Qestion about Future Resell Value

[tmavery]

My wife and I are considering a DVC resale purchase at BLT. In doing our homework, I am trying to determine what the potential resale value of the DVC will be in ~15 years. We have young children now and love to visit WDW and we always stay in BLT 2BR with MK View (expensive without DVC or DVC Rental).

How do you think the value of the BLT DVC will be impacted on the resale market over the next 15 years. Right now I have plugged in that I could expect to get 70% of my current purchase price from the resale market in 15 years. Does this sound reasonable? Of course this does not consider the time value of money becuase I am trying to keep this as simple as possible.

Thanks in advance for your input.

[ELMC]

Originally Posted by tmavery

My wife and I are considering a DVC resale purchase at BLT. In doing our homework, I am trying to determine what the potential resale value of the DVC will be in ~15 years. We have young children now and love to visit WDW and we always stay in BLT 2BR with MK View (expensive without DVC or DVC Rental).

How do you think the value of the BLT DVC will be impacted on the resale market over the next 15 years. Right now I have plugged in that I could expect to get 70% of my current purchase price from the resale market in 15 years. Does this sound reasonable? Of course this does not consider the time value of money becuase I am trying to keep this as simple as possible.

Thanks in advance for your input.

Great question, unfortunately it is almost impossible to answer. I would suggest that you base your plans on being able to get 0% of your purchase price back and be pleasantly surprised if that's not the case. There are simply too many variables to account for in this type of projection. People who bought BWV 15ish years ago can sell today and get nearly all of their money back. I don't think anybody saw that coming. But then again, time value of money would suggest that getting the same amount of dollars back equates to only getting roughly half of your purchasing power back. My point is, I don't think you can factor this information into your buying decision with any degree of reliability. But I will say that your figure of 70% is overly optimistic. JMO.

[chalee94]

Originally Posted by tmavery

My wife and I are considering a DVC resale purchase at BLT. In doing our homework, I am trying to determine what the potential resale value of the DVC will be in ~15 years.

brian noble has a magic 8-ball but most of us aren't so good at foretelling the future.

if inflation goes up a lot, you could definitely get back 70% of your purchase price back in unadjusted dollars...but for the most part, i wouldn't count on it. some suggest not expecting to get anything back (as many timeshares currently have little value and can be picked up on ebay for $1 - DVC might maintain its value or it might join the rest of the industry). DVC might actively choose to devalue resale contracts...it's hard to know.

[Chuck S]

There are so many factors to consider that could affect the resale pricing, I would never purchase any timeshare with much consideration given to possible resale values.

[heynowirv]

Exactly as PP 's have siad .Or as Carnac (Johnny Carson's fortune teller on the tonight show),would've said enjoy your vacations because that's what you bought it for.

[zeferjen]

What I did was to calculate how many years before I basically 'break even' by comparing a yearly dvc vacation vs. a yearly non-discounted room at a deluxe resort. I think with resale it was in roughly 6 or 8 years (I can't remember). But the point is, if it goes to zero in 15 years, I am ok with that.

Plus that was a year ago and frankly I have stopped worrying about the buy-in and yearly fees. I am just having too much fun with my trips to Disney!

[JimMIA]

Originally Posted by tmavery

How do you think the value of the BLT DVC will be impacted on the resale market over the next 15 years. Right now I have plugged in that I could expect to get 70% of my current purchase price from the resale market in 15 years. Does this sound reasonable?

In a word...no.

If you look at BLT resale prices, most of the contracts on the resale market are probably around 2-3 years old and were probably bought for +/- $100 per point. Today, they are selling in the high $80's - a drop of 12-15% in 2-3 years.

That is not a pattern that gives confidence for 70% recovery 15 years from now.

(In fact, I'm expecting a thread in 2027, saying, "If I pay $25 per point for BLT, do you think I'll be able to recover $20 pp 10 years from now?")

