in August we will trek over to AKV and look around.

Yes, the broker we used kept trying to increase our offer, using the ROFR threat.


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## littlestar

Prices have definitely up ticked in the last 6 months.  Time will tell if it's a temporary trend.  As a side, we sold a single family house (to settle an estate) that had been on the market for 3 years - I think the economy is moving a little better in 2013.  Don't know if it's pent up demand or what?  I guess time will tell.


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## lizap

Seriously considered a Disney resale.  Problem is compared to Westin or Hyatt, you simply can't justify the price.  A Disney 2 BR (enough points) resale costs roughly the same as a platinum 2 BR Westin at a mandatory property.  With Disney, I can take one trip to Disney every 2 years.  The same equivalent with Starwood will allow me to stay at a Starwood property (using internal exchanging) at least several times a year.  Plus Disney TSs expire, while Starwood is deeded and can be willed to an heir.  No way to justify the price.  You do it because you really want to own part of Disney and stay at Disney.


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## ptlohmysoul

capjak said:


> I have been contacting DVC resales and watching regularly for my use year and any with banked or current year points seem to sale within a day, if it is a small contract less than 100 points  it is pending sale within hours.
> 
> I have never seen the resale market like this, just 12 months earlier the same properties were going for 20% less per point.
> 
> Anyone else looking to buy?



I've been researching timeshares and watching the dvc market since about April.  The prices jumped before we decided we'd like to buy.  The market prices are currently too high for us to justify buying rather than renting or exchanging.


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## lizap

I'm not sure you will ever be able to logically justify a DVC resale purchase.  It's just something you do.





ptlohmysoul said:


> I've been researching timeshares and watching the dvc market since about April.  The prices jumped before we decided we'd like to buy.  The market prices are currently too high for us to justify buying rather than renting or exchanging.


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## simpsontruckdriver

Several months ago (posted elsewhere here), my wife and I went on a tour. The sales office is at SSR, but they were actively selling AKV. We only looked at models (I guess they're now selling Grand Floridian). But, when compared to Wyndham, the prices are steep. So, basically, I had a hard time of getting the "Tinkerbell Pixie Dust" out of my eyes!

When talking about DVC, technically, I would call it a "lease". You take over a batch of points, keep it until 2049 (or so), and then the deed is handed back to DVC to lease out for another few decades. Just like http://www.swapalease.com where you buy car leases that end at a certain point.

TS


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## Myxdvz

I don't think you can compare it with any existing TS except maybe Wyndham or HGVC.  But even when I do, I like DVC better

Is it expensive?  Yes.  So, it's definitely not for everyone.  But here's what I like about it.

* No reservation fees
* No banking/borrowing fees
* No housekeeping fees
* No guest certificate fees
* I can book 1 night if I want.  It doesn't have to be a Friday, Saturday or Sunday
* I can fit my family of 5 in a 1 BR -- legally
* Magical Express
* PAP/AP Discount
* Tables in Wonderland Card
* ToTWL access
* Very good resale value.  If you bought in early enough.  you could sell it now and probably recoup your initial purchase price.  If you bought resale, you might have even made a profit.  Not saying it will continue to be so.  But it's definitely not going to be in any bargain bin anytime soon.

I actually like that I don't own it forever.  No saddling my family with MFs that they may not want.

For going to WDW (and DVC), it's just the best TS to have.  IMO, YMMV and all that jazz.

Can you get a DVC reservation via RCI if you're on top of your OGS?  Sure!  If you want it guaranteed -- only way is to rent or own.

I do think the direct prices are crazy high right now.  Which then fueled the increase in resale prices as well.  But if one is patient, and not in a hurry -- when prices settle down, it could still be a good buy.


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## lizap

I do think the fact that DVC remains value well is a big deal.  I don't think DVC compares well to Wyndham in terms of quality..




Myxdvz said:


> I don't think you can compare it with any existing TS except maybe Wyndham or HGVC.  But even when I do, I like DVC better
> 
> Is it expensive?  Yes.  So, it's definitely not for everyone.  But here's what I like about it.
> 
> * No reservation fees
> * No banking/borrowing fees
> * No housekeeping fees
> * No guest certificate fees
> * I can book 1 night if I want.  It doesn't have to be a Friday, Saturday or Sunday
> * I can fit my family of 5 in a 1 BR -- legally
> * Magical Express
> * PAP/AP Discount
> * Tables in Wonderland Card
> * ToTWL access
> * Very good resale value.  If you bought in early enough.  you could sell it now and probably recoup your initial purchase price.  If you bought resale, you might have even made a profit.  Not saying it will continue to be so.  But it's definitely not going to be in any bargain bin anytime soon.
> 
> I actually like that I don't own it forever.  No saddling my family with MFs that they may not want.
> 
> For going to WDW (and DVC), it's just the best TS to have.  IMO, YMMV and all that jazz.
> 
> Can you get a DVC reservation via RCI if you're on top of your OGS?  Sure!  If you want it guaranteed -- only way is to rent or own.
> 
> I do think the direct prices are crazy high right now.  Which then fueled the increase in resale prices as well.  But if one is patient, and not in a hurry -- when prices settle down, it could still be a good buy.


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## fluke

Crafty527 said:


> Yes, the broker we used kept trying to increase our offer, using the ROFR threat.



That is the problem in my opinion.  Particularly looking at AKV and SSR.  Also almost everyone sells DVC through a broker so they have alot of impact on the sales.  Again I suggest reviewing the recent ROFR threads on Dis.

There are ROFR waivers in the low 50's pp for SSR.


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## Myxdvz

Crafty527 said:


> Yes, the broker we used kept trying to increase our offer, using the ROFR threat.



IMO, put an offer you're comfortable with and stick with it.  Be patient.  

There is no rhyme or reason with the ROFRs.  Some that are low go thru, some that are higher are taken.


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## chriskre

lizap said:


> I'm not sure you will ever be able to logically justify a DVC resale purchase.  It's just something you do.



And it's definitely not for everyone.
You really have to love the Mouse House or why bother.

I just blew two years worth of points on a Grand Floridian (GF) stay for Feb.
Why?  Because I wanted to.
Does it make sense to do that?  
Probably not but I'm Mouse crazy. 

The best part was that I used my SSR points for a GF stay.
I was going to do an add on but have decided to hold off and see if I really want to own at GF first or hold out for Poly which I believe is next on the DVC radar.


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## Myxdvz

chriskre said:


> The best part was that I used my SSR points for a GF stay.
> I was going to do an add on but have decided to hold off and see if I really want to own at GF first or hold out for Poly which I believe is next on the DVC radar.



Can't quite get myself to spend my points at VGF yet!  I am definitely holding out for the Poly.  The time we were at GF for our 1900 Park Fare dining, I felt too out of place at the lobby -- like I (we) didn't belong there


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## chriskre

Myxdvz said:


> Can't quite get myself to spend my points at VGF yet!  I am definitely holding out for the Poly.  The time we were at GF for our 1900 Park Fare dining, I felt too out of place at the lobby -- like I (we) didn't belong there



Well I can understand as I used two years worth of points for this stay.
I guess next year I'll have to do an RCI exchange or there will be no Mouse visits for two years and we can't have that.


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## lizap

Yeah, I'm waiting for a Poly resale too.  Should be ready to purchase by then. 




Myxdvz said:


> Can't quite get myself to spend my points at VGF yet!  I am definitely holding out for the Poly.  The time we were at GF for our 1900 Park Fare dining, I felt too out of place at the lobby -- like I (we) didn't belong there


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## chriskre

lizap said:


> Yeah, I'm waiting for a Poly resale too.  Should be ready to purchase by then.



Well don't wait til then.
I don't regret buying my DVC one bit and I bought direct from the Mouse.

I've really gotten alot of mileage out of my ownership and this year even rented some of my points to pay my MF's and am vacationing very cheap thanks to my points renters.


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## lizap

Being pretty much assured of renting points is another big plus for DVC.



chriskre said:


> Well don't wait til then.
> I don't regret buying my DVC one bit and I bought direct from the Mouse.
> 
> I've really gotten alot of mileage out of my ownership and this year even rented some of my points to pay my MF's and am vacationing very cheap thanks to my points renters.


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## chriskre

lizap said:


> Being pretty much assured of renting points is another big plus for DVC.



Yes it is and if you don't want to mess with it then hire Daddio and he will get you $11 a point.


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## Twinkstarr

chriskre said:


> Yes it is and if you don't want to mess with it then hire Daddio and he will get you $11 a point.



I used Daddio last year, when we did only one trip(which was to Disneyland and was able to get a 2br at VGC). Very easy!

A few months prior to the stay, to an email to call. Renter wanted to add Deluxe Dining Plan and info for Magic Express. 

I was paid 1/2 when the reservation was made(same day) and the balance the day of check in. 

Daddio's staff is very pleasant. Would do it again.


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## MichaelColey

One place where Disney makes financial sense is if you're happy in a Studio.  Those require so few points that it makes the cost comparable to some of the Value or Moderate Disney hotels.

That doesn't apply to my family, as we strongly prefer a 2BR (or larger) unit.  And those aren't cheap.  I'll exchange in through RCI as long as that's feasible, because it's a fraction of the cost for me, but given the choice between staying on site using DVC points or staying off site for a small fraction of the cost, we're perfectly fine staying off site.


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## chriskre

MichaelColey said:


> One place where Disney makes financial sense is if you're happy in a Studio.  Those require so few points that it makes the cost comparable to some of the Value or Moderate Disney hotels.
> 
> That doesn't apply to my family, as we strongly prefer a 2BR (or larger) unit.  And those aren't cheap.  I'll exchange in through RCI as long as that's feasible, because it's a fraction of the cost for me, but given the choice between staying on site using DVC points or staying off site for a small fraction of the cost, we're perfectly fine staying off site.



