ROFR Thread July to Sept 2023 *PLEASE SEE FIRST POST FOR INSTRUCTIONS & FORMATTING TOOL*

[miggy03]

Finally!
So happy to finally be a DVC member!

miggy03---$150-$16286-100-CCV@WL-Feb-0/22, 181/23, 100/24, 100/25- sent 6/27, passed 7/19

bad news is we went with magic titles, so who knows when we will close

 

[DanCali]

I get where you are going but 17 years of fabulous and amazing vacations vs 30 (ish) years of just okay vacation’s then I would pick the 17 years even if it cost me more.

If both the 17 and 30’years was fabulous and amazing then I would go with the 30 years.

Polynesian is 2066, so 42 more years, but I get the point you’re making. That said, unless you really need the studios that sleep 5, which we actually do prefer ourselves, CCV (2068) is a much better value for money than BRV (2042) at current resale prices.

One thing we all know is the 2042 deeds will be worthless in 18 years. So the depreciation rate on these contracts at these prices will be quite high going forward.

Exactly why I bought a RIV resale for $152….rather spend more to own there!

Resale restrictions aside, that expires in 2070… so paying about $3/year is very reasonable. We’re talking $6-$7/year for 2042 resorts at current prices, before dues.

But I’m all for free markets - I can only hope that 20 years from now I get that kind of premium for my 2057-2064 resorts!

 

[Sandisw]

Polynesian is 2066, so 42 more years, but I get the point you’re making. That said, unless you really need the studios that sleep 5, which we actually do prefer ourselves, CCV (2068) is a much better value for money than BRV (2042) at current resale prices.

One thing we all know is the 2042 deeds will be worthless in 18 years. So the depreciation rate on these contracts at these prices will be quite high going forward.



Resale restrictions aside, that expires in 2070… so paying about $3/year is very reasonable. We’re talking $6-$7/year for 2042 resorts at current prices, before dues.

But I’m all for free markets - I can only hope that 20 years from now I get that kind of premium for my 2057-2064 resorts!

The point was that many would say that $152/point for a restricted resort, even with a longer expiration is still more than it should be..which is the same notion that the 2042 ones are.

I personally would not buy a 2042 now but not because it’s short expiration but because it’s not my top resort..but, if it was it’d be worth it.

Put another way.. if RIV had expired in 20 years when I bought, I still would have spent the money over other resorts.

To be fair, we have preferences and would be disappointed if we can’t stay at the resorts we love. So, no savings is worth it.

 

[larry47591]

larry47591---$129-$20770-160-AUL-Mar-0/22, 0/23, 0/24, 160/25-Subsidized dues- sent 6/27, passed 7/19

4th contract in the last 6 months I am done. For now….

 

[JaqGus1620]

I recently signed a contract for BCV for $115/pt (but with no points or maitenance fees until 2024) and I'm not going to defend it on the financial merits vs. picking up some of the other resorts, but I did price it out. We already had 325 points between Aulani and VGF and my kids really, really love Stormalong Bay (and I've always wanted to own at BCV), so I figured we'd get the extra 100 points (and home resort priority) at BCV for the next decade or two while they are traveling with us, even though the value is not as good as AKV or CCV (or possibly even VGF direct these days). In defense of purchasing BCV and BWV (if you can get it close to $100), the actual points required for standard rooms are quite low, so it does help offset some of the $ per point per year gap.

Around the same time you bought your contract, we bought a 100pt BCV contract for $135(incl 2022/2023 pts only paying 2023 pts). We plan to rent the 2022-banked into 2023 and 2023 pts to bring down the cost. We absolutely love the resort and couldn't believe our luck in finding the perfect contract. I am a huge number cruncher and value person, but the following amenities also add value for us: great location w/skyliner, boat access, and convenient to bus, small boutique hotel feel with great theming, stormalong bay and a very quiet DVC pool, convenient parking lot for our rental car, nostalgia having stayed there on our honeymoon and kids first stay as well. There is nothing better than walking leisurely to/from the resort from Epcot, boat dock, or skyliner. And as you mentioned, the lower point cost for rooms.
I am thrilled we found this contract and will never look back!

 

[DanCali]

Around the same time you bought your contract, we bought a 100pt BCV contract for $135(incl 2022/2023 pts only paying 2023 pts). We plan to rent the 2022-banked into 2023 and 2023 pts to bring down the cost. We absolutely love the resort and couldn't believe our luck in finding the perfect contract. I am a huge number cruncher and value person, but the following amenities also add value for us: great location w/skyliner, boat access, and convenient to bus, small boutique hotel feel with great theming, stormalong bay and a very quiet DVC pool, convenient parking lot for our rental car, nostalgia having stayed there on our honeymoon and kids first stay as well. There is nothing better than walking leisurely to/from the resort from Epcot, boat dock, or skyliner. And as you mentioned, the lower point cost for rooms.
I am thrilled we found this contract and will never look back!

