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View Full Version : Risk Analysis Before Buying DVC


DougEMG
04-23-2012, 05:06 PM
There's been lots of discussion about the potential saving by buying DVC, but not that much on the risks associated with owning DVC. So what risks were you concerned about when you were looking into DVC.

For myself the risks I looked at were:

(1) Being unable to afford DVC and the ongoing MF. This one stopped me from buying for many years. Even though we went a lot of times, I preferred to pay out of pocket for each trip rather than making a long term committment. It wasn't till my mortgage was paid for and I had no debts of any kind that I was comfortable making a long term committment to DVC. When we first bought our house, my wife was informed that she might be getting laid off, and while luckly that didn't happen, it certainly made me very concerned of what could have happened in such a senario.

(2) Cost of getting to WDW. Living on the west coast I was concerned about how much flights could increase and if the potential existed for me to be unable to afford to get there. Related to flying but something that I had never planned or thought of was when my wife developed a fear of flying. For about 3 years she was unable to fly and every holiday had to be somewhere we could drive.

(3) Dues rising faster than hotel rates with the end result being that paying for a room with dues costs more than the normal hotel rate. I don't actually think this would happen while Disney is still trying to sell DVC otherwise it would make it too hard for them to make any cost saving arguement, but given that one can rent other timeshares for less then their MF, the potential does exist for the same thing to happen with DVC.

(4) Getting tired/bored of WDW. My daughter and I both like doing the same thing repeatily and don't get bored by it (I eat the same thing for lunch every day, but my wife can't stand doing that). My wife on the other hand wants to do different types of vacations (cruise, Europe, etc). Solution was to agree to alternate between WDW and something else each vacation.

(5) Needing to sell the contract for some reason (divorce, lost job, lost interest) and the contract is worth a lot less than what I paid for it. Because my breakeven point was after 6-7 years I was fine with taking this risk as the time period was so short. This is also why I bought resale. If the breakeven point had of been 10+ years, I would not have bought.

(6) Being healthy enough to go. Having not bought till I turned 50, one of my concerns is how long will I be able to use my DVCs. I tried talking my parents into going this year (they're in their mid 70s) and they didn't want to go as my Mom has bad knees and can't walk for more than 20-30 minutes (I didn't know this at the time) and we all know how much walking there is at WDW. So I deciede that if I get to use it for around 25 years (so I'll be in my mid 70s) I'll be happy.

Once I had thought about all the various risks and was happy with those risks, I then ran lots of numbers to make sure that it made financial sense to buy.

fmer55
04-23-2012, 05:26 PM
There's been lots of discussion about the potential saving by buying DVC, but not that much on the risks associated with owning DVC. So what risks were you concerned about when you were looking into DVC.

For myself the risks I looked at were:

(1) Being unable to afford DVC and the ongoing MF. This one stopped me from buying for many years. Even though we went a lot of times, I preferred to pay out of pocket for each trip rather than making a long term committment. It wasn't till my mortgage was paid for and I had no debts of any kind that I was comfortable making a long term committment to DVC. When we first bought our house, my wife was informed that she might be getting laid off, and while luckly that didn't happen, it certainly made me very concerned of what could have happened in such a senario.

(2) Cost of getting to WDW. Living on the west coast I was concerned about how much flights could increase and if the potential existed for me to be unable to afford to get there. Related to flying but something that I had never planned or thought of was when my wife developed a fear of flying. For about 3 years she was unable to fly and every holiday had to be somewhere we could drive.

(3) Dues rising faster than hotel rates with the end result being that paying for a room with dues costs more than the normal hotel rate. I don't actually think this would happen while Disney is still trying to sell DVC otherwise it would make it too hard for them to make any cost saving arguement, but given that one can rent other timeshares for less then their MF, the potential does exist for the same thing to happen with DVC.