This is very true and since I am single this works great for me most times.
This one splurge though, is costing me alot of points for just a few days in a 2 bedroom.  I probably won't be doing it again any time soon and will just try for an exchange.  Eventually those VGF units should hit RCI.  :ignore:


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## timeos2

Although some times the high buy in cost can be nearly equaled by a high sell value, it can also turn out to be a loss. And the older the contract gets the fewer years are left thus the value is bound to drop. Unless you feel the use in that period offsets the resale value drop then you are on the losing end of that equation. 

With a property like Wyndham you can buy for very little & thus can sell for very little and suffer no loss & no massive amount of capital tied up in the interim. 

Thats the better way for my use.


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## lizap

There are many low to no cost TSs which you can't sell at any price, and then you're stuck with MFs.




timeos2 said:


> Although some times the high buy in cost can be nearly equaled by a high sell value, it can also turn out to be a loss. And the older the contract gets the fewer years are left thus the value is bound to drop. Unless you feel the use in that period offsets the resale value drop then you are on the losing end of that equation.
> 
> With a property like Wyndham you can buy for very little & thus can sell for very little and suffer no ooss & no massive amount of capital tied up in the interim.
> 
> Thats the better way for my use.


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## heathpack

We bought our small Villas at Grand California contract resale at $92/pt plus $500 in closing costs. 

We've stayed a total of 8ish nights in a VGC studio.

If we sold our contract now, we could likely get $105/pt. Even with a 10% sales commission, we'd recoup our original purchase price. Which would have made our eight nights at VCG free.

We bought at VGC and paid a premium in part because we felt like resale values would hold strong for about a decade. So if we sold early, we'd do ok. If we hung onto it for years, we'd be counteracting the cost of anticipated hotel room rate increases (which compound over time, becoming more significant in the long term than the short term). DVC is expensive, yes, but it's not a completely irrational purchase. Sure, there's always tons of ways to lose when you play the TS game- we should all proceed fully informed and realistic about the risks. But that doesn't mean the decision to purchase is pure emotion. We like VGC. We have very little interest in staying elsewhere in Anaheim. We availed ourselves of an opportunity to stay more affordably. We had the cash to take the gamble. It was actually a very well-thought-through non-emotional move. So far, the gamble has paid off. In the end, it might not. 

I've also stated this before- if you live in SoCal and just want weekend stays at Disneyland (as opposed to a full week), VGC starts to make sense. If studios work, you want partial week stays, you want to stay when you want to stay (ie the booking advantage is a real benefit) and you have the cash in the bank, at VGC purchase is reasonably rational.

H


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## Myxdvz

timeos2 said:


> Although some times the high buy in cost can be nearly equaled by a high sell value, it can also turn out to be a loss. And the older the contract gets the fewer years are left thus the value is bound to drop. Unless you feel the use in that period offsets the resale value drop then you are on the losing end of that equation.
> 
> With a property like Wyndham you can buy for very little & thus can sell for very little and suffer no loss & no massive amount of capital tied up in the interim.
> 
> *Thats the better way for my use*.



And that's really the thing - "my use".  

I don't think it's an either/or decision.  I have DVC.  I fully realize that it's only best for WDW/DL trips.  I also have Wyndham.  I know I need one more.  I thought maybe I could use RCI's Last Call/Extra Vacations to augment, but the schedules don't really work for me.  Maybe RCI points?  Maybe a fixed week in MI/MN somewhere.  Maybe I'll continue to just rent/pay cash for the rest of our vacations.

I know the strengths of each.  I also know their weaknesses.  There's no  One size fits all scenario in the TS world.

But seriously, I've looked at all of our vacations - and we rarely do 1 week (exactly 7 day) vacations with a check in of Fri, Sat, Sun.  For the most part they're long weekends for anywhere near us -- and for the far destinations, they're normally 5 days, Sun to Thurs, Monday to Friday, etc.  We adjust with the flight costs, school schedule, my husband's resistance to driving when on vacation unless absolutely necessary, etc.

Our plan is to only do Disney or to only do non-Disney for our Orlando/LA trips.  

For Orlando, 2 trips in 12 months with AP.  Then when we do the non-Disney trips, we can use RCI or Wyndham.  I think my friends are crazy when they do a 5 day Orlando trip and then do BOTH Disney and Universal.  But again, that's me.  

For DLR, we stay at VGC for DL and then for Universal/Hollywood, etc - we stay elsewhere.


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## lilpooh108

capjak said:


> I have been contacting DVC resales and watching regularly for my use year and any with banked or current year points seem to sale within a day, if it is a small contract less than 100 points  it is pending sale within hours.
> 
> I have never seen the resale market like this, just 12 months earlier the same properties were going for 20% less per point.
> 
> Anyone else looking to buy?



I've both bought and sold in the last 3 years.  The last time I bought, I called within literally 2 minutes of receiving the email from TSS and someone else was making an offer as I was on the phone.  I got the contract.

I sold a contract a few months ago and "lost" only the commission since it was essentially what I paid for it.  The contract got 3 offers within 12 hours.

That said, I'd only buy resale from DVC and still only at a good price.


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## stoler527

*10 day stays*

We like to stay at Disney for about 10 days. At seven days we are not ready to go home. At two weeks we are tired of being there.

We decided to buy points to add extra days to our Marriott 7 day stays.

We investigated the new Marriott points program, but were put off by Marriott's ability to raise the number of points needed for a stay. We felt that we would eventually either be short of points or constantly need to buy more. We were afraid it would develop into a Rewards points scenario.

When we looked at Disney, the points looked expensive compared to buying timeshares on ebay. However, compared to Marriott points costs it wasn't so bad. At a given resort, Disney can shift points from one season to another, but they can't raise the total number of points in the points chart. That gave us a certain feeling of security.

We will do split stays with 3-4 days at Disney and 7 at Marriott. During the Disney days we will ride the bus and do EMH. On the Marriott days, we may visit Disney, but we may also hit the outlet mall, Sea World, and Universal. 

We didn't want to make the investment into several weeks of Disney because of the expense. However, we are finding that we enjoy the Disney stays and would find a use for some more points. So we are on the prowl.


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## lilpooh108

Crafty527 said:


> Disney can shift points from one season to another, but they can't raise the total number of points in the points chart. That gave us a certain feeling of security.



While this is true, shifts can be (and in certain past years have been) large enough to effectively cut one or two nights from your weeklong stay, assuming you like to vacation the same week/season each year.  For some, this is a deal breaker.  If you're flexible enough to follow the seasons that work for you, then I guess it's not a big deal.


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## stoler527

*Raising point requirements*

With Disney, at least I would have options. With Marriott, if they raise everything across the board, I have nowhere to go except shortened vacations or additional purchases just to break even. Marriott raised the requirements for using Rewards points so much that you are no longer close to breaking even with your maintenance. They could do something like this with their destination points. At least Disney has some limitations.

We don't regret the Disney purchase. I am sure that in the future we won't be happy with everything. You make your choice you live with it, I guess.


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## SueDonJ

Crafty527 said:


> ... We investigated the new Marriott points program, but were put off by Marriott's ability to raise the number of points needed for a stay. We felt that we would eventually either be short of points or constantly need to buy more. We were afraid it would develop into a Rewards points scenario. ...





Crafty527 said:


> ... With Marriott, if they raise everything across the board, I have nowhere to go except shortened vacations or additional purchases just to break even. Marriott raised the requirements for using Rewards points so much that you are no longer close to breaking even with your maintenance. They could do something like this with their destination points. ...



A short tangent off-topic -

According to posts #101 and #107 here from TUGger MVCI Customer Advocate (which has been acknowledged by Marriott's Customer Advocacy office to be an "official" Marriott contact,) Marriott doesn't have unfettered, "ability to raise the number of points needed for a stay" in their Destination Club system.  It appears they can only do re-allocations in the Points Charts similar to DVC's re-allocation allowances, i.e. any increases must be offset with decreases.


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## stoler527

I certainly may be wrong about the ability of Marriott to raise required points values

I got my information at an owners meeting at Canyon Villas. They stated that they could raise point values required for reservations at their discretion. They said this to a room full of owners. I believed them.

Not having bought points, I don't have access to the official documents. 

For us it is too late. We already bought Disney points and have gone that route.


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## Myxdvz

I actually looked at Marriott points.  I love their properties.

The deal breaker for me (re: the DC) - is that it's too new.  Inventory is spotty, no resale market, and no exit strategy.


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## stanleyu

lilpooh108 said:


> While this is true, shifts can be (and in certain past years have been) large enough to effectively cut one or two nights from your weeklong stay, assuming you like to vacation the same week/season each year.  For some, this is a deal breaker.  If you're flexible enough to follow the seasons that work for you, then I guess it's not a big deal.



It's more than that - if you're flexible, that shift can actually ADD a day or two to your stay time!


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## stoler527

*Weeks and points combo*

The combination of weeks and points works great for us. The weeks provide one kind of vacation opportunity and the points provide another.

Whose points you buy depends on your usage. We love Disney and are willing to lose some location flexibility to stay on world. We had been very happy with our Marriott weeks membership and seriously considered their points system.

With the information that we had, Marriott points didn't seem like the best choice for us. We are retired and were afraid of any escalating costs.

We wouldn't get rid of either our Marriott or our Disney ownership. We use both of them to the max and have wonderful vacations.


