Finding the unicorn- Subsidized Aulani

[flipflopmom]

I've been stalking for a June UY subsidized for months. Recent months have been mostly March and Feb. Another few months of this and I'd consider March.

Glad you said this. I’m stalking too, and have a June UY as well. Now I know which months to look for.

 

[DianaMB333]

Following… tks

 

[ofcabbagesandkings]

Wow so stripped! I saw another one a few weeks ago on another site but it was also pretty stripped (2024 points only) and asking too much per point in my opinion. I know the overall savings might end up being greater depending on how long you hold the contract, but it's hard to stomach paying more than $130 per point when Aulani contracts are regularly going for $99 or less right now. But I'm clearly the only one who feels that way because it had an offer accepted within a week.

 

[kboo]

Wow so stripped! I saw another one a few weeks ago on another site but it was also pretty stripped (2024 points only) and asking too much per point in my opinion. I know the overall savings might end up being greater depending on how long you hold the contract, but it's hard to stomach paying more than $130 per point when Aulani contracts are regularly going for $99 or less right now. But I'm clearly the only one who feels that way because it had an offer accepted within a week.

The blurb on the listing was like, "you'll save $27000 on dues for the life of the contract" - setting aside the inexact math etc etc, I still don't know if it's worth paying ~$10k up front to save 27k over 40 years. while not having points to use for 2 years. While paying dues.

 

[Great3]

The blurb on the listing was like, "you'll save $27000 on dues for the life of the contract" - setting aside the inexact math etc etc, I still don't know if it's worth paying ~$10k up front to save 27k over 40 years. while not having points to use for 2 years. While paying dues.

This is where you negotiate a dues credit back at closing for the missing 2024 points, that is higher than the current due by 5-10% to cover the inevitable rise in MF dues. This is in addition to negotiating the price per point.

Great3

 

[Sandisw]

We do not allow people to link or share details to contracts for sale. I have deleted several posts.

 

[kboo]

We do not allow people to link or share details to contracts for sale. I have deleted several posts.

oops, sorry. Thought that since it was for sale w the board sponsor it would be ok.

 

[intamin]

One thing the board sponsor does well is at least filter by special filters including subsidized dues and guaranteed weeks. I've found it very difficult to navigate through other brokers and find out which contracts are actually subsidized.

 

[emchen]

https://resales.*******.com/
The Aulani Page shows several large (>400 pts) subsidized contracts pending. Who says they are nearly impossible to sell??

 

[DanCali]

https://resales.*******.com/
The Aulani Page shows several large (>400 pts) subsidized contracts pending. Who says they are nearly impossible to sell??

The link got erased but I think I saw those when they were on sale. Was one of them a fixed week New Year's week (~477 points IIRC)? $60K is a pretty big expense, but for those who want low dues and are ok with the 7-month window (or just want to go to Oahu often) it gives them a decent amount of cheap currency. It's easier to spend the money in smaller chunks, but it does add up regardless of how long it takes one to accumulate hundreds of points!

It's tempting to think that paying an extra $30-$40 per point is not worth it because you save $2.3/year so it takes ~15 years to "break even". I find that somewhat of an oversimplification because the extra expense upfront of $30-$40 per point is not really unrecoverable. If the person sells the contract 10 years down the road, they will still sell it for a higher price than a non-subsidized contract (maybe still $30-$40 more) and, in the meantime, they paid lower dues for 10 years. Don't forget that, with a 25% dues discount and with dues going up annually, the value of the subsidy also increases annually in dollar terms. For example, if Aulani dues were $12/point, the subsidized dues will be $3 less - so now paying a $30/point premium is only a 10-year "break even". Ther is a lot of value in 40 years of subsidized dues...

We did buy a subsidized Aulani contract (mostly for 7-month bookings) but only about 200 points. If I lived on the West Coast and visited Oahu more often, I would have considered that 400+ point purchase and would have been willing to pay the asking price. But, despite my handle, we're on the east coast now and Hawaii is a rare trip... We also tend to prefer Kauai over the other islands.

 

[emchen]

The link got erased but I think I saw those when they were on sale. Was one of them a fixed week New Year's week (~477 points IIRC)? $60K is a pretty big expense, but for those who want low dues and are ok with the 7-month window (or just want to go to Oahu often) it gives them a decent amount of cheap currency. It's easier to spend the money in smaller chunks, but it does add up regardless of how long it takes one to accumulate hundreds of points!

It's tempting to think that paying an extra $30-$40 per point is not worth it because you save $2.3/year so it takes ~15 years to "break even". I find that somewhat of an oversimplification because the extra expense upfront of $30-$40 per point is not really unrecoverable. If the person sells the contract 10 years down the road, they will still sell it for a higher price than a non-subsidized contract (maybe still $30-$40 more) and, in the meantime, they paid lower dues for 10 years. Don't forget that, with a 25% dues discount and with dues going up annually, the value of the subsidy also increases annually in dollar terms. For example, if Aulani dues were $12/point, the subsidized dues will be $3 less - so now paying a $30/point premium is only a 10-year "break even". Ther is a lot of value in 40 years of subsidized dues...