(4) Getting tired/bored of WDW. My daughter and I both like doing the same thing repeatily and don't get bored by it (I eat the same thing for lunch every day, but my wife can't stand doing that). My wife on the other hand wants to do different types of vacations (cruise, Europe, etc). Solution was to agree to alternate between WDW and something else each vacation.

(5) Needing to sell the contract for some reason (divorce, lost job, lost interest) and the contract is worth a lot less than what I paid for it. Because my breakeven point was after 6-7 years I was fine with taking this risk as the time period was so short. This is also why I bought resale. If the breakeven point had of been 10+ years, I would not have bought.

(6) Being healthy enough to go. Having not bought till I turned 50, one of my concerns is how long will I be able to use my DVCs. I tried talking my parents into going this year (they're in their mid 70s) and they didn't want to go as my Mom has bad knees and can't walk for more than 20-30 minutes (I didn't know this at the time) and we all know how much walking there is at WDW. So I deciede that if I get to use it for around 25 years (so I'll be in my mid 70s) I'll be happy.

Once I had thought about all the various risks and was happy with those risks, I then ran lots of numbers to make sure that it made financial sense to buy.

double baords, very interesting:lmao:

ELMC
04-23-2012, 06:53 PM
double baords, very interesting:lmao:

You get some very different opinions over here than you do over there.

bababear_50
04-23-2012, 07:19 PM
Great Points hon!

I have seen huge price increases in flights over the past couple of years,not enough to make me stop going but enough to rethink two trips a year.

I paid for my contracts cash so I don't have to worry about monthly payments,,I really wouldn't risk taking a loan for DVC.

I have a monthly "Christmas fund" at my credit union which is what I use for my dues.

I bought small contracts because they are easier to sell if needed.

Bored~~Hmmm....well I must say I am not a park commando anymore,,I think DVC cured me of that. I will say I love my home resorts,and I am happy just hanging out at them. I do enjoy a visit to Downtown Disney.


I didn't buy until my late 40's and only after doing the Grand tour of all the DVC resorts in Disney World. I spent a week touring and investigating each resort.

Health~~just thinking about Disney World gets me on the treadmill,:yay:
I can only hope I have many healthy years ahead of me,but I plan to enjoy each and every day
I have right now.

Being a Canadian DVC owner--understood that I'd pay up big time if and when I sold my DVC contracts.

I think I knew more about DVC than I needed to when I bought my first contract BUT I had a Dad that was super dead set against "Timeshares' and I had to convince him that I knew my stuff ,,I almost sold him on buying in. Before he passed away two years ago he said to me "remember to have fun " -I know he was thinking about Disney.


Sorting through all the pros and Cons just means that you are a conscientious
DVC owner.

Hugs to you

Mel

Dean
04-23-2012, 08:13 PM
There's been lots of discussion about the potential saving by buying DVC, but not that much on the risks associated with owning DVC. So what risks were you concerned about when you were looking into DVC.

For myself the risks I looked at were:

(1) Being unable to afford DVC and the ongoing MF. This one stopped me from buying for many years. Even though we went a lot of times, I preferred to pay out of pocket for each trip rather than making a long term committment. It wasn't till my mortgage was paid for and I had no debts of any kind that I was comfortable making a long term committment to DVC. When we first bought our house, my wife was informed that she might be getting laid off, and while luckly that didn't happen, it certainly made me very concerned of what could have happened in such a senario.

(2) Cost of getting to WDW. Living on the west coast I was concerned about how much flights could increase and if the potential existed for me to be unable to afford to get there. Related to flying but something that I had never planned or thought of was when my wife developed a fear of flying. For about 3 years she was unable to fly and every holiday had to be somewhere we could drive.

(3) Dues rising faster than hotel rates with the end result being that paying for a room with dues costs more than the normal hotel rate. I don't actually think this would happen while Disney is still trying to sell DVC otherwise it would make it too hard for them to make any cost saving arguement, but given that one can rent other timeshares for less then their MF, the potential does exist for the same thing to happen with DVC.