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## lizap

And often you can't sell for any price ..



timeos2 said:


> Although some times the high buy in cost can be nearly equaled by a high sell value, it can also turn out to be a loss. And the older the contract gets the fewer years are left thus the value is bound to drop. Unless you feel the use in that period offsets the resale value drop then you are on the losing end of that equation.
> 
> With a property like Wyndham you can buy for very little & thus can sell for very little and suffer no loss & no massive amount of capital tied up in the interim.
> 
> Thats the better way for my use.


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## lilpooh108

stanleyu said:


> It's more than that - if you're flexible, that shift can actually ADD a day or two to your stay time!



I totally agree.  We're not flexible any more (stuck to school schedules), so we're beholden to point changes and now we stick to studios.  In fact, we own quite a few points but we are point-stingy and stay in studios and rent out the rest for DCL cruises.


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## timeos2

lizap said:


> And often you can't sell for any price ..



Hardly ever the case. If you bought a resort that had use value, not take some free off season blue or white week with the idea of  strictly trading, then it will also likely have value to another buyer.

And talk about can't give it away what will the value of a DVC ownership be as the last 5-10 years remaining of use roll around & those $1500+ annual fees lurk? Who will be silly enough to pay the big dollars owners needed to recover for the hefty DVC purchase cost then? Likely no one! And then the final year comes and the value is truly zero. Not going to get much back from that!  And won't be able to give it away either.


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## stoler527

*Extension*

DVC offered extensions at OKW at one point. I believe that Disney will do something as the expiration deadline approaches. I don't think that they will want to lose all those regular customers overnight. 

I am sure that their offer will make them a lot of money. Unfortunately, I won't still be alive to see it.  
Our daughter will have to deal with it.


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## dundey

timeos2 said:


> Hardly ever the case. If you bought a resort that had use value, not take some free off season blue or white week with the idea of  strictly trading, then it will also likely have value to another buyer.
> 
> And talk about can't give it away what will the value of a DVC ownership be as the last 5-10 years remaining of use roll around & those $1500+ annual fees lurk? Who will be silly enough to pay the big dollars owners needed to recover for the hefty DVC purchase cost then? Likely no one! And then the final year comes and the value is truly zero. Not going to get much back from that!  And won't be able to give it away either.



True but if you bought far enough out you're already saved enough $ (as compared to Disney hotel stays and associated perks and discounts you get with being an owner) to make up most of the purchase price.  

And in those later years you can always rent your points for about double the maint. fees, so that is a non issue.

As for your "hardly ever" comment that is just not true.  There are plenty of red weeks out there with little or no value.  

As far as I'm concerned a resale Disney contract is one of the best timeshare values there is, IF you want to stay on site of course.


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## lizap

Your second sentence begins with 'if'.




timeos2 said:


> Hardly ever the case. If you bought a resort that had use value, not take some free off season blue or white week with the idea of  strictly trading, then it will also likely have value to another buyer.
> 
> And talk about can't give it away what will the value of a DVC ownership be as the last 5-10 years remaining of use roll around & those $1500+ annual fees lurk? Who will be silly enough to pay the big dollars owners needed to recover for the hefty DVC purchase cost then? Likely no one! And then the final year comes and the value is truly zero. Not going to get much back from that!  And won't be able to give it away either.


----------



## lizap

As we know Disney TSs are among the best if you need to unload.  The same can't be said for some others.


----------



## benyu2010

lizap said:


> As we know Disney TSs are among the best if you need to unload.  The same can't be said for some others.



This mostly due to DVC aggressiveness of ROFR and an orderly resale market, in addition to its limited supply in secondary. Disney's price is pretty steep compared to other lodging option. Personally, I would only stay onsite for my daughter, her taste evolves rapidly though.


----------



## MichaelColey

benyu2010 said:


> This mostly due to DVC aggressiveness of ROFR and an orderly resale market, in addition to its limited supply in secondary. Disney's price is pretty steep compared to other lodging option. Personally, I would only stay onsite for my daughter, her taste evolves rapidly though.


I would have to disagree.  ROFR is more a result of intrinsic value rather than the other way around.  If there wasn't value, Disney wouldn't be buying it back.


----------



## benyu2010

MichaelColey said:


> I would have to disagree.  ROFR is more a result of intrinsic value rather than the other way around.  If there wasn't value, Disney wouldn't be buying it back.



We may disagree on chicken and egg which comes first, but the fact remains the same. DVC would only ROFR if it can flip and/ or drive up the overall price and demand for its operation. Price was much lower in last a few years, but less ROFR activities. I love to have a few DVC contracts, current resale price is pretty much touching the ceiling though.


----------



## timeos2

MichaelColey said:


> I would have to disagree.  ROFR is more a result of intrinsic value rather than the other way around.  If there wasn't value, Disney wouldn't be buying it back.



Disney will only use ROFR as long as they feel thy can make money - period. They will get the property back in the end so the minute they feel there is any chance that they can't resell for a substantial profit they won't be using ROFR. 

Thinking people will "rent for more than fees" is also unrealistic. And what sense does it make to simply get the fees paid then walk away a year or two later with nothing when it reverts back to Disney? You are still out the substantial purchase cost at that point. 

Disney is a great system, but it ultimately guarantees only one group will make money. Disney. Some others might make a little along the way but if you stay in too long you will end up with nothing. That is what you agreed to when you buy it.


----------



## icydog

timeos2 said:


> Although some times the high buy in cost can be nearly equaled by a high sell value, it can also turn out to be a loss. And the older the contract gets the fewer years are left thus the value is bound to drop. Unless you feel the use in that period offsets the resale value drop then you are on the losing end of that equation.
> 
> With a property like Wyndham you can buy for very little & thus can sell for very little and suffer no loss & no massive amount of capital tied up in the interim.
> 
> Thats the better way for my use.



 I sold all my old DVC points for a profit in 2010. Then I bought them back on the resale market for a lot less money than I sold them for. So it is not always the case that you will lose money if you bought long enough ago or if you can find a reasonably priced resale.


----------



## benyu2010

timeos2 said:


> Disney is a great system... Some others might make a little along the way but if you stay in too long you will end up with nothing. That is what you agreed to when you buy it.



John is right.

DVC is an RTU contract. You may sell at good price due to price increase once, but it is against odds to gain on the pricinple of an RTU contract.


----------



## icydog

benyu2010 said:


> John is right.
> 
> DVC is an RTU contract. You may sell at good price due to price increase once, but it is against odds to gain on the pricinple of an RTU contract.




Now that all my points were purchased on the resale side of things I think what you're saying is valid.  But I bought my Disney's Old Key West points for $50 each, Disney's Boardwalk Villas for $60 and Disney's Beach Club Villas for $67.  I sold them for a lot more than I paid for them. 

I broke even on my Disney's Bay Lake Towers points and lost money on my Vero and Disney's Animal Kingdom Villas points. 

All in all, since I had so many winners, I came out ahead.  This is an anomaly for timeshares, wouldn't you say?


----------



## benyu2010

icydog said:


> Now that all my points were purchased on the resale side of things I think what you're saying is valid.  But I bought my Disney's Old Key West points for $50 each, Disney's Boardwalk Villas for $60 and Disney's Beach Club Villas for $67.  I sold them for a lot more than I paid for them.
> 
> I broke even on my Disney's Bay Lake Towers points and lost money on my Vero and Disney's Animal Kingdom Villas points.
> 
> All in all, since I had so many winners, I came out ahead.  This is an anomaly for timeshares, wouldn't you say?



Good for you, DVC price are up a lot in last 6 months or so. Timeshare (resale) prices are up across the board due to improved economy.


----------



## icydog

benyu2010 said:


> Good for you, DVC price are up a lot in last 6 months or so. Timeshare (resale) prices are up across the board due to improved economy.




I know.  I've noticed that Disney is buying back a lot of contracts which is keeping the value there for owners but for someone looking for a contract, like I am at the moment, its bad news.  So on one hand I'm happy and on the other I'm not so happy.


----------



## timeos2

It is locking you out but not "keeping prices up" as the seller only gets what you would have paid. No bonus, no minimum & they can't even take counteroffer's which Would likely actually increase the sale price. More ROFR hurting owners & buyers. 

Proudly Microsoft / Apple free with Droid Bionic & Tapatalk


----------



## capjak

I just found and am in ROFR starting 8/12/2013 with Disney for an 150 SSR contract loaded with 300 points in 2013 use year and 150 forward for $63 per point.  Will let you know if it gets taken by DVC


----------



## Dennyha

Myxdvz said:


> I don't think you can compare it with any existing TS except maybe Wyndham or HGVC.  But even when I do, I like DVC better
> 
> Is it expensive?  Yes.  So, it's definitely not for everyone.  But here's what I like about it.
> 
> * No reservation fees
> * No banking/borrowing fees
> * No housekeeping fees
> * No guest certificate fees
> * I can book 1 night if I want.  It doesn't have to be a Friday, Saturday or Sunday
> * I can fit my family of 5 in a 1 BR -- legally
> * Magical Express
> * PAP/AP Discount
> * Tables in Wonderland Card
> * ToTWL access
> * Very good resale value.  If you bought in early enough.  you could sell it now and probably recoup your initial purchase price.  If you bought resale, you might have even made a profit.  Not saying it will continue to be so.  But it's definitely not going to be in any bargain bin anytime soon.
> 
> I actually like that I don't own it forever.  No saddling my family with MFs that they may not want.
> 
> For going to WDW (and DVC), it's just the best TS to have.  IMO, YMMV and all that jazz.
> 
> Can you get a DVC reservation via RCI if you're on top of your OGS?  Sure!  If you want it guaranteed -- only way is to rent or own.
> 
> I do think the direct prices are crazy high right now.  Which then fueled the increase in resale prices as well.  But if one is patient, and not in a hurry -- when prices settle down, it could still be a good buy.