This was a very thoughtful post and really shows how each person values things differently and from a personal perspective. You clearly made the right decision for you!

Unfortunately (for me) as someone who likes some of these 2042 resorts and would consider buying there, it's hard to compete with nostalgia and some of the other intangibles you mentioned when I try to look at things from a pure numbers sense.

 

[DonMacGregor]

So activity on this thread definitely feels much slower than the first two quarters…but what is the data people are pointing to that suggests prices are going up? We aren’t seeing as many grand slam loaded contracts under $100 per point, but are there any resorts actually going above where they were 2-3 months ago?

I just sold a 40-point OKW 2042 contract, fully loaded for $115 PP. I had 2 full-price offers and one at $105 within the first 2 hours of listing. I paid $80 PP for the contract in February (see the ROFR and Closing Time threads for verification).

In looking on the aggregator sites, I don't see any contracts of less than 50 points listed below $119 PP.

 

[Leight19]

I feel I have to mention on any discussion about 2042 resorts they only look bad when you ignore the time cost of money. Most people do math of price per point per year + dues but ignore fact that money could be put elsewhere. I used to do math on 4% roi because that’s my mortgage rate but would do 5% now (cd rates) or could go even 8 to 12% (range of return on mutual/index funds I have). Depending on what rate you pick this could add $6 to $14.4 a point on a $120/pt contract. So paying $6/pt/yr for 2042 is almost negligibly different then paint $2.5/pt/yr for resort with almost 50 yrs when you add this time cost and ~$8 dues ($20 vs $16.4 low roi, $28.4 vs $24.8 high roi).

 

[DanCali]

I feel I have to mention on any discussion about 2042 resorts they only look bad when you ignore the time cost of money. Most people do math of price per point per year + dues but ignore fact that money could be put elsewhere. I used to do math on 4% roi because that’s my mortgage rate but would do 5% now (cd rates) or could go even 8 to 12% (range of return on mutual/index funds I have). Depending on what rate you pick this could add $6 to $14.4 a point on a $120/pt contract. So paying $6/pt/yr for 2042 is almost negligibly different then paint $2.5/pt/yr for resort with almost 50 yrs when you add this time cost and ~$8 dues ($20 vs $16.4 low roi, $28.4 vs $24.8 high roi).

It’s a bit hard to follow the analysis when described in words.

Where I get lost in the description is you are not paying $6/pt/yr vs $2.5/pt/yr. You are paying the purchase price up front so that is already a present value. On similar contract size, it can be just a 20% difference But then one asset reaps benefits over 17 years and the other over 40-50 years. Both have no residual value when they expire.

So if you assume that each asset generates a “benefit” worth double the dues (ie in present value terms I pay $8 in dues but it’s worth $16 because I rent it or save in accommodation costs) the difference will be very substantial. With a high enough discount rate you’d actually never even break even on the 2042 asset.

Also, you are correct about discounting and time value of money. But don’t forget that the dues, and annual benefits should also increase by about 5% per year which offsets the discount rate.

 

[DanCali]

I just sold a 40-point OKW 2042 contract, fully loaded for 115 PP. I had 2 full-price offers and one at $105 within the first 2 hours of listing. I paid $80 PP for the contract in February (see the ROFR and Closing Time threads for verification).

In looking on the aggregator sites, I don't see any contracts of less than 50 points listed below $119 PP.

Did you buy with the intention to flip or was it too tempting given prices? Or just buyer remorse?

On that size contract the closing costs when buying are about $10-$15/pt? So clearly you had some motivated buyers!

 

[larry47591]

Posted this in the closing thread but will put it here too. Just a heads up if you are waiting.

 

[Leight19]

It’s a bit hard to follow the analysis when described in words.

Where I get lost in the description is you are not paying $6/pt/yr vs $2.5/pt/yr. You are paying the purchase price up front so that is already a present value. On similar contract size, it can be just a 20% difference But then one asset reaps benefits over 17 years and the other over 40-50 years. Both have no residual value when they expire.

So if you assume that each asset generates a “benefit” worth double the dues (ie in present value terms I pay $8 in dues but it’s worth $16 because I rent it or save in accommodation costs) the difference will be very substantial. With a high enough discount rate you’d actually never even break even on the 2042 asset.

