Timeshare involvement with Net Worth

[JustNeedSomeInfo]

I have two questions I was hoping that I could receive some help with. A little history, my family received a 48 year timeshare with Disney as a prize offered by a company doing a contest. The timeshare allowed there to be 4 total equal owners of the timeshare. The timeshare was valued at roughly 3 million USD if I remember correctly. My first question is, when attempting to find my true net worth, do I or do I not include the value of the timeshare in my calculation? And if so, then is that value split 4 ways, due to there being four technically equal owners? Any help is appreciated, thanks.

 

[paxsarah]

In the vast majority of cases, if someone were including the actual value of a timeshare they owned in a calculation of their net worth, that value would be close enough to zero that they might as well leave it off the list. Most timeshares are more of a liability (due to ongoing maintenance fee obligations) than an asset.

DVC ownership, if that is what you have, actually does have some resale value, though nowhere near $3 million. Not knowing exactly what you own it's hard to say, but a DVC ownership could have a value of tens of thousands of dollars. Even then, I'm not sure I'd include it in the calculation of my net worth.

 

[JustNeedSomeInfo]

In the vast majority of cases, if someone were including the actual value of a timeshare they owned in a calculation of their net worth, that value would be close enough to zero that they might as well leave it off the list. Most timeshares are more of a liability (due to ongoing maintenance fee obligations) than an asset.

DVC ownership, if that is what you have, actually does have some resale value, though nowhere near $3 million. Not knowing exactly what you own it's hard to say, but a DVC ownership could have a value of tens of thousands of dollars. Even then, I'm not sure I'd include it in the calculation of my net worth.

Thank you for the information! Not sure of the total value of the actual timeshare, I just know they had quoted the buy out value around that number just because of the amount of years it was valid for. There are no maintenance fees associated with it, that is entirely paid for by Disney themselves in this specific case. I know its kind of a weird set of questions to ask so I thought I would ask because it couldnt hurt.

 

[jules54]

If you want a realistic net worth do not include it. Timeshare is mostly considered a debt/liability not an asset because you have to pay yearly or weekly maintenance fees on it. The resale of a timeshare is very low. Yours might be resale able because it’s a Disney product. Saying the timeshare is valued at 3 million is crazy. That’s like saying a 300,000 home is worth 300 million. If your doing your net worth to apply for any type of mortgage don’t use the timeshare.

Now if your just doing your Net Worth for fun sure ad it. Better divide it by 4. Of course it’s only for fun. Like saying a 2,000 20 year old car is worth 2 million.

 

[Timeshare Von]

$3M value? We should start there! How is *THAT* even possible?

 

[jules54]

BTW you picked the right information site. Welcome to TUG. I’ve never run across the type of membership your describing. Has anyone actually used a week yet? If not you may find out there are hundreds of dollars worth of fees when you go to actually book. Keep us updated

 

[sue1947]

A little history, my family received a 48 year timeshare with Disney as a prize offered by a company doing a contest.
AND
There are no maintenance fees associated with it, that is entirely paid for by Disney themselves in this specific case.

I suspect you don't own at Disney at all, but rather a vacation club that claims access to Disney properties via RCI. If so, your cost would be in payment when you make a reservation. I also suspect you will find that making that reservation will be more difficult that was told to you.
We need more details. What you have posted makes no sense otherwise. The $3million value over 48 years is $62,500/year. Who actually pays that much for a trip to Disney or anywhere? every year? Clearly, it's been inflated to get people to accept this 'prize'. The part about Disney paying the MF also makes no sense. They have no problem selling so have no incentive to give away, especially without MF. Have you accepted this gift yet?

 

[JustNeedSomeInfo]

To clarify, (Sorry for being bad with this stuff, decently new to me), the buy out value that they were saying pertains to the value of the yearly point cost x the years that it applies for. I.e. - Cost per point ($193) x 300 (the point amount given each year) = $57,900 'times' the amount of years it applies for (48 years) = $2,779,200. As far as closing cost go and annual dues go, Disney has taken care of all of those and will continue to with. The prize was won a few years back (American funniest home videos actually - via email entry they used to do.) The original prize was awarded to my grandmother and when she passed it was then transferred to myself (recently) and other family members. They have already taken multiple trips since then and have had to pay no cost (excluding ticket cost which are discounted only).

 

[sue1947]

Looking at resale listings for 300 points, it looks like it is worth somewhere between $20,000-$40,000 depending on which resort. If your's isn't tied to a specific resort, than go with the high side. In other words, about 1% of what was quoted.

 

[PigsDad]

To clarify, (Sorry for being bad with this stuff, decently new to me), the buy out value that they were saying pertains to the value of the yearly point cost x the years that it applies for. I.e. - Cost per point ($193) x 300 (the point amount given each year) = $57,900 'times' the amount of years it applies for (48 years) = $2,779,200.

That isn't how you value it. When one buys a timeshare (Disney, in this case), there is a one-time purchase price for the deed. And yes, $193/point is a likely value for a retail purchase of Disney Vacation Club. But one does not need to pay that each year, only when they purchase it the first year. So the retail value was probably $57,900, not almost $3M. But that is the retail value -- to determine the actual value (i.e., what you could sell it for today), you really need to look at sales on the secondary market. Hope this all makes sense.

As far as closing cost go and annual dues go, Disney has taken care of all of those and will continue to with. The prize was won a few years back (American funniest home videos actually - via email entry they used to do.)

Well, that sounds like a fantastic prize your grandmother won! Since the annual maintenance fees are included, to really get a good estimate of the "value" of the prize, it would be the resale value of the deed (see above) plus the value of the annual maintenance fees, discounted to current cash value. Depending on which property the 300 points is deeded, the annual maintenance fees run from ~$6.50 - $9.50 per point per year.

Kurt

 

[Iggyearl]

I don't think some of the above posters are hearing what was said. The OP states that "they" own 300 Disney points with all maintenance fees paid. For 48 YEARS!! NO COST TO THE FAMILY! WOW - what a prize. I think an accountant would need to do a "present value" calculation to value it. Whether it is transferable may affect the value. It is still a great possession.

 

[JustNeedSomeInfo]

Thank you all for the information! It has helped me out a lot, and at least give me a general idea of what to look into and consider. Like I said, Im kinda starting from scratch with figuring out all of this stuff.

 

[JudiZ]

Wow! Congratulations. Great prize! I think, that as several have posted, the real value is not what the "package" was actually worth but who cares? It would be "worth millions" to me to be able to take my family on a Disney vacation at DW every year!

 

[Janann]

Whether it is transferable may affect the value.

I bet that somewhere in the fine print is a condition that says it can't be sold on the open market. It has already been transferred within the family which shows it can be re-titled. Maybe as long as no payment "officially" changes hands it remains a valid contract.

Congratulations to the OP on this prize! When the question was first posted I thought someone had a terrible misunderstanding of their ownership structure.

 

[bizaro86]

Assuming you have 300 dvc points with no maintenance, I agree that is a great prize.

Without further details (eg home resort) it's hard to be too specific, but I suggest the following.

300 points x $100/point resale value

+

300 points x $7/point MF saved / 0.05 (rough NPV factor)

That comes to $72,000. It's not $3MM, but that is still a great prize.

 

[Timeshare Von]

Doesn't the US Federal government require prize winners to pay TAXES on the value of the prize? If so, that inflated $3M price tag matters!