Finding the unicorn- Subsidized Aulani

[DVChris]

I have two subsidized contracts and there is not specific verbiage in the contract. Escrow and the broker simply showed me the dues from prior years.
Great surprise, congrats neighbor!

 

[Squirrel29]

I have two subsidized contracts and there is not specific verbiage in the contract. Escrow and the broker simply showed me the dues from prior years.
Great surprise, congrats neighbor!

This is what I see on my statement.

AULV - Vac Ownr Opr Dev Credit

 

[Ashlotte]

This is what I see on my statement.

AULV - Vac Ownr Opr Dev Credit

In the "Annual Dues Transaction History" mine showed up as a "billing adjustment" credit. So the regular dues listed, but then a credit towards them to bring it down. If you take your total dues and divide them by how many credits you own, you will see the cost per credit. Regular dues are $9.14 for 2023, versus $6.87 for subsidized.

 

[Squirrel29]

In the "Annual Dues Transaction History" mine showed up as a "billing adjustment" credit. So the regular dues listed, but then a credit towards them to bring it down. If you take your total dues and divide them by how many credits you own, you will see the cost per credit. Regular dues are $9.14 for 2023, versus $6.87 for subsidized.

Yeah thanks, They are at the $6.87 rate. I even relooked at the contract and it said the rate was 8.67 for 2022.

But deeper in the contract I saw the original deed was March 2011. So I got very lucky.

 

[Lorana]

Yeah thanks, They are at the $6.87 rate. I even relooked at the contract and it said the rate was 8.67 for 2022.

But deeper in the contract I saw the original deed was March 2011. So I got very lucky.

That's an awesome surprise! Congrats!

 

[Ashlotte]

Yeah thanks, They are at the $6.87 rate. I even relooked at the contract and it said the rate was 8.67 for 2022.

But deeper in the contract I saw the original deed was March 2011. So I got very lucky.

Wow! That’s so lucky! Congratulations!

 

[AstroBlasters]

Congratulations on your pixie dust!

I just went down the rabbit hole in https://bocdataext.hi.wcicloud.com/search.aspx to see when my contracts were originally sold from Disney since they have not been uploaded yet to the website. 2014, 2016, and 2018.

If I were the seller, I would be ticked at my broker for costing me $$$.

 

[Squirrel29]

Speaking of subsidized contracts. One at DVC Resale. $145 per point 160 points. Marc uy.

https://www.dvcresalemarket.com/listings/aulani/aub1808/

 

[AstroBlasters]

Speaking of subsidized contracts. One at DVC Resale. $145 per point 160 points. Marc uy.

https://www.dvcresalemarket.com/listings/aulani/aub1808/

That’s about $49pp more than what unsubsidized is going for. That’s a 21yr break even with no TVM and 50yr break even with a 4% TVM on the additional $7840 in upfront costs. The most I personally would pay is a 19% premium ($114pp) to get a 10 year break even.

 

[Paul Stupin]

That’s about $49pp more than what unsubsidized is going for. That’s a 21yr break even with no TVM and 50yr break even with a 4% TVM on the additional $7840 in upfront costs. The most I personally would pay is a 19% premium ($114pp) to get a 10 year break even.

Agreed. $145 for a subsidized contract is not worth it, and kinda ridiculous.

 

[Jimmy Geppetto]

That’s about $49pp more than what unsubsidized is going for. That’s a 21yr break even with no TVM and 50yr break even with a 4% TVM on the additional $7840 in upfront costs. The most I personally would pay is a 19% premium ($114pp) to get a 10 year break even.

Totally agree. But someone will pay close to that for it. Lots of uneducated buyers out there.

 

[intamin]

That’s about $49pp more than what unsubsidized is going for. That’s a 21yr break even with no TVM and 50yr break even with a 4% TVM on the additional $7840 in upfront costs. The most I personally would pay is a 19% premium ($114pp) to get a 10 year break even.

Where do you guys find on average what these contracts end up going for? I feel like the asking prices are often inflated but I haven’t found anywhere that shows what these contracts are actually going for

 

[AstroBlasters]

Where do you guys find on average what these contracts end up going for? I feel like the asking prices are often inflated but I haven’t found anywhere that shows what these contracts are actually going for

I would watch the ROFR thread, but I’m not aware of a blog that specifically breaks down the Aulani subsidized vs unsubsidized avg resale price.

With that said, I personally would look at the lowest you think you can get an unsubsidized contract for (lots being offered @ $100pp) and then put together a spreadsheet to see when the breakeven between the upfront buy in (you can include TVM if you want) and a higher buy in unsubsidized with lower dues. Then adjust the buy-in price on the unsubsidized to decide what is a reasonable break even period for you. Over time the dues will dwarf what your buy in costs were, but I think it’s important to be realistic about potential holding times and what else you could be doing with your capital.

For me personally, I won’t do anything that has a breakeven greater than 10 years, too many things can happen in life. Thus, I would not pay more than $114pp at current market prices.

Someone else may have a completely different view where they think they will own the contract for 38 years and are willing to have a 20 year breakeven.

Many people on this board say that upfront costs don’t even matter because they will be able to sell it for what the paid for it and only the dues matter. I don’t subscribe to that philosophy, but it’s their money and they are entitled to their own opinion and outlook.