I couldn't agree more.  Also, as someone else said, you have to like Disney.  With a trip to Disney, you know exactly what you're getting.  Nobody goes to Disney looking for a bargain, but you know you're going to get quality.  With DVC, you also know you're going to be able to sell it when you want to.


----------



## Clemson Fan

lizap said:


> Seriously considered a Disney resale.  Problem is compared to Westin or Hyatt, you simply can't justify the price.  A Disney 2 BR (enough points) resale costs roughly the same as a platinum 2 BR Westin at a mandatory property.  With Disney, I can take one trip to Disney every 2 years.  The same equivalent with Starwood will allow me to stay at a Starwood property (using internal exchanging) at least several times a year.  Plus Disney TSs expire, while Starwood is deeded and can be willed to an heir.  No way to justify the price.  You do it because you really want to own part of Disney and stay at Disney.



I personally think DVC is the best TS you can buy today. I now own 830 points between VGC and OKW.  My first 250 points at VGC were bought directly through DVC at a special of $88/point and the others were acquired through various resale contracts.  I just recently closed on a loaded 270 point OKW contract for $50pp.  It had 270 banked points that I didn't even need to pay the MF on since they were banked.  I gave them to Daddio and had those points rented in less then 24 hours for a net of $11pp for me.

Any or all of my DVC points I could sell for significantly more then I paid probably in less then 24 hours.  If I don't need the cash which I don't I can rent my points for $11pp again in less than 24 hours.

No other timeshare system has such a robust resale and rental market.  To me that makes buying DVC very sensible and a very low risk proposition.

I also own 5 Marriott weeks and while their rental market is good, their resale market sucks.  My Marriott weeks have been good to me, but I no longer recommend a Marriott TS purchase to my friends.  However, I definitely recommend DVC to my friends.


----------



## tomandrobin

capjak said:


> I just found and am in ROFR starting 8/12/2013 with Disney for an 150 SSR contract loaded with 300 points in 2013 use year and 150 forward for $63 per point.  Will let you know if it gets taken by DVC




It will pass.....I passed at $58pp for a loaded SSR contract a few months ago.


----------



## tomandrobin

Clemson Fan said:


> No other timeshare system has such a robust resale and rental market.  To me that makes buying DVC very sensible and a very low risk proposition.
> 
> I also own 5 Marriott weeks and while their rental market is good, their resale market sucks.  My Marriott weeks have been good to me, but I no longer recommend a Marriott TS purchase to my friends.  However, I definitely recommend DVC to my friends.



I 100% agree. 

I own 7 Starwood weeks and their rentals are good, but no where near as good when compared to DVC. I can list my 3-bedroom Atlantis and 2-bedroom St John week and it will take months and months to rent them. With DVC, I can rent 500-800 points in 24 hours at $11 pp. If I want $14 pp, it might take a week. 

Want to see its demand and popularity, check the sightings board.....DVC is all over it. 

There are a lot of vocal people who dislike Disney and takes a shot at them whenever they can. DVC has had a long running track record of resales and rentals......not a 3 year flash like South Africa timeshares, or other timeshare flavor of the year. 

Current DVC resale prices are back up to pre-recession levels. I can tell you for a fact that Starwood properties have not bounced back as well. 

Yes, DVC units are RTU (leasehold) for 50 years. I am 47 and will take that "zero" value in 40-50 years. One thing that won't change, even at the end is Disney World will still be there.


----------



## lizap

No doubt DVC is an excellent product.  But since we have no intention of ever renting our points, this cannot be used as part rationale for buying...



tomandrobin said:


> I 100% agree.
> 
> I own 7 Starwood weeks and their rentals are good, but no where near as good when compared to DVC. I can list my 3-bedroom Atlantis and 2-bedroom St John week and it will take months and months to rent them. With DVC, I can rent 500-800 points in 24 hours at $11 pp. If I want $14 pp, it might take a week.
> 
> Want to see its demand and popularity, check the sightings board.....DVC is all over it.
> 
> There are a lot of vocal people who dislike Disney and takes a shot at them whenever they can. DVC has had a long running track record of resales and rentals......not a 3 year flash like South Africa timeshares, or other timeshare flavor of the year.
> 
> Current DVC resale prices are back up to pre-recession levels. I can tell you for a fact that Starwood properties have not bounced back as well.
> 
> Yes, DVC units are RTU (leasehold) for 50 years. I am 47 and will take that "zero" value in 40-50 years. One thing that won't change, even at the end is Disney World will still be there.


----------



## benyu2010

I can't agree more that DVC is one of better timeshare system. However, compare liquidity of point rental and week rental is apple and orange. DVC has limited supply of point rental at moment due to strong travel demand, but point rate may drop if demand lessen, especially its spead between point rental rate and reservation is next to none.


----------



## frank808

benyu2010 said:


> I can't agree more that DVC is one of better timeshare system. However, compare liquidity of point rental and week rental is apple and orange. DVC has limited supply of point rental at moment due to strong travel demand, but point rate may drop if demand lessen, especially its spead between point rental rate and reservation is next to none.



Wyndham Bonnet Creek is a points system (also is closer than some of the DVC resorts to the WDW parks) yet they do not rent for a premium like DVC. I also have HGVC points and they are not as big a demand as my DVC points.  You are right as it comes down to supply and demand.  DVC has always had a very strong demand and hence the highest resale of any timeshare I know of.


----------



## benyu2010

With DVC's continuous effort to build off site and less desireable resorts to generate inventory, the point demand of onsite lodging might be diluted. After all, DVC is a niche and auxiliary product featured the mouse, the market is always there as long as mouse shines. I agree with your assessment of current market and its premium status, I just cannot see it has any upside potential in price. The value is only in (artificially priced) usage once point rental market evenly supplied.

Wyndham Bonnet Creek and Worldmark Anaheim are both reasonable alternative to its themed resorts at fractional of the cost. Both have abundant supply of points and rental, thus depressed its rate. Affordability is one thing, the other is choice...

ROFR activity is likely the main indicator and driven factor for DVC price. Mouse-dedicated boards are good place to gauge the direction of the market.


----------



## tomandrobin

benyu2010 said:


> With DVC's continuous effort to build off site and less desireable resorts to generate inventory, the point demand of onsite lodging might be diluted. After all, DVC is a niche and auxiliary product featured the mouse, the market is always there as long as mouse shines. I agree with your assessment of current market and its premium status, I just cannot see it has any upside potential in price. The value is only in (artificially priced) usage once point rental market evenly supplied.
> 
> Wyndham Bonnet Creek and Worldmark Anaheim are both reasonable alternative to its themed resorts at fractional of the cost. Both have abundant supply of points and rental, thus depressed its rate. Affordability is one thing, the other is choice...
> 
> ROFR activity is likely the main indicator and driven factor for DVC price. Mouse-dedicated boards are good place to gauge the direction of the market.



Another Non-Owner perspective, that is opinion based....passed off as facts. Sheesh.

DVC does not have a "continuous record" of off-site building. Diluting of points....again, this shows how much you really don't know DVC or their resorts. 

The DVC rental market survived the recession and has since bounced back even higher then before the recession. Most owners current rent their points for $12-$14 pp, pre-recession its was $12 and during the recession $10-$11pp were the norms. This is across all the resorts. What other timeshare system can claim that for their resorts? 

"Wyndham Bonnet Creek and Worldmark Anaheim are both reasonable alternative".....sure, but they are not Disney. You don't have the service, the location and DVC perks. Its cheaper because its a cheaper experience. The price is less because it offers less. I don't see people posting all over the sightings board about Bonnet Creek rooms......I wonder why? 

ROFR is not the driving force of resale prices. DVC rarely executes their right. They will as the need arises, and usually at the smaller or more in demand resorts. Starwood has a ROFR policy at some of their resorts and it has not been a deterrent since the recession on the free-fall the resale prices took.


----------



## tomandrobin

benyu2010 said:


> I can't agree more that DVC is one of better timeshare system. However, compare liquidity of point rental and week rental is apple and orange. DVC has limited supply of point rental at moment due to strong travel demand, but point rate may drop if demand lessen, especially its spead between point rental rate and reservation is next to none.



Huh? Spread rates? Do you know what you are trying to say or are you trying to suggest something that doesn't exist? 

I have been a renting of DVC points for as long as I have been an owner. Renting points has never been a problem, even during the recession.


----------



## tomandrobin

lizap said:


> No doubt DVC is an excellent product.  But since we have no intention of ever renting our points, this cannot be used as part rationale for buying...



My post was referring to how strong the rental and resale market for DVC is as an indicator to its popularity and success. 

I do use DVC as a rental income to cover all my maintenance fees, and no many other people who do the same. This has been my strategy form the my first year of ownership. I have never been stuck with an unused point and I have never not found renters for my points.


