15 Year Extension at OKW for $25 per point

[eaglecan]

At 15.00 per point i would probably do it if offered.

 

[JimC]

After some reflection I realized that at $15 it would be roughly the same price that original buyers paid -- $1.00 per point per year of use. At $25 it would be about what they were selling points for in 2001 on a per point per year of use.

I still think the key is what the extension does to resale value. Not so much for now, although that should be interesting to watch. But how it affect value in the five to fifteen years out range.

 

[Pixie_Dust]

I received my letter today, and it is all about the $25, NO mention of a $15 early bird price -- although it did occur to me when I was reading the letter that it SHOULD have been $15, at which price I MIGHT have considered doing it. What greedy so-and-sos! A dollar per point per year would have been more than enough.

Not to mention it is completely against the spirit in which we bought our points. I hate that they are giving us this "one time only" arm-twisting, and forcing us to sign some kind of deed over to them if we don't want to (or CAN'T!) pay $25 per point. A few months is not enough notice for most people to save up thousands of dollars even if they wanted to. (Or is it all about placing a lien which is not due until sale? That's a little unclear for me. What if you never sell but keep the membership until it runs out, having not paid up, perhaps because you CAN'T, and yet you don't sign over the extension to them? What happens?)

And I agree with the previous poster that I am concerned about what not buying the extension might do to our potential resale value. It really changes the character of what we purchased. We would be 80 years old when the original deed runs out, so I'm not concerned about extending it for that reason, but what if we had to sell early? How would these forced changes affect our ability to do a resale?

As it happens, we are arriving at OKW on Sept. 23. Do you think if we attended the meeting on the 24th that they would let us ask about that $15 idea?

 

[3pirates]

I personally am not interested in investing a significant amount of cash NOW that I wouldn't begin to benefit from for 35 years. Too much can change in that time...no thanks for me!

 

[WebmasterDoc]

Interesting. It goes along with my thoughts that DVC needs a large % to participate to make this work. And while I haven't thought enough about it to formulate specific ideas, on the surface I'd say that I doubt it's within the rules or legal in the state of FL to structure it this way without a formal vote of the membership themselves. I do think it's fair in terms of cost at $15 per point but not at $25 pp. It would be interesting what they offered later if a fairly large group of people opted out. I'd think that would create a pretty good sweat for those in charge as I don't think DVC has a prayer of selling those memberships for that take home amount in the future when you adjust for inflation and consider the extra costs associated with an entire new sales effort. I'll have to let in sink in and re-evaluate the situation.

I agree that a large number of members accepting the extension is needed - otherwise all DVC gains is the opportunity to sell 50 year contracts on their current OKW inventory plus any contracts regained thru ROFR and foreclosure. I also agree the $15 is a fair price, but we will still not take advantage of that since we'll be in our mid 90's in 2042 - let alone 2057.

Lets look at the relative value of this extension using 1000 points (to keep the math easier - at least for me). At the reported $15 per point with incentive the up front cost will be $15,000.

If we invest that same $15,000 at 5.25% for 35 years - the compounded interest will increase the total amount to almost $94,000. At 8% compounded we're looking at over $244,000 in 2042. What will the resale value for those 1000 points be in 2042 (whether the points are all in one contract or in smaller amounts)? in 2042, we are talking about a contract with only 15 years until expiration - will the perceived value still be $94 per point for that contract - will it be $244 per point for that contract? Could you purchase 1000 DVC points for $244,000 in 2042?

Anyway, all we have is speculation and each owner will need to assess the relative value of the additional years as it pertains to their specific situation and act accordingly.

As it happens, we are arriving at OKW on Sept. 23. Do you think if we attended the meeting on the 24th that they would let us ask about that $15 idea?

Yes, you will likely have an opportunity to ask questions - after the "official meetings" have been adjourned. You are not likely to have any opportunity to have any discussion about the issues prior to the "official" voting. That portion of these meetings is very tightly scripted with no room for audience participation - and members attending these meetings are merely observers with no opportunity for input or participation until the conclusion of the meetings.

If you will be there on the 24th, please do plan to attend the meeting (it will be at the Contemporary Convention Center at 2:00pm prompt). The meetings are a model of efficiency and are interesting, but no input from those in attendance is welcome.

 

[Tamar]

We MIGHT consider $15 a point, but at $25/point we'll take a pass. If Disney really wants the cash infusion, they'd be wise to offer the $15.

I'm surprised that some(?) of the letters supposedly went out. We didn't get ours....

 

[theostwalts]

It looks like $15.00 would actually add to the resale market. For example, the VWL points are going for around $80 to $85. Adding $15 for the extension would allow someone to buy resale for around the same price point as the SSR/AKV considering the incentive per point offered from Disney on the new sales. Do you think the $25 is aimed at keeping the resales from hindering new sales directly from DVC?

