DVC Podcast - Not Great Advice

On the recent “Resort only stay” DVC show @WebmasterPete said he would stay at Saratoga Springs and is therefore thinking of adding on there, or maybe already has, I’m not sure. But isn’t adding on at SSR for that reason a bit pointless, as there is pretty much always availability there at seven months, so you could own anywhere and still book SSR just as well. No?
 
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Ok, that's a lot of typing.
When they build BLT2 you will not be able to use your BLT points. That's one of the new rules. Points from the Old 14 cannot be used at Riviera, Reflections or whatever comes next.
That's only partially correct...

That is one of the new RESALE restrictions and only applies to RESALE contracts purchased after January 2019(?...not sure on the exact date).
Anyone who was already a BLT owner (or any qualified owner) prior to the implementation of that rule can use their points at the new resorts because they are grandfathered in already.

We bought resale in 2008 and did a direct add-on in 2011 so all of our points are treated as direct. Back then, all points were treated as equal and they did not discriminate between resale and direct purchases. We bought our AKV points for $92/point and since it is a small contract (100 points), we could probably resell it today for $110-$115/point. It's value has gone up by about 20% and I got 10 years of use out of it on top of that. I also own 50 points (direct) at HHI that were bought for $80/point. The resale value of those is probably right around $75-$80, which is what I would expect since they were purchased at "inflated" direct prices. We have been able to stretch our measly 150 points into annual vacations of at least 5 days, usually in 1BR's. Sometimes, we transfer in points from other members to extend our trips, sometimes we stay in studios, and sometimes we pay cash and crash at a value resort for a night or two. We've had some very memorable vacations over the past 10 years. It has come to a point now where the kids are now teenagers and the parks have started to lose their appeal. I can't see the value anymore in spending $2K for 5-day park-hopper tickets only to have to stand in 60-minute lines for everything...unless I've made FastPass plans 2 months in advance which may or may not have worked out, and then we have a schedule that we have to follow...oh, and we also have to work it around the dining reservations that we made too. I think we are done with the parks (as a family) for a while. We will be focusing more on HHI and trying our luck at the 7-month mark with our AKV points. There's no worries about ADR's and FP's down there...and no $500 tickets to buy either:cloud9:.
 
Ok, it may be a rule that applies only to resale purchases of the original 14. So then if then original poster that I was responding to bought his shares NEW for BLT they may be good at new resorts.

For now?

I agree with you that the value isn't there, maybe for different reasons.

Cheers!
Capt Dan
 
Figured I'd throw my two cents in as I have already on the DVC boards. Here are a few points

1) DVC IS an investment. It is not the type of investment that should be looked a way to provide a positive return. Instead, it should be looked at as an investment that provides future discounts on hotel accommodations. Either way, keeping all other things equal, your net-worth should theoretically be higher at the end of the DVC contract than it would have been had you paid cash for those stays. This is the investment.

2) The DVC question SHOULD be a truly financial calculation. Sure, there are a couple of very small non-quantitative value aspects, but in reality this is strictly a financial decision. DVC ownership DOES NOT get you anything tangible that cannot be had without DVC ownership. All it does is gets you those things with an alternate payment structure that can possibly lead to an overall reduction of long term costs.

Note: I know that there are a couple of small benefits like lounge access, or DVC member only cruises, etc.... IMO these are fringe benefits and are not the reason 99.9999999% of the people pay all of that money to buy into DVC.

3) One thing people always forget when they look at things like this (and this includes real estate appreciation as well) is inflation. Just because you bought for $50/point in 1950 and can sell today at $80/point, doesn't mean that your investment appreciated. $50 in 1950 bought a lot more than $80 today. (These are exaggerated numbers for illustration purposes. I know DVC did not exist in 1950. I don't even think Disneyland existed in 1950).