----------



## benyu2010

tomandrobin said:


> Another Non-Owner perspective, that is opinion based....passed off as facts. Sheesh.
> 
> DVC does not have a "continuous record" of off-site building. Diluting of points....again, this shows how much you really don't know DVC or their resorts.
> 
> The DVC rental market survived the recession and has since bounced back even higher then before the recession.* Most owners current rent their points for $12-$14* pp, pre-recession its was $12 and during the recession* $10-$11pp* were the norms. This is across all the resorts. What other timeshare system can claim that for their resorts?
> 
> "Wyndham Bonnet Creek and Worldmark Anaheim are both reasonable alternative".....sure, but they are not Disney. You don't have the service, the location and DVC perks. Its cheaper because its a cheaper experience. The price is less because it offers less. I don't see people posting all over the sightings board about Bonnet Creek rooms......I wonder why?
> 
> *ROFR is not the driving force of resale prices*. *DVC rarely executes their right*. They will as the need arises, and usually at the smaller or more in demand resorts. Starwood has a ROFR policy at some of their resorts and it has not been a deterrent since the recession on the free-fall the resale prices took.



You own plenty of DVC and it seems work out really well for you. I'm a potential buyer of large trunk of points. It is obvious we may differ even with same facts under opposite lights. Good for you that you got in at right time and has less bumpy ride.

VB was just a mistake and now Aulani is expanding. SSR is not off-site, but not very D themed and more of points generator for reservations at elsewhere. Floridian is open and another is in the plan. Off-site might not be an accurate word for Disney Grand Villas California? Well, it was not written clearly though. There are only two Disney park locations. One would be oversupplied with plenty of points in various themed resorts and the other is totally opposite.

http://www.dvcrequest.com/ David only charges $14 from a tenant side with little effort for a reservation, it seems $14 is far fetch for point rental unless it is resort-point for GVC. $11~$12.5 might be the norm at the moment, I don't rent them, I watch them all the time. DVC point has high yield compared to MF, it is RTU and amortization of principle though. 

Nonetheless, saying ROFR is not the driving force of resale price and right has been rarely exercised is fictitious. The #1 thought after signed of a contract is ROFR, many folks offer or shops prom certain price only because of potential ROFR. If ROFR does not exist or exercise frequently, especially in last six months, price would not pick up that much.


----------



## benyu2010

tomandrobin said:


> Huh? Spread rates? Do you know what you are trying to say or are you trying to suggest something that doesn't exist?
> 
> I have been a renting of DVC points for as long as I have been an owner. Renting points has never been a problem, even during the recession.



Again, it seems you know DVC and DVC well. Then this spread between point rental and rental of reservation is not your cup of tea. It exists in other systems.


----------



## tomandrobin

benyu2010 said:


> You own plenty of DVC and it seems work out really well for you. I'm a potential buyer of large trunk of points. It is obvious we may differ even with same facts under opposite lights. Good for you that you got in at right time and has less bumpy ride.
> 
> Nonetheless, saying ROFR is not the driving force of resale price and right has been rarely exercised is fictitious. The #1 thought after signed of a contract is ROFR, many folks offer or shops prom certain price only because of potential ROFR. If ROFR does not exist or exercise frequently, especially in last six months, price would not pick up that much.



I have bought points every year since 2005. I have been there through the good and the bad. So I am not sure of the "right time" you are referring of. Half of my purchases have been direct and half has been resale.

Out of all the DVC contracts, Disney only takes 1-2% back. Some resorts are higher, like VGC. Disney gets more points back in the form of foreclosures and bankruptcies then through ROFR. 

The current Resale prices are set at the various resorts, for different set of reasons. AKV there is zero ROFR activity, cause its in active sales. BLT resale price is high cause of it being the last sold, at the highest prices. People can only sell it for what they owe on it, hence the $90ish per point price. 

Prices have gone up cause people are buying, not because people are selling. Most of the big DVC Brokers have very little inventory, especially at VGC, BWV and BCV. 

I recently sold a BWV contract for $80pp, that I bought for $60pp 3 years ago. The difference is that three years ago the market was flooded with desperate owners trying to sell their timeshares. If you look now, you'll be hard pressed to find a lot of BWV contracts. 

I can tell you all sorts of stats, numbers and reasons why DVC is what it is.....just ask. If you are buying, there are still deals to be made, you just have to look harder and deeper. Just a few years ago it was like shooting fish in a barrel.


----------



## tomandrobin

benyu2010 said:


> Again, it seems you know DVC and DVC well. Then this spread between point rental and rental of reservation is not your cup of tea. It exists in other systems.




I know the spreads of rentals vs cost vs cash vs etc......I am just not clear in what you are referring?


----------



## benyu2010

tomandrobin said:


> I can tell you all sorts of stats, numbers and reasons why DVC is what it is.....just ask. If you are buying, there are still deals to be made, you just have to look harder and deeper. Just a few years ago it was like shooting fish in a barrel.
> 
> I know the spreads of rentals vs cost vs cash vs etc......I am just not clear in what you are referring?



My observation of resale price is skewed based on recent 'shooting fish in a barrel'? PM will be sent shortly...

Most DVC point renters (who rent in) are for one-time extra personal use. They may pay top dollars with limited point rental supply. If I can reserve at $14 from David with no upfront cost, why should I own and rent extra points at $12~$14 to stay? I'm referring to the spread is narrow due to nature of the market, however, it may change after more points rental available. 

BTW, DVC official rate is only $15...


----------



## tomandrobin

benyu2010 said:


> Most DVC point renters (who rent in) are for one-time extra personal use. They may pay top dollars with limited point rental supply. If I can reserve at $14 from David with no upfront cost, why should I own and rent extra points at $12~$14 to stay? I'm referring to the spread is narrow due to nature of the market, however, it may change after more points rental available.
> 
> BTW, DVC official rate is only $15...




In my experience, most renters are not one and done. Almost all my rentals are repeat clients now. I can't tell you every reason why they do not buy in themselves. 

David commands a high rental price because of the high trust factor his clients have in his service and the ease of one-stop renting. 

Another reason for the jump of the resale market is that buying Disney Direct has become very expensive. Just two years ago you could buy in at under $100 pp direct. Now its $150 pp buying direct for the new WDW properties. Disney raising their direct sale prices have had more of an impact then ROFR. 

You can't rent DVC points driect from Disney, except as a one-time function and it's a limit of 25 points max.


----------



## SMHarman

This is interesting and something I want to understand better.

So you buy disney points on the resale market currently at say between $80-$100 a point.
Those points have an average MF of $6 (looking at dvc resales ).
Those points RTU in 2042 so have 30 years to depreciate.

You can rent these points for say $12 each.

So each year you are clearing $6 a point.  You have to pay off the initial capital invested.  That takes 13-16 years?

Taking simple calculations (no time value of money)
Your 90 invested seems to turn into an annuity that yields about 3 a year.
Each year being -6 + 12 - 90/30 (3)  =  3
3/90 = 3% return.

I should put that in a spreadsheet, but it seems to indicate that finding someone for one off rentals of disney points unless you are a mouseearsaholic is the way to go.

What am I missing?  Is the idea you don't hold to maturity, but say 10 years from now the points can still be unloaded at 90 so you are now getting -6+12=6 a year 6/90=6.6% return.


----------



## tomandrobin

SMHarman said:


> This is interesting and something I want to understand better.
> 
> So you buy disney points on the resale market currently at say between $80-$100 a point.
> Those points have an average MF of $6 (looking at dvc resales ).
> Those points RTU in 2042 so have 30 years to depreciate.
> 
> You can rent these points for say $12 each.
> 
> So each year you are clearing $6 a point.  You have to pay off the initial capital invested.  That takes 13-16 years?
> 
> Taking simple calculations (no time value of money)
> Your 90 invested seems to turn into an annuity that yields about 3 a year.
> Each year being -6 + 12 - 90/30 (3)  =  3
> 3/90 = 3% return.
> 
> I should put that in a spreadsheet, but it seems to indicate that finding someone for one off rentals of disney points unless you are a mouseearsaholic is the way to go.
> 
> What am I missing?  Is the idea you don't hold to maturity, but say 10 years from now the points can still be unloaded at 90 so you are now getting -6+12=6 a year 6/90=6.6% return.



For my resale contracts, I have paid $50-$60 pp and all the contracts are loaded. Which means that it has 3 years worth of points to use and I do not reimburse previous year's maintenance fees paid. I promptly rent out all the banked and current points. 

Current Maintenance fees for SSR is $4.81 pp and I rent those points for $12 per point.


----------



## Myxdvz

SMHarman said:


> This is interesting and something I want to understand better.
> 
> So you buy disney points on the resale market currently at say between $80-$100 a point.
> Those points have an average MF of $6 (looking at dvc resales ).
> Those points RTU in 2042 so have 30 years to depreciate.
> 
> You can rent these points for say $12 each.
> 
> So each year you are clearing $6 a point.  You have to pay off the initial capital invested.  That takes 13-16 years?
> 
> Taking simple calculations (no time value of money)
> Your 90 invested seems to turn into an annuity that yields about 3 a year.
> Each year being -6 + 12 - 90/30 (3)  =  3
> 3/90 = 3% return.
> 
> I should put that in a spreadsheet, but it seems to indicate that finding someone for one off rentals of disney points unless you are a mouseearsaholic is the way to go.
> 
> What am I missing?  Is the idea you don't hold to maturity, but say 10 years from now the points can still be unloaded at 90 so you are now getting -6+12=6 a year 6/90=6.6% return.


Depends how you actually value the vacation you took for 30 years.

The mistake in this calculation, IMO is that it treats the purchase as an investment. It's not. It's simply prepaying your vacation.


----------



## tomandrobin

Myxdvz said:


> Depends how you actually value the vacation you took for 30 years.
> 
> The mistake in this calculation, IMO is that it treats the purchase as an investment. It's not. It's simply prepaying your vacation.



True and untrue.....depends on how you use it and perspective.....and when you decide to sell and for how much. 

I know DVC members who own 5000-8000 points. They don't use them, just rent them to others. They have long paid off their initial "investment" and are now just profiting off their rentals.


