Qestion about Future Resell Value

[Dean]

Originally Posted by chalee94

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.

For those VERY few that could actually qualify for a business (or tried to) there might be additional charges in that if they did sell their cost basis would be lower if they had depreciated. I realize this is very difficult to do legally and probably affects few people but often people do things on their taxes they shouldn't and sometimes it gets caught and other times not. An example would be deducting a donation of the use of timeshare time, not legal but it's done routinely by many.

[k3chantal]

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.

If this detail is either going to convince you to buy or not; I wouldn't purchase DVC. Buying a timeshare is not buying a house or property. It's more like buying a car.
I think a healthy mindset when buying a timeshare is that you are prepaying for the opportunity to make a reservation. If you go into this situation with the mindset that you want your money out of it or even most of your money out of it. I don't think it is a good bet.

[Sandisw]

Originally Posted by k3chantal

If this detail is either going to convince you to buy or not; I wouldn't purchase DVC. Buying a timeshare is not buying a house or property. It's more like buying a car.
I think a healthy mindset when buying a timeshare is that you are prepaying for the opportunity to make a reservation. If you go into this situation with the mindset that you want your money out of it or even most of your money out of it. I don't think it is a good bet.

Got to agree...assume a resale of 0 for the time you want to use it...if it still is a good deal for you, one should buy. This is what we did...figured that if we ever have to sell, anything we get will be a bonus since we planned for no return. Of course, I LOVE my DVC so I can't ever imagine selling!!!

[lilpooh108]

AKV has dropped about 30% in resale prices just in the last 3 years. I wouldn't count on BLT keeping 70% of today's value in 15 years. We just sold our BWV contract at a "loss" considering the price per point and broker's commissions. We bought it resale only 2 years ago.

[Sammie]

The value of DVC is in the using of it, not the resell.

[pinnocchiosdad]

Originally Posted by Sammie

The value of DVC is in the using of it, not the resell.

Sorry to disagree. But using it is the benefit. The resale price is the value of your points.

[bakerworld]

Personally believe a TS purchases should be bought with the idea of no resale value.

We're low-balled on pts because my husband refused to purchase w/o financing. He figured out what we spent on hotels and used that figure to calculate the amount of pts we've been using, financed w/ annual dues. I would love to purchase more pts but so far he won't budge.

At this point we're borrowed into 2013 with 2 trips planned for this year which leaves us enough points for one trip in 2014. He says that's good enough but last F&W we ended up staying in a hotel again which I think he actually enjoyed.

[Dean]

Originally Posted by bakerworld

Personally believe a TS purchases should be bought with the idea of no resale value.

We're low-balled on pts because my husband refused to purchase w/o financing. He figured out what we spent on hotels and used that figure to calculate the amount of pts we've been using, financed w/ annual dues. I would love to purchase more pts but so far he won't budge.

At this point we're borrowed into 2013 with 2 trips planned for this year which leaves us enough points for one trip in 2014. He says that's good enough but last F&W we ended up staying in a hotel again which I think he actually enjoyed.

I think that's a very good option for many. Buy less points and supplement with cash stays (esp discounted) and non DVC trips (Orlando or otherwise).

[tmavery]

OK- one other question. I have rented before and paid Dave's DVC $13 per point. What are your opinions on future rental prices per point?

Cash is not the issue in my situation - we can afford the cost of DVC purchase up front. I am not looking at this as an investment, I am trying to figure out whether renting points over the next 12-15 years is a better decision or whether DVC ownership is better.

Thanks in advance for your help!

[DVCPAT]

Originally Posted by tmavery

OK- one other question. I have rented before and paid Dave's DVC $13 per point. What are your opinions on future rental prices per point?

Cash is not the issue in my situation - we can afford the cost of DVC purchase up front. I am not looking at this as an investment, I am trying to figure out whether renting points over the next 12-15 years is a better decision or whether DVC ownership is better.

Thanks in advance for your help!

If you plan on vacationing in WDW for the next 12-15 years, I would buy a contract on the resale market. It’s nice to have control of your vacation plans, especially around the holidays. As far as the resale value of DVC in 15 years, it will tie into the cost of renting a room at a Disney resort. It’s nice to see Disney investing in the theme parks and technology that improves efficiency.