Frankly, with BLT, I would not bet lunch money on 50% 10 years from now. For one thing, it's a large resort, with tons of points outstanding. As you can already see, there are a lot of BLT resales on the market and there will be more as time goes by. Resale prices are a supply and demand thing, and large resort prices tend to drop more rapidly because there are more sellers trying to unload.

In addition, I think BLT resale prices will take a hit when Grand Floridian begins sales, and especially when GF resales start popping up. We have seen that bigtime with both SSR and AKV, with resale prices dropping precipitously when a more desireable property came on the market. To be sure, there is much less difference between BLT/GF than there was between SSR-AKV/BLT, but still the dynamics will likely be similar.

The model I would use is 10 years ownership with little or no recovery. That's conservative, to be sure. In 10 years, you might recover 25-30%, or more.

But would I make a decision assuming that kind of recovery? Absolutely NOT!

[Deb & Bill]

I got about 125% back on my BCV sale a few years back. And at least 100% on my OKW sale at about the same time. But will any future sales bring as much? I doubt it.

But I bought both of them direct from Disney at about $65-70 a point. You won't find those direct prices any more. And even resales will fall as there is less time and newer resorts to buy.

[Dean]

Originally Posted by tmavery

My wife and I are considering a DVC resale purchase at BLT. In doing our homework, I am trying to determine what the potential resale value of the DVC will be in ~15 years. We have young children now and love to visit WDW and we always stay in BLT 2BR with MK View (expensive without DVC or DVC Rental).

How do you think the value of the BLT DVC will be impacted on the resale market over the next 15 years. Right now I have plugged in that I could expect to get 70% of my current purchase price from the resale market in 15 years. Does this sound reasonable? Of course this does not consider the time value of money becuase I am trying to keep this as simple as possible.

Thanks in advance for your input.

You never know. The nature of timeshares is that they lose value immediately just like new cars do and often over time as well, esp RTU properties. For BLT it's not possible to get even 70% right now other than maybe for very small contracts and it's very unlikely to go up from here, only down, the only question is how fast. Assuming no major changes in the variables, I'd say that in 15 years (32 years remaining) you'd be lucky to get 50% of today's retail price in pocket. There's very little that could make the prices go up and many things that could make them go down. Retail increases may help decrease the rate of decline but will almost certainly not be enough to increase prices at any point. If you buy resale the rate of decline will be the same but the difference far less. I'm not sure the resale price should matter because if one plans to sell in 15 years, it's likely not reasonable to buy and certainly not reasonable to buy resale.

[Sammie]

Originally Posted by JimMIA

In a word...no.

If you look at BLT resale prices, most of the contracts on the resale market are probably around 2-3 years old and were probably bought for +/- $100 per point. Today, they are selling in the high $80's - a drop of 12-15% in 2-3 years.

That is not a pattern that gives confidence for 70% recovery 15 years from now.

(In fact, I'm expecting a thread in 2027, saying, "If I pay $25 per point for BLT, do you think I'll be able to recover $20 pp 10 years from now?")

Frankly, with BLT, I would not bet lunch money on 50% 10 years from now. For one thing, it's a large resort, with tons of points outstanding. As you can already see, there are a lot of BLT resales on the market and there will be more as time goes by. Resale prices are a supply and demand thing, and large resort prices tend to drop more rapidly because there are more sellers trying to unload.

In addition, I think BLT resale prices will take a hit when Grand Floridian begins sales, and especially when GF resales start popping up. We have seen that bigtime with both SSR and AKV, with resale prices dropping precipitously when a more desireable property came on the market. To be sure, there is much less difference between BLT/GF than there was between SSR-AKV/BLT, but still the dynamics will likely be similar.

The model I would use is 10 years ownership with little or no recovery. That's conservative, to be sure. In 10 years, you might recover 25-30%, or more.

But would I make a decision assuming that kind of recovery? Absolutely NOT!

I agree and if Polynesian DVC comes to pass, it will take another hit from their resales.

[zavandor]

Also consider that when you'll sell, you will have likely to pay 10% commision to a broker and another 10% in taxes (if I'm not wrong).
That is a big hit as well.

