Should we sell our larger contract....

[WDWorld2003]

This is really a tough decision for us as we love DVC. We've had several months of ups and downs financially (job loss and job change, home repairs, etc.) and we are thinking of selling our larger 210 pt. contract to pay off debt. It would leave us with only a 60 pt. contract. We hope that with the money we save by paying off debt we can rebuy a smaller contract later.

Of course, we don't want to sell but we feel it may be a wise move. We usually end up renting from 30 to 100 points of unused points per year.

Has anyone out there sold their DVC to pay debt? Did you regret it? We do feel we will be back to normal in a year or two but we really hate having debt. We could rent all of our points each year but it would still leave us in debt. The sale of the larger contract would pretty much wipe out the debt and give us a cushion.

I don't even know why I'm asking because as I put it on paper I know it is the right choice. Just wanted some feedback and thoughts.

 

[dwelty]

I know it is a big bummer to have to do this. I would sell the contract, pay off the debt, and immediately open a savings account earmarked for a new contract. Take the payments you used to make to the (now retired) debt and put it into the account each month. You will feel like you are working toward a new goal. DVC will always be for sale, you might even find a new property you would like to buy at. And remember, you are still DVC members no matter what!


Good luck.

 

[disney junky]

I have no real advice. All situations are different. Sometimes in our lives, we avoided debt so much that we cut ourselves short in the long run. What might things look like financially a year from now? Worse, the same, better. And can you get through the next 12 months without selling?

I wish you well and I hope things settle down for you.

 

[WDWorld2003]

Thanks..... I'm probably making it sound worse than it is. When we purchased DVC almost five years ago we had very little debt - car and mortgage.

Funny how life situations can change your money situation so quickly. We are not struggling but we have less in savings than I would like and the debt just keeps eating away at me saying "sell and be done with it". Of course, there's that devil on the other shoulder and he says "keep it"

I'm not sure if it's the devil or Mickey!

 

[HeatherPage]

If it's paid off, keep it! Your going to vacation anyway right?

 

[ldo]

depends on your view of finances. But virtually all finacical planners would classify DVC as a luxury item. If you can sell your contract for as much (or more) than you paid for it, then it makes sense to do so and pay down debt, esp. if the debt has interest rates anywhere above 6 %.
You can always rent points from others to supplement your smaller points, and buy another smaller package later when you are financially able to do so.

You should be VERY thankful that DVC is fairly easy to sell. Many (most) who bought timeshares that are non-DVC do not get nearly what they originally paid back.
Good luck. Elaine

 

[epicureangirl]

Could you sell your 60 points and keep your 210 (but rent those out to cover your yearly fees and put some extra $ in your pocket)?

If you always have 30-100 spare points, you probably don't "need" your 60 point contract and those points will sell for more per point.

Bottom line, you should do whatever it takes to relieve some stress and stay on your feet -- if that means selling DVC than so be it. If you have a financial planner, I would make an appointment and get some free advice. Sometimes they can see options that you can't... if you think it is a matter of only a year or so to clear things up, you may want to hang on to it as you would be incurring another 'loss' on your sale of points (plus incurring closing costs). Also, if you know you intend to repurchase DVC, that 'loss' may actually be more $ than the interest that would calculate on the amount of money those points would sell for. Clear as mud, right?!

 

[JenSop]

I guess it's different strokes for different folks. I'm used to having debt. My student loans are crazy high, plus we have other credit card debts as well. But we bought into DVC anyway. We thought about it for a year before we bought in. We still have debt, but we have a plan on how to pay for it. I didn't want to wait any longer. I want to take that big trip next summer before we start thinking about having a family. If it was me, I wouldn't sell!

 

[BroganMc]

Could you sell your 60 points and keep your 210 (but rent those out to cover your yearly fees and put some extra $ in your pocket)?

If you always have 30-100 spare points, you probably don't "need" your 60 point contract and those points will sell for more per point.

<SNIP>

Also, if you know you intend to repurchase DVC, that 'loss' may actually be more $ than the interest that would calculate on the amount of money those points would sell for. Clear as mud, right?!

What she said. Selling and paying off that debt now seems like the easy choice to make UNTIL you consider your future plans to rebuy the points. It'll cost you more to buy them a year or two from now. Then you're back to robbing Peter to pay Paul.

It makes a bit more sense to sell off what you truly don't use. Talk to a financial wizard about your specific debt and earnings' potential. See just how bad a jam you're in.

A little debt is expected and even considered smart as it builds your credibility with creditors when you pay it off. It always makes us a bit worried, but then you need to evaluate just what you can depend on. The only time you start selling off things you use is when you are in the catastrophic category of debt accruing, i.e. death or disability causes loss of continuing income, children taken in as dependents for the next 18 years, etc.

We purchased our timeshares under the philosophy of what did we have to currently spend on big purchases and would the ongoing expenses work within our expected incomes. If expenses ever get too high for our income level, then it becomes the albatross ready to sell.

 

[CarolMN]

Are you living beyond your means - spending more each month than you take in? Is your debt growing? Is it credit card debt or just debt for your mortgage & autos? Don't answer those, it's just something to think about.

If your debt isn't growing and you are living within your means (including adding to your savings & other financial goals), then my advice is to keep DVC. Find a way to reduce your other expenses and then put the savings towards reducing the debt until it's gone. If you can do that and see progress, you'll probably feel a lot better about keeping DVC.

My point - won't do you any good at all to sell DVC if your still "bleeding".

Good luck!

 

[WDWorld2003]

Thanks everyone for your help - it puts things in perspective. I am very thankful that DVC is easy to resell and that is one of the reasons we purchased. We hope it continues to have strong resale value.

We'll be crunching the numbers over the next few weeks and making a decision on which contract to sell. Either way we'll still be members

 

[robinb]

Of course you should sell DVC if it is dragging you down so much! I can recommend The Timeshare Store from both ends of the transaction .

If DVC is not "carrying it's financial weight" but the rest of your finances are OK, I would recommend selling the 60 point add-on (it will get maximum $$!) to get a boost and renting the rest to pay for your maintenance. You could easily get $11 per point or about $2300 for one year's worth of points. My BWV points rented a lot easier than my OKW points!

 

[tomandrobin]

Of course you should sell DVC if it is dragging you down so much! I can recommend The Timeshare Store from both ends of the transaction .

If DVC is not "carrying it's financial weight" but the rest of your finances are OK, I would recommend selling the 60 point add-on (it will get maximum $$!) to get a boost and renting the rest to pay for your maintenance. You could easily get $11 per point or about $2300 for one year's worth of points. My BWV points rented a lot easier than my OKW points!

I was kind of thinking this too. Sell the smaller contract, get the premium $/pp. Rent the balance of your unsed points. Buying additional points later will only cost you more money, then saving money.

 

[WDWorld2003]

Thanks all - we may think about keeping the larger contract instead. I guess the rationale behind selling it was it would pay off everything and we would just purchase 60 to 100 points down the line.

We know we will probably go only every other year now that both kids will be in college. And there are many other places we'd like to vacation at (hard to believe-I know ).

If we sold the larger and purchased just a small add on contract we could bank and borrow and have enough for a 1 to 2 bedroom every few years with no hassles of renting points. But the cost of purchasing does go up every year so we do need to take that into account.