----------



## SMHarman

I'm looking at Tom and Robin's comments about buying contracts regularly and renting those points.  To me that treats the whole thing as an investment, along with the 'sellers dream' headline of this thread.

Clearly you can get into fuzzy and not so fuzzy math of what the true value to the owner is, somewhere between http://www.dvcrequest.com/sample_rates.htm
the numbers in the link would be a good example except as an owner you could take those 50 OKW points he wants $700 for and value them at say $9 (6 MF + 3 Depreciation) each and $450 in cost.


----------



## heathpack

Personally for us, the idea is you can book the time you want (weekends at Grand Californian), the size unit you want (studio), sometimes bank/borrow to take trips elsewhere (like 3 nights in Oahu in conjunction with a Big Island stay, flying thru Honolulu in order to get FF award seats) AND on top of that rent points if you decide to AND recoup significant resale value if you hold say 10 years and sell.  Yes it was expensive to buy, but my MF are cheap ($340/yr) and its cheaper for my usage than owning an RCI trader or paying for hotel nights at the Grand Californian and WAY easier to use than either of those options.

My Hyatt has its advantages (can be leveraged into many weeks, trades well internally, good resale value, no II membership fees) and disadvantages (expensive to buy, II trades on 12 mo or less out, semi expensive MF). 

My Starwood has its advantages (was free, trades well into Westin units, semi-cheap MF, II exchanges up to 2 years out) and disadvantages (need II membership, zero resale value/likely will have to pay something to be rid of it).  

The Marriott I'm in the process of buying has its advantages (ability to stay at a location it's hard for me to trade into, cheap price) and disadvantages (no view, semi expensive MF, not a lock off).

There's a real sentiment on TUG that if someone pays a significant dollar amt for a timeshare, they are delusional.  Maybe that is sometimes the case, but many times they have actually made a mathematically rational choice.  Not an investment, but a way to stay somewhere at a lower cost than the reasonable alternatives.

If I decided to sell my VGC, it would indeed be a "dream;" it would sell in 20 seconds for more than I paid for it. Right now.  I get that.  Maybe not in 58 years, but this thread is not about DVC is being a sellers dream for time immemorial.  It just happens to be true right now that these contracts are easy to sell.
H


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## jont

heathpack said:


> There's a real sentiment on TUG that if someone pays a significant dollar amt for a timeshare, they are delusional.  Maybe that is sometimes the case, but many times they have actually made a mathematically rational choice.  Not an investment, but a way to stay somewhere at a lower cost than the reasonable alternatives.
> 
> H



Couldn't agree with you more heathpack. It's all about getting what works best for you. Congrats on the Marriott purchase. That's quite an impressive portfolio you're assembling. What marriott are you getting, if you don't mind me asking. I am still looking for a Hyatt, just haven't been able to pull the trigger yet due to other expenses/comittments. Good luck.


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## Clemson Fan

SMHarman said:


> This is interesting and something I want to understand better.
> 
> So you buy disney points on the resale market currently at say between $80-$100 a point.
> Those points have an average MF of $6 (looking at dvc resales ).
> Those points RTU in 2042 so have 30 years to depreciate.
> 
> You can rent these points for say $12 each.
> 
> So each year you are clearing $6 a point.  You have to pay off the initial capital invested.  That takes 13-16 years?
> 
> Taking simple calculations (no time value of money)
> Your 90 invested seems to turn into an annuity that yields about 3 a year.
> Each year being -6 + 12 - 90/30 (3)  =  3
> 3/90 = 3% return.
> 
> I should put that in a spreadsheet, but it seems to indicate that finding someone for one off rentals of disney points unless you are a mouseearsaholic is the way to go.
> 
> What am I missing?  Is the idea you don't hold to maturity, but say 10 years from now the points can still be unloaded at 90 so you are now getting -6+12=6 a year 6/90=6.6% return.



That's a good calculation, but the assumptions are overly conservative IMO.  The 2042 date is OKW only and the SSR date is 2054.  OKW MF's are $5.34 and SSR are $4.81.

I just closed on a loaded 270 point OKW contract for $50pp where we split the closing costs which cost me about $300.  It came with 291 points that I didn't need to pay any MF for.  I gave those points to David and he had them rented within 24 hours and I netted $11pp.

You can get a resale SSR contract for around $65pp.


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## heathpack

jont said:


> Couldn't agree with you more heathpack. It's all about getting what works best for you. Congrats on the Marriott purchase. That's quite an impressive portfolio you're assembling. What marriott are you getting, if you don't mind me asking. I am still looking for a Hyatt, just haven't been able to pull the trigger yet due to other expenses/comittments. Good luck.



We have a contarct to purchase a Barony Beach gold week EOY.  Its only garden view, which is not ideal, but I didnt want to spend tons of money.  I think we'll wind up just using it EOY.  We have relatives in NC/SC who don't like to travel much- we're hoping to at least entice them to Hilton Head every now and then.

The Hyatt has its plusses and minuses, but overall I think its a really nice TS to own.  If you get more serious, PM me and I will tell you my perspective.

H


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## SMHarman

Clemson Fan said:


> That's a good calculation, but the assumptions are overly conservative IMO.  The 2042 date is OKW only and the SSR date is 2054.  OKW MF's are $5.34 and SSR are $4.81.
> 
> I just closed on a loaded 270 point OKW contract for $50pp where we split the closing costs which cost me about $300.  It came with 291 points that I didn't need to pay any MF for.  I gave those points to David and he had them rented within 24 hours and I netted $11pp.
> 
> You can get a resale SSR contract for around $65pp.



Thanks for that. 

Sent from my LT26i using Tapatalk 2


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## jont

heathpack said:


> We have a contarct to purchase a Barony Beach gold week EOY.  Its only garden view, which is not ideal, but I didnt want to spend tons of money.  I think we'll wind up just using it EOY.  We have relatives in NC/SC who don't like to travel much- we're hoping to at least entice them to Hilton Head every now and then.
> 
> The Hyatt has its plusses and minuses, but overall I think its a really nice TS to own.  If you get more serious, PM me and I will tell you my perspective.
> 
> H



Thanks for the offer H, i will def take you up on it when the time is right. 
Congrats on your marriott purchase. Barony is a very nice resort and the gold season on HHI is wonderful. Just ask JME! The garden view units at Barony are not bad at all and it is a very short walk to the beach. In fact when we stayed there two years ago during the summer, i used to go to the garden area pool because it was less crowed that the beach side pool. That was before all the improvements at the garden pool. they really did a nice job to make that pool very kid friendly. I'm sure you will love it there and welcome to the Marriott "Club".


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## MichaelColey

heathpack said:


> There's a real sentiment on TUG that if someone pays a significant dollar amt for a timeshare, they are delusional.  Maybe that is sometimes the case, but many times they have actually made a mathematically rational choice.  Not an investment, but a way to stay somewhere at a lower cost than the reasonable alternatives.


If they pay a significant amount for a timeshare and don't factor that into their "costs" (instead just looking at MFs), *THAT* is delusional.  For instance, DVC might look like it costs $5/point, based on MFs, but it's much closer to double that when you factor in the opportunity cost of the upfront purchase price.  JMHO.


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## heathpack

MichaelColey said:


> If they pay a significant amount for a timeshare and don't factor that into their "costs" (instead just looking at MFs), *THAT* is delusional.  For instance, DVC might look like it costs $5/point, based on MFs, but it's much closer to double that when you factor in the opportunity cost of the upfront purchase price.  JMHO.



Assuming our usage: 2 Fri-Sat weekend nights per year in low season (we hate crowds) in a studio at the Grand Californian.  Even if we got an RCI exchange, we generally speaking would not want to stay more than the Fri-Sat.  We would prefer a 1BR if we could get it at no additional cost, but we don't want to pay any extra for it, so we put no additional value on the ability to obtain a 1BR unit.

So for our parameters, if the below assumptions hold, DVC ownership is the cheapest option.  But calculations like this have too many variables to really predict the absolute best choice.  Will I really earn 7% on my stock market investment?  Which will go up faster- MF, hotel rates or RCI fees?  What will VGC resale values really be 20 years from now?  You can't really say, you just have to make an informed decision in the end.

*Option 1: DVC Purchase*
VGC 85 pt contract = 4 studio Fr-Sat nights per year, low season
Cost to purchase $92/pt = $7820, plus $500 closing $8320
MF $340/yr, approx $9700 over 20 yr ownership (incl anticipated 3% annual increase)
Cost to own over 20 years $18,000
Anticipated resale value in 20 years $3400 less 10% sales commission approx $3000
TOTAL cost of ownership approx $15,000
TOTAL number nights 80
FINAL Cost per night $187.50

*Option 2: Hotel Stay*
Current price per night Sept 2013 $440 + $75 taxes and resort fee ~ $515/night
Maybe you can sometimes get better rate or AP discount, say 20% off if you stay tuned in to available discounts, maybe $415/night incl taxes/fees.
Assuming 3% annual increase, ave cost per night over 20 years $590
TOTAL cost for 80 nights over 20 years ~$47,000
Less value of $8300 (the dollar amt of the DVC purchase) invested in stock market at 7% return for 20 years ~$30,000
FINAL cost per night $212.50

*Option 3: RCI Trader*
Cost to purchase: $0
MF/yr: $300, need 2 per year for 2 weekends/yr, cost over 20 yr ~$17,000, assuming 3% annual increase
RCI membership: $75/yr????, ~$2100, assuming 3% annual increase
RCI Exchange fees: $190/yr, need 2 exchange fees per year to stay 2 weekends, total cost for 20 years assuming 3% annual increase ~$11,000
Total cost over 20 years $30,000
Plus $ paid to be rid of RCI trader in the end ~$1000
TOTAL costs over 20 years $31,000
FINAL cost per night $385 for 80 nights usage


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## MIDisfan

MichaelColey said:


> If they pay a significant amount for a timeshare and don't factor that into their "costs" (instead just looking at MFs), *THAT* is delusional.  For instance, DVC might look like it costs $5/point, based on MFs, but it's much closer to *double* that when you factor in the opportunity cost of the upfront purchase price.  JMHO.