We did buy a subsidized Aulani contract (mostly for 7-month bookings) but only about 200 points. If I lived on the West Coast and visited Oahu more often, I would have considered that 400+ point purchase and would have been willing to pay the asking price. But, despite my handle, we're on the east coast now and Hawaii is a rare trip... We also tend to prefer Kauai over the other islands.

Ok, I'm not saying I'm the one who bought the referenced contract for $127/pt, after offering $120 for the $135/pt list price. But I'm just speculating what would be going through my mind in a situation like that. For the record, I am one of those, "who [would] want low dues and [am] ok with the 7-month window...".

...to be continued...

 

[emchen]

It's tempting to think that paying an extra $30-$40 per point is not worth it because you save $2.3/year so it takes ~15 years to "break even". I find that somewhat of an oversimplification because the extra expense upfront of $30-$40 per point is not really unrecoverable. If the person sells the contract 10 years down the road, they will still sell it for a higher price than a non-subsidized contract (maybe still $30-$40 more) and, in the meantime, they paid lower dues for 10 years. Don't forget that, with a 25% dues discount and with dues going up annually, the value of the subsidy also increases annually in dollar terms. For example, if Aulani dues were $12/point, the subsidized dues will be $3 less - so now paying a $30/point premium is only a 10-year "break even". Ther is a lot of value in 40 years of subsidized dues...

For background and context, I already own a 217 pt Aulani (subsidized) contract from 2019. This year I rented out points from it for the first time and noted that it was easier than I thought to rent out (@ $18/pt to me). I decided to run some numbers on the spreadsheet.

What was going through my mind: 1. how long to break even by renting out? (A: 11 yrs for the referenced big contract and 10 yrs for my current one); 2. how many years left on the contract from the time I take ownership? (A: 38); 3. how many years after break even do I have on the contract? (A: 27). 4. how much return on initial capital cost if I rented out all 27 years? (A: 2.37x). ***DVC is NOT an investment*** and this is NOT investment advice.

I agree there is a lot of value in 40 (even 38) years of subsidized dues...add the oft-overlooked fact that other "cheap currency" (as you put it) aren't nearly as popular to rent out in the 11-month window compared to Aulani. Talk about added value!

Anyways, the above is all just speculation and me thinking out loud. That said, would you ever consider buying a subsidized Aulani contract to defray the cost of other contracts and annual dues? If yes, can you see yourself crossing over and start "investing" in subsidized Aulani contracts and take profit over a long period of time?

My answer for the first question is "yes" because it is organic and a way to defray cost within DVC ecosystem. For the second, it is probably "no" (i'm pretty sure $60K in TSLA will probably outperform but I can't have as much fun with stock). So ***DVC is NOT an investment*** remains a first principal.

 

[DanCali]

For background and context, I already own a 217 pt Aulani (subsidized) contract from 2019. This year I rented out points from it for the first time and noted that it was easier than I thought to rent out (@ $18/pt to me). I decided to run some numbers on the spreadsheet.

What was going through my mind: 1. how long to break even by renting out? (A: 11 yrs for the referenced big contract and 10 yrs for my current one); 2. how many years left on the contract from the time I take ownership? (A: 38); 3. how many years after break even do I have on the contract? (A: 27). 4. how much return on initial capital cost if I rented out all 27 years? (A: 2.37x). ***DVC is NOT an investment*** and this is NOT investment advice.

I agree there is a lot of value in 40 (even 38) years of subsidized dues...add the oft-overlooked fact that other "cheap currency" (as you put it) aren't nearly as popular to rent out in the 11-month window compared to Aulani. Talk about added value!

Anyways, the above is all just speculation and me thinking out loud. That said, would you ever consider buying a subsidized Aulani contract to defray the cost of other contracts and annual dues? If yes, can you see yourself crossing over and start "investing" in subsidized Aulani contracts and take profit over a long period of time?

My answer for the first question is "yes" because it is organic and a way to defray cost within DVC ecosystem. For the second, it is probably "no" (i'm pretty sure $60K in TSLA will probably outperform but I can't have as much fun with stock). So ***DVC is NOT an investment*** remains a first principal.

For background and context in my case, we're new to DVC but own several traditional Marriott and Westin weeks so it wasn't too hard to adapt. Within a few months we're already with 2 use years and 350-400 points in each of those use years (4 resorts/contracts, both direct and resale). My wife thinks we're done

As someone taking a fresh look at this, I did find the Aulani subsidized contract attractive for reasons mentioned in my prior post. Frankly, I would pay more than a ~30% premium for them over non-subsidized. But the amount we bought would barely cover 4 nights a year in a 1BR (we'd prefer at least that for longer trips - studios are more tolerable for WDW 2-3 night stays) so it's not an "investment" to me.

