Best Economical DVC Resorts to Purchase: Spring 2021

[Duckbug.Ducktales]

by then we'll probably all be drowned because of global warming.

Speak for yourself! We live several hundred miles above sea level
I do worry about FL, though. Lots of family lives there, but more importantly, WDW!

 

[havoc315]

I never put much in to the time of money stuff. I also wouldn't pull out retirement accounts to buy DVC though.

Even if I were breaking it down I did a rough historical run of the numbers based on a AKV purchaser who posted on this forum and by year like 11 they would be out of money.

Buying DVC for me just makes things way more predictable long term. Flip side if I start investing that money and pulling a portion out now I need to worry about yearly market fluctuations, taxes on money being pulled out, increases to DVC rentals, and lack of control on the points.

Also time of money I think is offset by not needing to buy another contract in 20-30 years. And lets be honest this math also completely ignores what happens when your contract expires or when you sell (which you will get more from AKV in 2038 then you will from BWV).

All excellent points, which is why I wouldn't get bogged down into which resort is 4% of a better value, etc. In the end, this is a commercial product you are buying, not an investment.
I'm buying multiple vacations at once, deep into the future. And I'm getting a bulk discount. The precise size of the discount will depend on multiple factors, but I'm not going to lose sleep about whether I fully maximized that discount or not.

While I would not get bogged down in small differences -- the last sentence is a key point and makes for more than small differences.
Assuming many many people hold on to DVC for 10-20 years... Come 2035-2040, the 2042 contracts will have very limited value. While the 2057-later contracts are far far more likely to retain significant value. Which is why I would avoid 2042 contracts at this point.

I view the cycle like this: Buy in year 0 ---> year 13-14, very strong re-sale value, still a "newish" resort with a long life ahead --> next owner looks to sell at year 26-28 --BCV/BRV/BEV are already slightly passed this point --- still a strong market for the resort, but some buyers starting to avoid because of the relatively short remaining contract ---> if that owner tries to sell at year 39-42, they will certainly find significantly diminished value... and that buyer can't really hope to re-sell at all.

 

[Duckbug.Ducktales]

I view the cycle like this: Buy in year 0 ---> year 13-14, very strong re-sale value, still a "newish" resort with a long life ahead --> next owner looks to sell at year 26-28 --BCV/BRV/BEV are already slightly passed this point --- still a strong market for the resort, but some buyers starting to avoid because of the relatively short remaining contract ---> if that owner tries to sell at year 39-42, they will certainly find significantly diminished value... and that buyer can't really hope to re-sell at all.

What I'm hearing from this is that we should aim to have kids by like 2030ish then buy a bargain BCV contract in 2032ish so they can enjoy Stormalong Bay until the contract expires. Great idea!

 

[MomOTwins]

Yes, I think when people hear 20 years it sounds so far out there most people don't really see a difference from 30 or 40. Once we get under 15 years and people start realizing they can't resell it when they are done using after 10 years prices will drop fast.

Exactly. One of the reasons we decided against 2042 resorts is that we expect we’ll use DVC for at least 20 years. So if we bought there, in 2042 our contract will be gone. If we bought at a resort with a longer contract, we could sell and at least get back some of what we put in, which is a nice little subsidy against the total cost.

 

[Louis morrell]

WOW, you guys really spend a lot of time analysing this stuff. I just bought DVC because I will have at the very least 1 trip per year to Disney World to look forward to. Good knows at my age there isn't much else to look forward to.

 

[havoc315]

What I'm hearing from this is that we should aim to have kids by like 2030ish then buy a bargain BCV contract in 2032ish so they can enjoy Stormalong Bay until the contract expires. Great idea!

Sounds about right. Calculate the rental costs, subtract the annual dues, apply a 20-30% discount, should give you approximate fair cost.

So if points are renting for $18 per point, approximately (as now), with dues of about $8 per point... with 9 years left on contract, a fair price would be about $75 per point. Much more than that, I’d just rent.

Wait for kids to get out of diapers... purchased with only 5 years left on contract..fair purchase price of about $40 per point.

 

[MomOTwins]

Sounds about right. Calculate the rental costs, subtract the annual dues, apply a 20-30% discount, should give you approximate fair cost.