4) There are other ways to do this and get the same vacation experience as DVC offers. If you take every dollar that you would otherwise put into DVC (purchase price, closing costs, annual dues, etc...) and put it into some long term investment (think something like a broad based index fund ETF), you can then withdraw a portion of the money out of this fund every year (or two, or three) and use it to pay for the same hotels either through cash bookings or renting of points. Depending on multiple variables (increase in cash prices, increase in maintenance fees, expected investment growth returns, etc....) you may end up with more money at the end of the "contract length", or you may end up with less.

IMO, if you truly do go annually, and book deluxe hotels for each trip, DVC actually provides better value than the investment strategy. However, the investment strategy has many other benefits such as

- Liquidity: When life changes, it's much easier to pull your money out of an ETF investment than to sell your DVC.
- Vacation style changes: It may be shocking, but at some point in your life you may get sick of travelling to Disney. Or at the very least would visit less frequently. Pulling out cash out of an ATM is a lot easier than renting your points.
- Easier to downsize: You may buy DVC with the intent to stay in a 2 BR villa because of your young children. At some point in the contract, your kids will have grown up and may not travel with you. If you have points for a 2 BR villa but only require to be in a 1 BR or studio, you will have left over points. No, these are not free points. You've already paid for them. Pulling less out of an investment is much easier than trying to rent off a few extra points every year.
 


Figured I'd throw my two cents in as I have already on the DVC boards. Here are a few points

1) DVC IS an investment. It is not the type of investment that should be looked a way to provide a positive return. Instead, it should be looked at as an investment that provides future discounts on hotel accommodations. Either way, keeping all other things equal, your net-worth should theoretically be higher at the end of the DVC contract than it would have been had you paid cash for those stays. This is the investment.

2) The DVC question SHOULD be a truly financial calculation. Sure, there are a couple of very small non-quantitative value aspects, but in reality this is strictly a financial decision. DVC ownership DOES NOT get you anything tangible that cannot be had without DVC ownership. All it does is gets you those things with an alternate payment structure that can possibly lead to an overall reduction of long term costs.

Note: I know that there are a couple of small benefits like lounge access, or DVC member only cruises, etc.... IMO these are fringe benefits and are not the reason 99.9999999% of the people pay all of that money to buy into DVC.

3) One thing people always forget when they look at things like this (and this includes real estate appreciation as well) is inflation. Just because you bought for $50/point in 1950 and can sell today at $80/point, doesn't mean that your investment appreciated. $50 in 1950 bought a lot more than $80 today. (These are exaggerated numbers for illustration purposes. I know DVC did not exist in 1950. I don't even think Disneyland existed in 1950).

4) There are other ways to do this and get the same vacation experience as DVC offers. If you take every dollar that you would otherwise put into DVC (purchase price, closing costs, annual dues, etc...) and put it into some long term investment (think something like a broad based index fund ETF), you can then withdraw a portion of the money out of this fund every year (or two, or three) and use it to pay for the same hotels either through cash bookings or renting of points. Depending on multiple variables (increase in cash prices, increase in maintenance fees, expected investment growth returns, etc....) you may end up with more money at the end of the "contract length", or you may end up with less.

IMO, if you truly do go annually, and book deluxe hotels for each trip, DVC actually provides better value than the investment strategy. However, the investment strategy has many other benefits such as

- Liquidity: When life changes, it's much easier to pull your money out of an ETF investment than to sell your DVC.
- Vacation style changes: It may be shocking, but at some point in your life you may get sick of travelling to Disney. Or at the very least would visit less frequently. Pulling out cash out of an ATM is a lot easier than renting your points.
- Easier to downsize: You may buy DVC with the intent to stay in a 2 BR villa because of your young children. At some point in the contract, your kids will have grown up and may not travel with you. If you have points for a 2 BR villa but only require to be in a 1 BR or studio, you will have left over points. No, these are not free points. You've already paid for them. Pulling less out of an investment is much easier than trying to rent off a few extra points every year.

All excellent points on why not to get DVC. It’s commitment for no reason...
 

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