 

[dunnhorn]

Okay - I'm going to go opposite of the crowd and say that I actually think $25 add on to be the longest contract would be market. I think Disney is targeting OKW because of the low resale rates and it needs to do something to start to ramp up to a Contemporary Villa price of $125 or even $150 a point.

I'm looking at the Timeshare Store resale list for OKW, and the price is right around $75/point. Adding extra time and money would in effect make it around $100 a point, which is what the market is for AKL (and until recently, not that far away from DVC (not reseale) prices of Saratoga.) OWK has the largest rooms - so why not have pricier rooms?

I personally think even at $25 it is a no brainer. We own 125 points at SSR - if we owned these points at OKW, our extra "price" would be $3125. This is totally cheap. Had we known this was coming, we would have probably picked up a resale contract at OKW instead of SSR.

Just my 3 cents (with 1 cent add on.)

 

[married@wdw]

I have to agree with dunnhorn. For those who think this offer is "unfair," Disney will be offering you a huge discount over current point prices to extend your contract if you choose to do so. You had no reason to expect them to ever offer you this and I find it to be quite a generous deal.

When SSR was announced, I was disappointed because I will be 69 in 2042 and, if DH and I are anything like our parents, we'll be enjoying Disney well into our 70s and would really have liked the longer contract. Now, we have that opportunity and we're thrilled!

We'll definitely pay at $15 per point and might pay if there's good financing offered at $25. I hope it works out, but we just put an addition on our house, so we might not be able to swing it. Those are the breaks! I've missed plenty of great Disney deals because we just couldn't swing them -- this might be another. But I think it's a great deal!

 

[Disney MAINEiac]

$25 sounds about right for a pro rated price per point. given the current $104 per point price that figures to $2.08 per point per year so $2.08 x 15yrs would be $31.20 per point. DVD probably sees $25/point as a deal

 

[GEB@okw]

Would be to sell my OKW at $75 a point, put the $25 a point extension money with my resale proceeds and buy at the AKV for $104 and use whatever incentive that is available to cover the remaining $4. Any thoughts?

 

[TwingleMum]

I'm with the "Thanks but no thanks " crowd. I don't like being strong armed and will keep the 2042 date.

 

[jerry557]

If this does go through and for the rest as well it would make SSR the first resort to expire Or will the offer a 3 year extension

Probably a decade or two from now you will get a letter in the mail asking if you want to extend to 2072.

No biggie...

 

[LIFERBABE]

Would be to sell my OKW at $75 a point, put the $25 a point extension money with my resale proceeds and buy at the AKV for $104 and use whatever incentive that is available to cover the remaining $4. Any thoughts?

Yeah, but you'd have to change your name to GEB@AKV

But heck, what's in a name?

 

[johde]

I think $25 per point is way to expensive. Even $15 per point is expensive. I probably wouldn't spend more then about $10 per point. As others have said. A point 35-50 years from now is not worth the same is a point today.

 

[mickeys papi]

have any of you thought of the resale values of a okw contract now
what effect on points with or without the extension

 

[msdis]

We were looking at doing an add-on thru DVC next year at OKW (or BWV or VWL where we already own). This will impack the resale prices thru DVC too, I'm sure. We will be very old when the current contract expires and with no kids it matters not to us of the extention. I would rather have the extra money to spread on "new" points instead of having spend it on points we will never see. I agree about the impact of resale later. Buyers are getting younger & younger with smaller kids and 35 years from now they will still be young.

 

[salmoneous]

have any of you thought of the resale values of a okw contract now
what effect on points with or without the extension

I believe resale values for 2042 OKW will stay about where they are today, and that 2057 OKW will sell for about what SSR sells for, or about $5/point more.

 

[kend58]

Would be to sell my OKW at $75 a point, put the $25 a point extension money with my resale proceeds and buy at the AKV for $104 and use whatever incentive that is available to cover the remaining $4. Any thoughts?

At the "announced" $25 that is the effect makes OKW same same as current AKV price wise. At the rumoured $15 early decision price it keeps OKW at least $10 disount to new AKV

This allows AKV to have reasonable ($5 pp or so) price increase as DVD starts to sell new AKV Kidani contracts and sets up GCV and CRV to be $115 to $125 price range IMHO

 

[abner1776]

What is the price difference between buying AKV/SSR and OKW today thru DVC ? If the difference is less than $15, then the extension deal is no deal at all.

On the resale boards, OKW contracts are going for the mid to high 70's while SSR is in the low 80's...not exactly a difference of $15 a point. AKV is up in the low 90's but there is a limited market at this time for AKV, so that's not a fair comparison.

While it's difficult to form a valid comparision between resort pricing because of the uniqueness of each resort, all things being equal, the price difference between a 2042 resort and a 2057 resort is somewhere in the $5-$7 range because of how far out we are going. If we were talking about a 2020 resort and a 2035 resort, well then the price difference would be far higher.

At $15 a point I just do not see the financial benefit in extending, but I am sure WDW is hoping we do not look at the financial benefit and instead go with our hearts and "go for the extra years."