 

[intamin]

I would watch the ROFR thread, but I’m not aware of a blog that specifically breaks down the Aulani subsidized vs unsubsidized avg resale price.

With that said, I personally would look at the lowest you think you can get an unsubsidized contract for (lots being offered @ $100pp) and then put together a spreadsheet to see when the breakeven between the upfront buy in (you can include TVM if you want) and a higher buy in unsubsidized with lower dues. Then adjust the buy-in price on the unsubsidized to decide what is a reasonable break even period for you. Over time the dues will dwarf what your buy in costs were, but I think it’s important to be realistic about potential holding times and what else you could be doing with your capital.

For me personally, I won’t do anything that has a breakeven greater than 10 years, too many things can happen in life. Thus, I would not pay more than $114pp at current market prices.

Someone else may have a completely different view where they think they will own the contract for 38 years and are willing to have a 20 year breakeven.

Many people on this board say that upfront costs don’t even matter because they will be able to sell it for what the paid for it and only the dues matter. I don’t subscribe to that philosophy, but it’s their money and they are entitled to their own opinion and outlook.

I saw your Aulani contracts. You got a great deal on that 175 point one :X, almost made me consider taking back my own Aulani contract before the 10 days pass but after looking further back I saw people pay similar prices for my Aulani sub not that long ago and made me feel a little better . But yeah it wasn't exactly clear if the average prices listed on the sponsor site were what they were actually selling for vs being listed for.

 

[AstroBlasters]

I saw your Aulani contracts. You got a great deal on that 175 point one :X, almost made me consider taking back my own Aulani contract before the 10 days pass but after looking further back I saw people pay similar prices for my Aulani sub not that long ago and made me feel a little better . But yeah it wasn't exactly clear if the average prices listed on the sponsor site were what they were actually selling for vs being listed for.

What did you get your unsubsidized contract for?

You will probably feel better about your choice every December. Either way we are both going to have many wonderful trips to HI in our future, so we both win!

 

[intamin]

What did you get your unsubsidized contract for?

You will probably feel better about your choice every December. Either way we are both going to have many wonderful trips to HI in our future, so we both win!

I don’t have an unsub, I just have the sub 200 125pp. I know in the long run the sub helps but god your buy in price for your unsub was really good haha

 

[sethschroeder]

Totally agree. But someone will pay close to that for it. Lots of uneducated buyers out there.

Eh lots of talk of the TVM around here but lots of people view it as they pay more now and less later. That money is being spent either way so this is an easy way to get a lower long term payment on dues.

Now if you are trying to maximize all your financials no its not a good choice but some people have no interest in that especially when talking about money going in to vacations and such.

 

[AstroBlasters]

I don’t have an unsub, I just have the sub 200 125pp. I know in the long run the sub helps but god your buy in price for your unsub was really good haha

Sorry, I meant subsidized. My point weighted avg cost of the 3 contracts was 96, so you’ll be better off than me from years 15 to 38.

I do feel pretty good about that $85pp contract, but I only made it because I was content with 400 AUL points and would only add more for a smoking deal.

 

[AstroBlasters]

Eh lots of talk of the TVM around here but lots of people view it as they pay more now and less later. That money is being spent either way so this is an easy way to get a lower long term payment on dues.

Now if you are trying to maximize all your financials no its not a good choice but some people have no interest in that especially when talking about money going in to vacations and such.

I can’t help it if people don’t want to do some basic math, but they don’t have to buy a timeshare to go on vacation. And if they have made the choice to go resale on a DVC timeshare then they know that they have options and can compare the pricing on various contracts. (info removed)

200 points at $145pp is $29,000
200 points at $96pp is $19,200

The dues difference is $2.27pp or $454/yr.

Not adding in a bunch of inflation calculations, it would take 21-22 years to make up the $9,800 upfront difference, That’s not even counting TVM or potential financing costs.

Alternatively, they could invest $9800 into a bond fund paying a 4.6% yield and hide the account so that they don’t see it anymore. The interest it pays every year will make up the entire difference of the dues and they still have the principal.

OR use the $9800 to buy 100 more DVC points and sell them after 20 years. You just got even more vacations or better accommodations for the same amount of money!

 

[jkips]

I agree with your math here but do think that the $96pp price you are using is one that requires some time to find and negotiate while the $145 subsidized price is full offer side. Paying $49 or roughly 50% more pp for the subsidized doesn't make sense but there is a level where it does. The sponsor's site has the average resale price at Aulani in December as $108pp and a couple other subsidized dues contracts listed at $125pp and 130pp right now. At roughly $20 more per point my view is the subsidized contracts make more sense than the unsubsidized. It's likely a ~8yr breakeven ignoring whatever premium you are likely going to be able to sell your contract at if/when you do sell.

Also important in the math is where you think Aulani dues go in the future because as the dues go higher the savings per point also go higher. Subsidized dues are about 75% of unsubsidized dues. Back in 2018 the unsubsidized dues were $7.54/point while the subsidized ones were $5.66 for a difference of 1.88pp per year. At a 2.27 difference now the savings have gone up $0.39 or 20% over 5-years. My guess is that trend continues and especially so when looking out 5 to 10 years. .