Also, you are correct about discounting and time value of money. But don’t forget that the dues, and annual benefits should also increase by about 5% per year which offsets the discount rate.

My main point is if you are just calculating the cost as price per point per year and dues (which most do) you’re missing a large portion of the cost of ownership. If you calculate an assumed value of contract over lifetime you can get much different numbers depending what you assume the point to cash rate projects at for next 50 years. An unpopular opinion I have is most people greatly underestimate the cost of ownership and to me break even is something like $25 a point compared to discounted room rate (this is even worse when buying direct). I think economically it would always make more sense to rent points vs own but ownership gives you more control when booking and higher chance of getting what you want/less hassle. You can also say ownership is a hedge against room rate inflation but I personally don’t think room rates outpace my anticipated roi on other investments.

 

[Galactic Reversal]

An unpopular opinion I have is most people greatly underestimate the cost of ownership

I tend to agree, this is part of the reason why I started my site. Beyond just analyzing the disboards data, I was hoping to provide tools to help people decide if DVC is a good financial decision for them. I've been putting it off, but I think my next project needs to be a PV/cash flow projection/breakeven tool.

 

[Hiddenmickey75]

Hiddenmickey75---$135-$15035-100-BLT-Oct-0/21, 28/22, 157/23, 100/24- sent 6/28, passed 7/20

I can't believe I was able to get this contract at this price!! 5th different home resort, time to start looking for number 6.

 

[tom1944]

I factored in the value of a commitment to vacation.

The other major factor was the receipt of money (accrued vacation time payment) that I considered found money.

 

[DonMacGregor]

Did you buy with the intention to flip or was it too tempting given prices? Or just buyer remorse?

On that size contract the closing costs when buying are about $10-$15/pt? So clearly you had some motivated buyers!

$80 PP was too tempting. Decided I didn't need them, and put them up for sale and bought more Aulani points.

 

[DonMacGregor]

I factored in the value of a commitment to vacation.

The other major factor was the receipt of money (accrued vacation time payment) that I considered found money.

I'm sorta from this school of thought. At my age (59), my investments are in place, and my retirement portfolio is right where it needs to be. The needle isn't going to move significantly if the amount of cash we are talking about was instead in an investment account somewhere. Plus, I'd be spending the cash on other vacations anyway (as we still do because Disney is by no means our only vacation destination). It's what we used to call "Vegas Money", i.e. money that you not only can afford to lose, but should go in expecting to lose (and hopefully being pleasantly surprised when you don't). DVC is almost a (relatively) expensive hobby.

 

[Bearval]

$122-$19520-160-BLT-Jun-0/22, 160/23, 160/24 2023 Sent 27-Jun-2023 Passed 20-Jul-2023

 

[sndral]

The other advantage of the 2042 resorts is that the points charts are so darn cheap! A BC 2BD is cheaper than a VGF (I know) or RIV (I think) 1BD for the dates I was looking at, and we just love the location.
…

IMO, this is a factor that should be part of the calculations of ‘value’ per point but is difficult to quantify because it’s unique to each individual & depends on view & villa size they plan to book.
I compared a hypothetical 1 week vacation starting tomorrow at BWV v. Riv.. I chose BWV because they’re both Epcot resorts, they’re approximately the same size, both have cheaper standard views, & MFs per point are about the same.
A 2 br. standard view next week would cost 253 pt.s at BWV v. 368 pt.s at Riviera.
If I paid $120 per point to get enough points for a 2 br. standard view at BWV it would cost $30,360, at Riv. $44,160. If I invest that $13,800 savings @ 5% for 18 years I have $33,211, @ 8% $55,145.
Then I have to add in carrying costs, BWV MFs are $8.53 x 253 points = $2158. Riv. MFs are $8.50 x 368 = $3128. So my 2 br. standard view Riv. villa currently costs $970 more per annum in MFs. If I throw that $970 per year in w/ my original $13,800 my gain after 18 years @5% is $60,500, @8% it’s $91,472. MFs will go up & they’ll go up more for Riv. in my hypothetical because I’ll have to pay on more points - so my numbers are conservative.
In 2042 BWV’s residual value is 0, thus to break even my 368 restricted Riv. points need to be worth $248 per point (8% BWV invested savings) or $164 per point (5% BWV invested savings.)

 

[varyth]

varyth---$270-$28503-100-VGC-Sep-0/21, 0/22, 150/23, 100/24- sent 6/30, passed 7/20

Just got the call from Mason!