[Dean]

Originally Posted by tmavery

OK- one other question. I have rented before and paid Dave's DVC $13 per point. What are your opinions on future rental prices per point?

Cash is not the issue in my situation - we can afford the cost of DVC purchase up front. I am not looking at this as an investment, I am trying to figure out whether renting points over the next 12-15 years is a better decision or whether DVC ownership is better.

Thanks in advance for your help!

If you plan to go yearly for the next 12-15 years and DVC makes sense for you at all (and you can truly afford it by paying cash), buying is likely better. The overall cost will likely be less and you'll have far more control over your options. What you could do is buy at cheaper, maybe 2042 resorts with loaded contracts and make them do with the extra initial points and borrowing. Using this method you can likely get by with maybe 15-20% less points than you'd calculate you'd use yearly. If I knew I'd use the points at DVC resorts only for 12-15 years, I'd buy but simply less points.

[aggiemullins]

Personally, I think resale prices of BLT will hold for awhile. Probably not 12-15 years, but at least 5 years or so. A previous poster said the BLT value will decline when GF goes on sale. IMHO, I think BLT will either gain value or hold firm because DVD won't be able to help themselves and price GF so high that it will make people's heads spin.

Looking at the history of BLT, DVD made the points originally somewhat competively priced with SSR and AKV. They just made the number of points needed per stay much higher. Once they realized they had a gold mine, (imagine that, people will pay more to stay at a monorail/MK resort!) they rose the price by 50% over the few short years it was for sale and quickly started developing GFV. I'm not familiar with DVC prices pre-2002, but i know of no other resorts that have had such dramatic raises in price, and in a recession at that!

I'm pretty sure they now know the value of a monorail/MK resort and with it being the flagship of WDW, they'll price it accordingly. Sticker shock will make a $90/point BLT contract look like a bargain and demand for them will probably increase.

With that said, its certainly possible you could only see a 30% loss over 10-12 years. Of course as stated, resale brokers will gobble up another 10%, so there's that too... Agreed with everyone though, you should never count on getting any of your money back.

[aggiemullins]

Of course on the flip side, besides the recession, I think resale prices have fallen because WDW has gotten so incredibly expensive over the last 5 years. It used to be that the hotel was the biggest expense by far and (while it wasn't ever cheap) the food/park tickets/merchandise were at least reasonable for what you got. Fast forward to today and booking a Disney hotel is one of the few areas where you can still find a bargain. When WDW starts making movie theaters and six flags prices look cheap, you know something isn't right. I think people see this and are starting to realize that there are probably better options then dropping $20K to "lock in" the price of their vacations, hence the glut in resale.

As for the rental market pricing, it'll probably hold steady. It hasn't moved much in the last 10 years and probably won't move much for another 10. At least not until WDW goes thru a renaissance and gets serious about competing with PotterWorld. I'm sure I'll hack some people off here, but WDW has been resting on its Laurels for 10 years with only minor improvements. And yes, I think the new Fantasyland was minor considering how long it's taken them to build it and for what it is. Hopefully now that WDW has DL's George instead of Meg running the ship, things will start rolling. If anyone can see what a major investment will do (Carsland and rebuilding of DCA) for the bottom line, it'll be him since he just went through it.

[Sammie]

Originally Posted by pinnocchiosdad

Sorry to disagree. But using it is the benefit. The resale price is the value of your points.

Sorry to disagree, To us personally the value of having DVC is using it. We have no desire to sell and if we do, we could care less about the value of the points at that time.

We will already have gained all the value out of it by then, in the using of it.

[pinnocchiosdad]

Originally Posted by Sammie

Sorry to disagree, To us personally the value of having DVC is using it. We have no desire to sell and if we do, we could care less about the value of the points at that time.

We will already have gained all the value out of it by then, in the using of it.

Trust me, if you ever find your self in a financial situation that leaves no option but to sell your points, you will be highly concerned with the value of your points. Unfortunately many members found themselves in that situation the last few years.