I agree with you 100% about factoring in all costs but I think double is an overestimate. I purchased back in 2006 at SSR. My upfront cost per point based on the 48 years remaining at the time works out to about $1.80 per point. Even someone purchasing direct at VGF will be around $3. Of course if the purchase is financed, throw those numbers out the window.


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## SMHarman

MIDisfan said:


> I agree with you 100% about factoring in all costs but I think double is an overestimate. I purchased back in 2006 at SSR. My upfront cost per point based on the 48 years remaining at the time works out to about $1.80 per point. Even someone purchasing direct at VGF will be around $3. *Of course if the purchase is financed, throw those numbers out the window.*


But if the purchase is not financed then you need to factor in the cost of not investing that money as Michael did.  He used 7% which is a reasonable rate.  The 5 year S&P 500 return is 5.91% (per year) today.  That is your cost of capital, what you are not earning by using your savings, vs what you are paying for borrowing.
So, for every $100 you spend on DVC points you have to factor in that if you had invested the $100 it would be $106 a year later.  That $6 is a cost you should factor into ownership.
In 48 years your $100 S&P investment should still have value (in fact, with income reinvested, it should be worth 100*1.06^48 which is $1639).  This is that math question of would you take $100 today or $1638 in 48 years time.  The answer is, it does not matter as the value is the same.
Your DVC RTO will be worth 0 so the DVC ownership as an investment acts more like an annuity than an investment.

So lets say you bought at $100 a point (WAG as I don't know what you paid).
That point is costing you $6 in lost investment return (if you financed insert interest rate here)
That point is costing you $4.73 (say $5) in MF
That point with straight line depreciation is costing $2 a year. (I think that is your $1.80 a point).

So that point is costing you about $13 a year with all costs fully baked in.
As heathpack said, 85 points gets him what he wants.  85*13/4=276 a night.
As heathpack has kindly helped me understand, there are also the benefits of discount passes and other benefits to consider (the reason many like to own small points packages).

My number is different to his as I hold to maturity (when RTU expires).  I thiink the correct model is to sell DVC within a 10-20 year time while the buyer is not considering the expiration of the RTU.  In the 2040's-2050's the DVC points will be an interesting value proposition as they should price more like a short term lease, where the purchase price less MF is more aligned with a discounted room rate.


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## MIDisfan

SMHarman said:


> But if the purchase is not financed then *you need to factor in the cost of not investing that money *as Michael did.  He used 7% which is a reasonable rate.  The 5 year S&P 500 return is 5.91% (per year) today.  That is your cost of capital.
> So, for every $100 you spend on DVC points you have to factor in that if you had invested the $100 it would be $106 a year later.  That $6 is a cost you should factor into ownership.
> In 48 years your $100 S&P investment should still have value (in fact, with income reinvested, it should be worth 100*1.06^48 which is $1639).  This is that math question of would you take $100 today or $1638 in 48 years time.  The answer is, it does not matter as the value is the same.
> Your DVC RTO will be worth 0 so the DVC ownership as an investment acts more like an annuity than an investment.
> 
> So lets say you bought at $100 a point (WAG as I don't know what you paid).
> That point is costing you $6 in lost investment return (if you financed insert interest rate here)
> That point is costing you $4.73 (say $5) in MF
> That point with straight line depreciation is costing $2 a year. (I think that is your $1.80 a point).
> 
> So that point is costing you about $13 a year with all costs fully baked in.
> As Michael said, 85 points gets him what he wants.  85*13/4=276 a night.
> As Michael has kindly helped me understand, there are also the benefits of discount passes and other benefits to consider (the reason many like to own small points packages).
> 
> My number is different to his as I hold to maturity (when RTU expires).  I thiink the correct model is to sell DVC within a 10-20 year time while the buyer is not considering the expiration of the RTU.  In the 2040's-2050's the DVC points will be an interesting value proposition as they should price more like a short term lease, where the purchase price less MF is more aligned with a discounted room rate.



Then, IMO, your talking about two different things. Purchasing DVC is an investment in future vacations not an investment in traditional terms. My assumption is that you would use that initial investment to fund future vacations. If I didn't purchase DVC but continued to vacation at DW the same amount of time as I do, my initial investment dollars would be gone by now.


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## SMHarman

MIDisfan said:


> Then, IMO, your talking about two different things. Purchasing DVC is an investment in future vacations not an investment in traditional terms. My assumption is that you would use that initial investment to fund future vacations. If I didn't purchase DVC but continued to vacation at DW the same amount of time as I do, my initial investment dollars would be gone by now.


Would it?  That is where heathpack created option 2.

Instead of buying a point for $100 you invest the $100 at 7%.  It throws off $7 of investment income.
You don't have to pay out $5 of MF
You don't have to consider that the DVC ownership is a depreciating asset so don't have to account for $2 a year of depreciation.

That's $14 a year.  Which conveniently is exactly what you can rent the points for from David.

So you could achieve the same room size and dates of vacation for the same points writing a single $14 a point x points check each year.  Or you could go go tomandrobin and rent them for $11-12 a point.

It may look more expensive because now each year you are writing a check for 85 points x 14 = $1,190 instead of writing a check for $425 and not getting a dividend check for $700 and not having the accounting concept of $190 depreciation but the numbers are the same.

heathpack option 3 is a little skewed.  I see why he did it that way to compare apples with apples but a good RCI trader (2br LO) with the parameters he used would get you the ability to use 14 nights a year, even if you only used 4 of them.  (or maybe with the need to get high TPU for disney you would get need both sides for one week)

That would make the nightly rate on the RCI trader using his math $31,000 of costs / (20 years x 14 nights=280) = $110 a night (or $220 an night if both sides needed to be combined to get to the TPU needed).  Of course DIS makes out like a bandit with you spending 14 nights and days of park tickets and dining etc.


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## MIDisfan

SMHarman said:


> Instead of buying a point for $100 you invest the $100 at 7%.  It throws off $7 of investment income.
> 
> You don't have to pay out $5 of MF
> You don't have to consider that the DVC ownership is a depreciating asset so don't have to account for $2 a year of depreciation.
> 
> That's $14 a year.  Which conveniently is exactly what you can rent the points for from David.
> 
> So you could achieve the same room size and dates of vacation for the same points writing a single $14 a point x points check each year.  Or you could go go tomandrobin and rent them for $11-12 a point.



That seems a little riskier than owning to me. I think a guaranteed 7% return on investment is generous. Then you need to factor in the tax on that investment income. What about the property tax deduction for owning points. It's pretty insignificant for the amount of points I own, but may not be for some.

Also, what value do you place on being able to control your reservations. If you rent through David's, there is a no refund policy. Add vacation insurance to that rental cost.

I think someone who purchases DVC with the intention of renting out points to make a profit needs to be more concerned about potential investment loss on the initial purchase. I think you've done a good job of showing that.


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## heathpack

FYI the financial analysis is mine, not Michaels.


However I don't *really* think that you can actually say in 20 years you have a 7% return on your initial investment with the hotel scenario- I just put that there because everyone seems to feel like you need to look at this factor. So I was trying to make the point that even when you factor in the cost of money, DVC comes out ahead.

But here's why I think that's not valid and that DVC ownership can beat other options cost-wise:
I have a pot of money, say $8000. I'm going to earmark that money one way or another for vacations.  I can buy DVC, lose all investment opportunity and then pay another $350-$500/yr in MF (gradually escalating over time).  Or I can decide to use that money gradually over time for vacations. Year 1 I want to stay at the Grand Californian hotel for 4 nights, so I take $1200 out of my pot of money.  That leaves me with $6800.  I earn 7% on that, giving me $7200.  Year 2, I pull another $1200 out to stay at Grand Cal.  I keep the remaining $6000 invested earning 7%, and my pot is worth $6350.  And so and and so forth.  Eventually my pot of money is gone at about the 7 year mark.  Then I have zero return and I'm stuck paying prevailing hotel prices for the remaing 13 years of our scenario.

The "lost" return on the original $ outlay is only a factor IMO if you are willing to delay taking any vacations until the end of the 20 year period.  And none of us are going to do _that._

H


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## SMHarman

heathpack said:


> FYI the financial analysis is mine, not Michaels.
> 
> 
> However I don't *really* think that you can actually say in 20 years you have a 7% return on your initial investment with the hotel scenario- I just put that there because everyone seems to feel like you need to look at this factor. So I was trying to make the point that even when you factor in the cost of money, DVC comes out ahead.
> 
> But here's why I think that's not valid and that DVC ownership can beat other options cost-wise:
> I have a pot of money, say $8000. I'm going to earmark that money one way or another for vacations.  I can buy DVC, lose all investment opportunity and then pay another $350-$500/yr in MF (gradually escalating over time).  Or I can decide to use that money gradually over time for vacations. Year 1 I want to stay at the Grand Californian hotel for 4 nights, so I take $1200 out of my pot of money.  That leaves me with $6800.  I earn 7% on that, giving me $7200.  Year 2, I pull another $1200 out to stay at Grand Cal.  I keep the remaining $6000 invested earning 7%, and my pot is worth $6350.  And so and and so forth.  Eventually my pot of money is gone at about the 7 year mark.  Then I have zero return and I'm stuck paying prevailing hotel prices for the remaing 13 years of our scenario.
> 
> The "lost" return on the original $ outlay is only a factor IMO if you are willing to delay taking any vacations until the end of the 20 year period.  And none of us are going to do _that._
> 
> H


Apologies, I updated my posts to reflect.
Your math above misses the MF cashflow and the accounting consideration of the depreciation of your DVC points (as they are RTU)

Just on cashflow.  On Y1 your 4 nights in the GF are $1200.
Your 8000 is now $8560.  Your MF you didn't need to write a check for are $425.  So the pull from the savings is 1200-425= 775 which leaves the savings with $7785 not $6800 and so on which results in a far slower depletion of funds.  