So if points are renting for $18 per point, approximately (as now), with dues of about $8 per point... with 9 years left on contract, a fair price would be about $75 per point. Much more than that, I’d just rent.

Wait for kids to get out of diapers... purchased with only 5 years left on contract..fair purchase price of about $40 per point.

Given how crazy high resale prices are right now though, I kind of wonder if in 10 years they might still be just as high at the 2042 resorts. It seems like people really are willing to keep buying these contracts no matter what, especially when you factor in that prices have gone up since they took away blue card status for resale.

 

[havoc315]

Given how crazy high resale prices are right now though, I kind of wonder if in 10 years they might still be just as high at the 2042 resorts. It seems like people really are willing to keep buying these contracts no matter what, especially when you factor in that prices have gone up since they took away blue card status for resale.

As you get closer to expiration, the math will be easier to do, leading to more rational decisions.

Taken to the extreme... imagine it’s 2039. You are buying only buying 2040 and 2041 use year points. dues are $10 per point. Rental rates are $21 per point.

So you could rent for 2 years for $42 per point total.

But if you buy:
you are paying $20 in dues over the 2 years. And you’re paying closing costs of about $5 per point.

So if you pay more than $17 per point to buy, you’d be losing money.
There aren’t going to be tons of buyers willing to pay $120 per point — which would be a loss of $103 per point.

 

[4luv2cdisney]

Not everyone will rent points. As long as DVC pricing beats cash pricing, there will be buyers. Not everyone is trying to get the cheapest DVC contract, but rather to buy at their favorite home resort because they want to stay there and pay less than cash side.

Short term contracts will be appealing to some people because the buy in will be low and the risk small. It will be a good opportunity for some to try DVC out. Same reason some people really like small point contracts even though the price per point is much higher.

For some, it will be the right timing for a heavy Disney period of their lives (kids 3-16 ish? or newly retired?).

Myself, I'd be really happy to buy a 5-10 year DVC contract. DH will retire in 15 years, but hoping to significantly slow down work-wise in about 10 (at 60). I am younger, but can already travel whenever I want. Anxiously awaiting those rock-bottom BWV prices everyone is promising!

 

[The Prophet]

DVC and "investment" should not be in the same sentence
On January 31, 2042, the older DVC properties will be worth nothing, Resale values will most likely bottom out long before then
If you want to make money from Disney, buy the stock -- up 2% YTD and over 300% the past 10 years

 

[Duck1]

Not a "bad value", just not necessarily "best bang for buck"

1 -- Many people equate value with low point charts.
For OKW, for a room tonight, it would be 14 points for a studio, 29 points for a 1 BR, 40 points for a 2 BR and 61 points for a Grand Villa.
For Grand Floridian, for tonight, 23 points for a standard view studio, 26 points for a lake view studio, 43 points for a standard 1 BR, 54 points for a lake 1 BR, 62 points for a standard 2 BR, 74 points for a lake 2BR, and 149 points for a Grand Villa.

So buying OKW points to use at OKW gives you a lot of space -- And you can get grand villa for the same price as a standard 2 BR at Grand Floridian.
Now, a Grand Floridian villa may be "worth far more than an OKW villa. But you are losing your "bang for the buck" aspect of cheap point chart if you are using those OKW points at Grand Floridian.

2 -- While the re-sale points are definitely much cheaper at OKW than GFV, you can't ignore the dues:
OKW $8.36 in dues, GFV $6.82 in dues. That's a difference of $1.54 per point. If you own 200 points, you're paying $308 extra per year by owning OKW points compared to owning GFV points. Now, considering how much you are saving in initial cost, the $308 per year may not be a big deal, but it does reduce the value. In contrast, SSR dues are just $7.11 per year, and SSR points are about the same price as OKW points.
So if your goal is to use non-GFV points at GFV, then the best "bang for your buck" is to get the cheapest points + cheapest dues.
And this is why SSR points are the best "sleep around" points. (Of course, this is also what causes the 7 month shortage.... I dare say most SSR owners (and OKW) are using the points just to sleep around at 7 months, which is why SSR and OKW are the only resorts that routinely have LOTS of available shorter than 7 months.

Thank you for the explanation!