Factors to Consider When Buying a DVC Contract

Are you ready to buy a Disney Vacation Club (DVC) resales contract? Are you feeling a bit overwhelmed by all the choices? Well, I can help. I’ve been where you are. Allow me to tell you the system that I’ve used to choose the perfect membership. Here are the factors I consider when buying a DVC contract.

What’s the Price?
Let’s be realistic here. This factor matters more than the others in totality. We live in a capitalist society, and aspects of capitalism bleed into every purchase that we make. Would anyone pay $999 for an iPhone X if they could get it for $99? Of course not. Now, that doesn’t mean that you should buy an iPhone from the back of some dude’s truck. Theft is theft. What we’re discussing is that each purchase is a negotiation.
When you’re looking for new televisions, you’ll monitor various websites for sales. If you have a gift card or the like, you can lower the out-of-pocket expense even more. DVC doesn’t have coupons or gift cards or the like. It’s an open marketplace instead. A seller and a buyer negotiate via a broker, a trusted and reliable agent who ensures that both parties are protected during the transaction.
The goal as a buyer is to pay as little as possible for a contract. DVC resales are a moving target, too. Anecdotally, I had the opportunity to purchase 200 points at Disney’s Hilton Head Island Resort a few years ago. The cost was only $7,995, about half of what I’d expect to pay now. At the time, I was discouraged by another factor that we’ll discuss in a few topics…but I still feel like an idiot today.
Let me speak from experience here. The last thing that anyone wants is to feel non-buyer’s remorse for a contract you didn’t buy. As such, you need to pay close attention to all of the listings available on the site. I’m not joking when I say that you should research each and every one of them that’s in your price range. You may find a hidden gem that you wouldn’t have considered otherwise.
In evaluating contracts, your first step should be a determination of what you can afford. Once you know that, your goal is to unearth the best potential contract. Then, you’ll want to negotiate the best deal. Since we’re currently in a seller’s market, the price you see is probably close to what you’ll wind up paying, but keep this thought process in mind. DVC will exist for at least another 50 years. It won’t be a seller’s market the entire time.
For now, you need to identify the amount you can pay and then use the following topics to decide whether the price of the contract fits your needs.

Where Is the Contract?
I’m not location-dependent in a specific sense but I am in a general sense. I visit Walt Disney World the most, and so I prefer a contract at one of the DVC resorts in Orlando. I’m one of those members who believe that you should own where you want to stay.
For this reason, I’ve ruled out the other properties. I do like Disneyland (who doesn’t?) and have evaluated a few contracts at Disney’s Grand Californian Resort & Spa. I just haven’t been able to make the math work yet. Similarly, Hilton Head, South Carolina, is one of my favorite vacation destinations on the planet. As mentioned, I’ve researched DVC contracts there.
I simply don’t want to spend that money at a place that doesn’t have a theme park attached. Hotel accommodations in Hilton Head are fairly reasonable, which isn’t true of DVC resorts in the Deluxe Tier. Many of them start in the range of $400 per night, and that explains why DVC membership is such an amazing bargain.
When you evaluate contracts, you should factor in these decisions. Where are you most likely to spend your time? Are you sure that you can book a reservation at your favorite places at the seven-month window? If you’re comfortable about the answer to the second question, the first one is less important. It’s an individual choice.

Is the Contract the Right Size?
Every DVC shopper seeks a certain kind of contract. In the early days of DVC membership, most people wound up with 230 points. Over the years, the contracts in the 160-200 point range have maintained their popularity. Some enterprising sorts have deduced that small contracts are easier to sell since they have a smaller upfront cost. This strategy has led to rise of 50-point contracts, sometimes even 25-point contracts, as viable options. And then there are the whales who need 300 points or more in order to book that Disney’s Polynesian Village Resort bungalow for a couple of nights each year.
Wherever you fall on the spectrum, you’ll still have the same simple question. Is the listed contract the right size for your needs? To answer that thought, you must decide how you intend to spend your vacation for the life of the membership. It’s not easy to do when you’re new to DVC. In these instances, you should rely on the wisdom of those who have participated in the program for a while.
Personally, I prefer small contracts since I want to maintain flexibility. Should the need arise, I can ditch a 50-point contract quickly, although it’s kind of a non-issue at the moment. In a seller’s market, most listings sell fast anyway.
The drawback of owning multiple small contracts is that you must keep up with various member numbers and book multiple reservations for longer stays. You won’t have enough points on the individual contracts for the full length of your trip. For this reason, I’ve started recommending larger contracts to my friends. They often cost less in terms of price-per-point, too, giving them slightly better value.
You can’t go wrong with either strategy, though. In reading this, I’m confident that one makes more sense to you than the other. So, pick that one.