About BLT, I would not take the resale decrease of the latest years as a pattern. It went in 2 years from "almost no contract" to "a lot of contracts on sale" as more members who kept it for a few years started to sell.
It will reach a point of equlibrium (I cannot guess which is) and then the price will decrease slowly.
Other resorts like SSR have a more stable price. I bought a contract last year and I think I could be able to sell it today for a few $ more than I paid (I noticed a slight price increase in SSR after they announced it's sold out, not sure if it's a coincidence).
Also the low MF at SSR help to keep the price stable. I noticed that now AKV prices dropped, the big increase in MF in the two latest years and the overall price can be a reason. Since BLT has now low MF, if it stops to increase so much every year, that could help BLT to keep it's value.

[OrangeCountyCommuter]

Originally Posted by ELMC

Great question, unfortunately it is almost impossible to answer. I would suggest that you base your plans on being able to get 0% of your purchase price back and be pleasantly surprised if that's not the case. There are simply too many variables to account for in this type of projection. People who bought BWV 15ish years ago can sell today and get nearly all of their money back. I don't think anybody saw that coming. But then again, time value of money would suggest that getting the same amount of dollars back equates to only getting roughly half of your purchasing power back. My point is, I don't think you can factor this information into your buying decision with any degree of reliability. But I will say that your figure of 70% is overly optimistic. JMO.

I agree 100% with this..

A timeshare is not traditional real estate and Disney's are further limited by the fact that they expire. SO when you want to sell it will have LESS use then when you bought.

If you can't afford to write off the entire investment, don't buy!

The "assumptions" others are posting are not really comparable IMHO and I honestly think that values are going to continue to decline over the years. your Member Fees keep going up, Disney ticket pricing keep going up etc... I think people are going to be getting out faster then they are getting in. (Of course I admit that I find the "Fast Pass Plus" a HUGE negative so far and if there are others like me the sell may come sooner then later LOL!)

[Dean]

Originally Posted by zavandor

Also consider that when you'll sell, you will have likely to pay 10% commision to a broker and another 10% in taxes (if I'm not wrong).
That is a big hit as well.

About BLT, I would not take the resale decrease of the latest years as a pattern. It went in 2 years from "almost no contract" to "a lot of contracts on sale" as more members who kept it for a few years started to sell.
It will reach a point of equlibrium (I cannot guess which is) and then the price will decrease slowly.
Other resorts like SSR have a more stable price. I bought a contract last year and I think I could be able to sell it today for a few $ more than I paid (I noticed a slight price increase in SSR after they announced it's sold out, not sure if it's a coincidence).
Also the low MF at SSR help to keep the price stable. I noticed that now AKV prices dropped, the big increase in MF in the two latest years and the overall price can be a reason. Since BLT has now low MF, if it stops to increase so much every year, that could help BLT to keep it's value.

Potential sales commission of 10% yes, taxes no unless you actually make money or potential holdback if you're out of the country. I don't think BLT will decrease as much as it did previously but the fees there have gone up faster than most and though they should remain relatively low, they are likely not finished centralizing so I don't think they'll give that much price protection. It will still almost certainly decrease faster than say AKV or SSR from here really than everything at this point. Likely the only options that will hold up better than average for the current offerings are VGC and BCV in all likelihood and BCV has already taken a pretty big decrease. GF will likely be in that group due to it's size and other positives even if some don't care for it.

[chalee94]

Originally Posted by Dean

Potential sales commission of 10% yes, taxes no...

yep - you would only pay taxes on a gain.

if there's a loss (MUCH more probable), it's a "personal loss" and you cannot deduct it.

[JimMIA]

Originally Posted by zavandor

Also consider that when you'll sell, you will have likely to pay 10% commision to a broker and another 10% in taxes (if I'm not wrong).

I believe that sellers outside the US have 10% of their proceeds withheld in case they owe some tax on the sale. Normally there would not be any gain, so that 10% would eventually be paid to the seller.