If I was just in the DVC world, I think my answer to your question ("would you consider buying a subsidized Aulani contract to defray the costs of other contracts and annual dues") would likely be "yes". I'll rent what we don't use, but there are much more attractive opportunities to do that in the Marriott/Westin world where we own some weeks that have dues of $1600 and I can rent those weeks for $3600/year, and the upfront cost to buy the (perpetual) deeds is $8K-$10K. That's a 4-5 year breakeven period, or a 20%-25% annual "return on investment."You can't get anywhere near that with the high cost of entry at DVC.

Regarding your second question about "investing" in Aulani contracts and taking profit over a long period of time, my answer would be "no" for the same reason stated in the prior paragraph. Moreover, in the relatively short time I've been monitoring these contracts I've seem a couple of owners who were in a very good position to do this (owning lots of subsidized Aulani points) and they seem to be divesting, which makes me think it's harder than it looks.

 

[DanCali]

...add the oft-overlooked fact that other "cheap currency" (as you put it) aren't nearly as popular to rent out in the 11-month window compared to Aulani.

I'll just add that it seems you refer to "cheap currency" as that have a low upfront cost per point. My reference to "cheap currency" actually related more to the annual dues - which would include resorts like VGF, BLT and AUL (subsidized) with low dues in the same ballpark. I'm not sure that AUL is easier to rent than those MK monorail resorts, but I haven't tried.

With DVC, due to the expiring deeds, it may make more sense to think of an all-in annual cost number where you amortize the upfront cost over the remaining years on the contract and add that to the annual dues number. In that case a $90/point OKW 2042 contract is currently costing you $9.40 in annual dues + $5 a year in amortization ($90 over 18 years) and a $145/point BLT 2060 contract is currently costing you $7.40 in annual dues + $4 a year in amortization ($145 over 36 years).

 

[emchen]

With DVC, due to the expiring deeds, it may make more sense to think of an all-in annual cost number where you amortize the upfront cost over the remaining years on the contract and add that to the annual dues number. In that case a $90/point OKW 2042 contract is currently costing you $9.40 in annual dues + $5 a year in amortization ($90 over 18 years) and a $145/point BLT 2060 contract is currently costing you $7.40 in annual dues + $4 a year in amortization ($145 over 36 years).

I’ve calculated an “all-in annual cost” on my contracts but what additional info can I glean from it? What do you usually do with that data?

ELC

 

[DanCali]

I’ve calculated an “all-in annual cost” on my contracts but what additional info can I glean from it? What do you usually do with that data?

ELC

I think it can help compare the costs of buying/owning at resorts on a more "apples to apples" level. For example, OKW expires 2042, has a low cost to buy the points (resale) but has high dues. BLT expires in 2060, has lower dues and a higher cost to buy resale. How do you compare the two?

One could say OKW is $90 and BLT is $145 and the difference in dues is $2 and conclude that OKW is a better deal because it will take a whopping 27 years to break even due to the lower annual dues. But that doesn't account for the fact that OKW actually expires in 18 years and BLT expires in 36 years.

If you look at the numbers in my prior post the "all in cost" of $11.40 at BLT is lower than the all-in cost of $14.40 at OKW 2042. That's both because of lower dues and because it has double the life but costs only 60% more to buy (based on my example). It doesn't matter if you don't hold the contracts to expiration. In 18 years OKW will be worthless but BLT will have a residual value you can sell it at reflecting the 2060 expiration.

 

[sipnride]

https://resales.*******.com/
The Aulani Page shows several large (>400 pts) subsidized contracts pending. Who says they are nearly impossible to sell??

Nobody. Impossible to find and purchase otoh...

 

[emchen]

I think it can help compare the costs of buying/owning at resorts on a more "apples to apples" level. For example, OKW expires 2042, has a low cost to buy the points (resale) but has high dues. BLT expires in 2060, has lower dues and a higher cost to buy resale. How do you compare the two?

One could say OKW is $90 and BLT is $145 and the difference in dues is $2 and conclude that OKW is a better deal because it will take a whopping 27 years to break even due to the lower annual dues. But that doesn't account for the fact that OKW actually expires in 18 years and BLT expires in 36 years.

If you look at the numbers in my prior post the "all in cost" of $11.40 at BLT is lower than the all-in cost of $14.40 at OKW 2042. That's both because of lower dues and because it has double the life but costs only 60% more to buy (based on my example). It doesn't matter if you don't hold the contracts to expiration. In 18 years OKW will be worthless but BLT will have a residual value you can sell it at reflecting the 2060 expiration.

OK sure! Yes just like the "Most Economical DVC Resorts" I've seen at some of the resale websites.

Question: do you and others try to drive down your "all-in cost" by renting out points? I estimate renting out once every 3-4 years all 477 points on the subject contract will allow break even through the life of the contract.

 

[sipnride]

OK sure! Yes just like the "Most Economical DVC Resorts" I've seen at some of the resale websites.

Question: do you and others try to drive down your "all-in cost" by renting out points? I estimate renting out once every 3-4 years all 477 points on the subject contract will allow break even through the life of the contract.

I see it more as I'm not going to all my points every single year, and so I factor in how those years will subsidize the others.

 

[emchen]

Has anyone here ever seen a subsidized Vero Beach Resort contract for sale?