How Many Current Points Are Available?
This trick used to provide clever buyers with a way to maximize their investment. As you may know, some DVC contracts include “extra” points. When a member doesn’t use their points during a given year, they may bank their extras into the following Use Year. Should they decide to sell the contract, it includes those extra points.
When you find a 150-point contract with banked points, you have 300 points to spend by the end of the Use Year. That’s a nice splurge that allows you to spend more time at Disney this year. Alternately, you can “rent” your points online for a set price. These days, most DVC points are worth $15 or so. When you have 150 extra points, you should be able to rent them $2,250 worth. It’s a clever way to offset the cost of your purchase. You use points that come with the contract to lower your overall expenditure.
Alas, many people know about this strategy by now. DVC contracts with extra points tend to sell for more, which is understandable since they’re more valuable. You may have better luck with the corollary strategy, though.
Some contracts are stripped. The owner already went to Disney this year and spent the points. Alternately, they borrowed the points from the current Use Year to visit Disney last year. Whatever the case, you’ll find some contracts have little-to-no current points available for the Use Year. Don’t automatically rule those out.
Owners generally sell these contracts for less since they have less value than ones with points. As we already established, 150 DVC points has a value of $2,250 or so. You can skip the middle man on a stripped contract by purchasing it for less upfront money. You will have no need to rent the points to get back the money. It’s already written into the contract!
Lately, I’m a bigger fan of stripped contracts. I find that this strategy works well, particularly when owners are fair with their pricing on their listings. I don’t like protracted negotiations for DVC resales contracts. My first purchase turned out to be a divorcing couple, and that contract took forever to close. Since then, I’ve preferred stripped contracts since those sellers tend to set the price that they want and facilitate transactions in a timely manner. You didn’t have that negative experience, and so you may prefer contracts with extra points. That’s a totally reasonable conclusion.

When Does the Contract Expire?
This topic matters less to me than most. I’m the youngest member of my immediate family, and I don’t have children. When I write my will, my DVC contract will go to one of my wife or my nephews and nieces, which is kind of an awkward conversation anyway. I don’t look forward to deciding what happens when I’m finally too old and frail to visit Disney. I’ll make seven loved ones angry when I make one happy by willing them the magic of Disney.
For most people, the ability to deed a DVC contract is a powerful impetus. You can give your child or other loved one multiple decades of smiles after you’re gone. It’s a truly lovely way to extend your reach beyond your mortality. It’s a good reason why you should research small contracts, too. If you have more than one child, you can will a DVC contract to each one. The sentiment is so touching that it almost brings a tear to my eye.
Assuming that you’re interested in this forward-thinking kind of ownership, your strategy here is simple. Pick one of the DVC resorts that expire in the 2060s. That’s more than 40 years from now. By picking one so far down the road, you’ll guarantee that your family has multi-generational Disney vacations that will connect you for (possibly more than) your entire life. Isn’t that a touching thought?

How Much Are the Maintenance Fees?
Finally, I think about maintenance fees when I evaluate contracts. Realistically, this primarily applies to Aulani, A Disney Resort & Spa, Disney’s Hilton Head Island Resort, the twin properties at Disney’s Wilderness Lodge Resort, and (especially) Disney’s Vero Beach Resort. Each of them has current maintenance fees of in excess of $7 per point.
Now, this shouldn’t be any sort of deal breaker to you. I’m merely pointing it out as something I factor into the cost of ownership. Some contracts seem misleadingly low in price. Once you include the maintenance fees, however, the situation grows murkier.
For example, 100 points at Vero Beach costs $853 in 2018. These contracts expire in 2042, the same year as Disney’s Beach Club Resort. The maintenance fees at Beach Club are currently $6.44 per point. Paying for 100 points there would cost $644 this year. That’s $190 extra to own at Vero Beach.
What does this mean to you as an owner? Over the next ten years, that’s a difference of $1,900, assuming the same inflationary increases for maintenance fees on each one. For the total of 25 remaining years (including 2018), that’s a difference in maintenance fees of $4,750. If you would prefer to own at Beach Club, that $4,750 could possibly negate the difference in current listing prices. At a minimum, it should mitigate the pricing disparity.
I look at things like this to decide what I’m actually paying for my DVC contract. Clearly, I’m not just thinking about the cost today. I’m also weighing factors that will impact my lifetime ownership of the contract. Maintenance fees are more insidious since they’re the hidden (in plain sight) cost of membership. However, they’re also a reason why you could easily justify paying more for a desirable contract today since you’ll save that money over the next 25-50 years. It’s a lot to think about, but it’s important to take that time since DVC purchases are an investment in your future happiness.