(4) Getting tired/bored of WDW. My daughter and I both like doing the same thing repeatily and don't get bored by it (I eat the same thing for lunch every day, but my wife can't stand doing that). My wife on the other hand wants to do different types of vacations (cruise, Europe, etc). Solution was to agree to alternate between WDW and something else each vacation.

(5) Needing to sell the contract for some reason (divorce, lost job, lost interest) and the contract is worth a lot less than what I paid for it. Because my breakeven point was after 6-7 years I was fine with taking this risk as the time period was so short. This is also why I bought resale. If the breakeven point had of been 10+ years, I would not have bought.

(6) Being healthy enough to go. Having not bought till I turned 50, one of my concerns is how long will I be able to use my DVCs. I tried talking my parents into going this year (they're in their mid 70s) and they didn't want to go as my Mom has bad knees and can't walk for more than 20-30 minutes (I didn't know this at the time) and we all know how much walking there is at WDW. So I deciede that if I get to use it for around 25 years (so I'll be in my mid 70s) I'll be happy.

Once I had thought about all the various risks and was happy with those risks, I then ran lots of numbers to make sure that it made financial sense to buy.That's a good start. I'd add things like the desirability/quality of DVC and whether a given resort would stay in the system though this is likely only a major question for VB, HH and HI. I think you're asking the right questions, the difficulty is getting the right answers for you and then acting accordingly rather than on the emotions.

princesscinderella
04-23-2012, 08:28 PM
We decided to buy DVC because:
1. We finally had the money to pay cash for it
2. After pricing a week at Aulani next year and it was close to $10k, realized it would only take that 1 trip to pay for our initial investment as we were planning to go regardless of being DVC members.
3. We live 3 1/2 hours away so we go multiple times a year, airfare is not a factor for us.
4. Three small kids - want the extra space.
5. it's Disney!
6. We are in our early thirties so we will only be in our 60s when our contract ends (bwv)
7. Husband is a Dr so maintenance fees aren't an issue.
8. We can finally stop using my in laws points and getting the guilt trip.

fmer55
04-23-2012, 08:50 PM
You get some very different opinions over here than you do over there.

absolutely....can't wait to watch it unfold:surfweb:

crisi
04-24-2012, 01:07 PM
Quality of Disney in general. Many of us buy believing it will never change. But Kungaloosh!

Cost not only of airfare, but just of vacationing. Our first 'this phase' trip was when our kids were two and three. Park passes were practically free. Those kids are twelve and thirteen and now it's four adult passes, and they eat like adults, too.

Wanting to go other places. We managed this risk to only owning points for every other year, and it's a risk that is not a mere risk for us...this one is our reality and I'm glad it was managed up front.

When I first was aware of DVC, it was early in its inception on my first honeymoon. Since then, I've been divorced, gone through expensive fertility treatments, had an expensive adoption, and been very close to having our income cut by 1/2. Then, in a more stable financial picture, bought Dvc. Now I own a second home I'd never intended to have to keep a roof over the head of my brother in law. So it is the unexpected cannot plan for thing that money greases along.

permavac
04-24-2012, 01:42 PM
...So it is the unexpected cannot plan for thing that money greases along.

I am SOOOOOOO taping this to my wallet! Thanks for the LOL!

Terri

nalajms
04-24-2012, 03:16 PM
(6) Being healthy enough to go. Having not bought till I turned 50, one of my concerns is how long will I be able to use my DVCs. I tried talking my parents into going this year (they're in their mid 70s) and they didn't want to go as my Mom has bad knees and can't walk for more than 20-30 minutes (I didn't know this at the time) and we all know how much walking there is at WDW. So I deciede that if I get to use it for around 25 years (so I'll be in my mid 70s) I'll be happy.

Every time my mom talks when she gets older and can't walk as much, I offer to rent a motorized wheel chair. They seem to get a shorter line at the rides and shows! :thumbsup2