If you went on to account for the depreciation and pulled $190 from current cashflow to account for the replacement of the DVC points in 48 years then the pull from savings takes it to a $7975 balance in the savings account.  Only $25 below where you started the year.


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## heathpack

SMHarman said:


> Apologies, I updated my posts to reflect.
> Your math above misses the MF cashflow and the accounting consideration of the depreciation of your DVC points (as they are RTU)
> 
> Just on cashflow.  On Y1 your 4 nights in the GF are $1200.
> Your 8000 is now $8560.  Your MF you didn't need to write a check for are $425.  So the pull from the savings is 1200-425= 775 which leaves the savings with $7785 not $6800 and so on which results in a far slower depletion of funds.
> 
> If you went on to account for the depreciation and pulled $190 from current cashflow to account for the replacement of the DVC points in 48 years then the pull from savings takes it to a $7975 balance in the savings account.  Only $25 below where you started the year.



Ok, point taken.  Maybe the easiest thing to do is consider that 1 years MF for my contract at VGC is approx equal to 1 nights stay. Assuming MF rise at same pace as hotel rates, you can discount the amt spent per year by the MF costs. Thus, you only need to pay for approx 3 nights hotel stay per year out of your $8000 pot of money, instead of 4. The 4th hotel night comes from the same pool of money that your MF would have if you bought DVC. 

Beginning of Year 1: 8000
3 Nights VGC: 900
Remainder: 7100
Invest at 7%, end of year 1: $7600

Beginning of year 2: $7600
4 Nights VGC: $900
Remainder: $6700
Invest at 7%, end of yr 2: $7200

Beginning of year 3: $7200
4 nights VGC: $900
Remainder: $6300
Invest at 7%, end of yr 3: $6700

Beginning of year 4: $6700
4 nights VGC: $900
Remainder: $5800
Invest at 7%, end of yr 4: $6200

Beginning of year 5: $6200
4 nights VGC: $900
Remainder: $5400
Invest at 7%, end of yr 5: $5800

Beginning of year 6: $5800
4 nights VGC: $900
Remainder: $4900
Invest at 7%, end of yr 6: $5200

Beginning of year 7: $5200
4 nights VGC: $900
Remainder: $4300
Invest at 7%, end of yr 7: $4600

Beginning of year 8: $4600
4 nights VGC: $900
Remainder: $3700
Invest at 7%, end of yr 8: $4000

Beginning of year 9: $4000
4 nights VGC: $900
Remainder: $3100
Invest at 7%, end of yr 9: $3300

Beginning of yr 10: $3300
4 nights VGC: $900
Remainder: $2400
Invest at 7%, end of yr 10: $2500

Beginning of year 11: $2500
4 nights VGC: $900
Remainder: $1700
Invest at 7%, end of yr 11: $1800

Beginning of year 12: $1800
4 nights VGC: $ 900
Remainder: $900
Invest at 7%, end of yr 12: $960

Beginning of year 13: $960
4 nights VGC: $900
Remainder: $60
You are done at beginning of year 14

Invest-your-money-stay-in-hotel-don't-buy-DVC strategy: 14 years of vacation, need to pay for remaining 6 years at $1200/yr or approx $7000 more than DVC. Of course these calculations are rough, and could be off by a few years. You might not make 7% in the stock market. Hotel rates could rise more than MF. VGC resale values could be terrible in 20 years. No one can really predict, either way it's an educated guess at best.

If your pot of money runs out in 12 years instead of 14, DVC ownership comes out ahead by $9600

If your pot of money runs out in 18 years, DVC ownership comes out ahead by $2400

If your pot of money runs out in 20 years, it's a wash

Pot empty in 25 years? Hotel beats DVC by $6000

And so on...

H


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## capjak

My purchase of SSR at $63 per point with 150 points banked for 2013 (total 300 for 2013 and 150 forward) was NOT bought by Disney.  So I own 300 points now (150 BCV and 150 SSR).


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## tomandrobin

capjak said:


> My purchase of SSR at $63 per point with 150 points banked for 2013 (total 300 for 2013 and 150 forward) was NOT bought by Disney.  So I own 300 points now (150 BCV and 150 SSR).



Congrats! Not a bad deal at all.


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## lizap

The cost of capital would not be 6% for a lot of people as this $ would be parked in a money market or short-term CD paying next to nothing...





SMHarman said:


> But if the purchase is not financed then you need to factor in the cost of not investing that money as Michael did.  He used 7% which is a reasonable rate.  The 5 year S&P 500 return is 5.91% (per year) today.  That is your cost of capital, what you are not earning by using your savings, vs what you are paying for borrowing.
> So, for every $100 you spend on DVC points you have to factor in that if you had invested the $100 it would be $106 a year later.  That $6 is a cost you should factor into ownership.
> In 48 years your $100 S&P investment should still have value (in fact, with income reinvested, it should be worth 100*1.06^48 which is $1639).  This is that math question of would you take $100 today or $1638 in 48 years time.  The answer is, it does not matter as the value is the same.
> Your DVC RTO will be worth 0 so the DVC ownership as an investment acts more like an annuity than an investment.
> 
> So lets say you bought at $100 a point (WAG as I don't know what you paid).
> That point is costing you $6 in lost investment return (if you financed insert interest rate here)
> That point is costing you $4.73 (say $5) in MF
> That point with straight line depreciation is costing $2 a year. (I think that is your $1.80 a point).
> 
> So that point is costing you about $13 a year with all costs fully baked in.
> As heathpack said, 85 points gets him what he wants.  85*13/4=276 a night.
> As heathpack has kindly helped me understand, there are also the benefits of discount passes and other benefits to consider (the reason many like to own small points packages).
> 
> My number is different to his as I hold to maturity (when RTU expires).  I thiink the correct model is to sell DVC within a 10-20 year time while the buyer is not considering the expiration of the RTU.  In the 2040's-2050's the DVC points will be an interesting value proposition as they should price more like a short term lease, where the purchase price less MF is more aligned with a discounted room rate.


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## SMHarman

lizap said:


> The cost of capital would not be 6% for a lot of people as this $ would be parked in a money market or short-term CD paying next to nothing...


Lisap, this is confusing todays rate with the long term average rate, just because I lost money on the stock market today does not mean the stock market is a losing proposition.
http://www.bankrate.com/finance/cd-rates-history-0112.aspx






Shows the CD rates from 1984 to 2012.
If I was writing this post on the pre internet back in 1984 you would be telling me the 6% was too low.  In the 90's you would be telling me it is about right and over the 30 years that average rate of return on a CD is probably around 6%.


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## MichaelColey

Another way of looking at it...

If you have a mortgage and are paying around 6% interest on it, I would contend that your "opportunity cost" of a timeshare purchase is (at least) 6%, because you could have used that money to pay down your mortgage.

A 6% (or larger) return isn't hard to get in the stock market, over a longer period of time.  For instance, investing in a mutual fund that mirrors the S&P 500 averages more than that over a longer period of time.


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## SMHarman

MichaelColey said:


> Another way of looking at it...
> 
> If you have a mortgage and are paying around 6% interest on it, I would contend that your "opportunity cost" of a timeshare purchase is (at least) 6%, because you could have used that money to pay down your mortgage.
> 
> A 6% (or larger) return isn't hard to get in the stock market, over a longer period of time.  For instance, investing in a mutual fund that mirrors the S&P 500 averages more than that over a longer period of time.


Both are measures you and I took in the initial math.  I was trying to highlight to Lisap that just because todays CD is near 0 it does not make the historic average cost of cash sitting in the bank risk free (the risk free rate) 0.


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## lizap

The cost of capital would be person specific.  To those that would put this money in the stock market, it might be near 8%, to those that would pay down their mortgage, it might be near 2.75%, or to those that would park their money in a money market, it might be near 0%... The cost of capital would not be the long-term stock market average for many as they would not invest their TS $ here.  Also, you are assuming that future stock market returns are going to resemble those of the past, which is a dangerous assumption at today's market levels..  Bottomline, as you know, TSs can financially work (can recoup cost in a reasonable time and save $ on future trips) for you, me, or anyone else, if you strategically plan your trips, although DVC is harder to justify given the price and what you can rent points for...



SMHarman said:


> Lisap, this is confusing todays rate with the long term average rate, just because I lost money on the stock market today does not mean the stock market is a losing proposition.
> http://www.bankrate.com/finance/cd-rates-history-0112.aspx
> 
> 
> 
> 
> 
> 
> Shows the CD rates from 1984 to 2012.
> If I was writing this post on the pre internet back in 1984 you would be telling me the 6% was too low.  In the 90's you would be telling me it is about right and over the 30 years that average rate of return on a CD is probably around 6%.


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