Would we be crazy to buy DVC when we don't even own a house?

[lovespugs]

This is going to sound like a strange question, but DH and I are seriously thinking about buying into DVC. We are a young professional couple, and we currently rent an apartment, partly because we're not ready to commit to our current city being our forever home. Is buying DVC before we buy a house having backwards priorities? We've been averaging 1 week a year at WDW since we started going about 4 years ago, and I've crunched all the numbers and it looks like it will be a good deal for us.

[CaptainMidnight]

This isn't going to be the answer you probably want to hear, but if your asking, my recommendation is that the house comes first. You can easily rent points for future vacations pre-house and take advantage of great travel deals. But my recommendation is to wait until after the house purchase.

Good luck.

[tiberius]

I don't see any problem as long as buying into DVC now does not adversely affect your ability to buy the house of your choice when the time comes.

[lovespugs]

Wow - thanks for the quick replies! I really don't think purchasing DVC would change the timing of a house purchase. We should be able to pay off 150 points within a year, and we weren't planning on buying a house for 2 - 3 years. I mostly just think our families will think we're crazy for buying a share of a vacation house before a real house. But, they already think we're crazy for wanting to go to WDW...again.

[Disney Doll]

I'll tell you a little story.

DH and I were there in 19991 on our honeymoon, and DVC was just being started. They were building OKW at the time, and selling it.

I said that I thought that it was something we should look into, as DH had fallen in love with WDW(he had never been prior to our honeymoon!!!), and we knew it would be a place we would be returning to frequently. DH, who is a realtor, siad that we should buy a house first and wait on the DVC. I told him that I thought that buying the DVC then would not adversley affect our ability to purchase a house, when the time came, as the monthly DVC payment was very manageable on both our salaries.

Three years after we were married, we bought a house, all the while going to WDW once and sometimes twice per year, usually staying at a moderate or a deluxe.

When we finally bought DVC in 1997, we calculated that had we bought it in 1991, we'd have had it paid off by then, relatively easily with a decent monthly payment.

My advice is the same as the other poster who said as long as it is something you can afford and having that monthly payment will not adversely affect your ability to purchase a house when the time comes, then go for it. Especially since you are unsure of where you are going to settle. You could be in limbo for several years, and during that time you could almost pay the DVC off.

[Goofy's Mum]

Personally, I don't think you are crazy. We do not own a house either, mainly because the mortgage would be prohibitive for us at this time. So, instead of denying ourselves any pleasure, we opted to buy into DVC, and have absolutely no regrets. We know we will have a house some day, but we prefer to enjoy our vacations until that time. We can always sell our DVC if need be, so we look at it as an investment.

[PamOKW]

It depends on what your priorities are. There are lots of things people buy that could go toward a house. If a house is what you really want, you eliminate those purchases. If a house isn't a priority, then spend your money as you choose.

I look at DVC more like a car purchase than a true real estate purchase. It's something that you like and you buy the model you most enjoy and that you can afford.

It's possible that your entertainment/vacation budget is equal to what DVC might cost you. It's money you might be spending anyway.

[Granny]

I think it's kind of apples and oranges....I look at DVC as a way to make vacations at luxury accommodations affordable. I don't look at it really as "buying a vacation home", like you might buy on a lake somewhere. To me, buying a vacation home before a permanent residence sounds a little backwards.

But pre-paying vacations....well, that's a different thing. Especially if you're going to go the WDW anyway every year. As has been pointed out, you can go every year until you decide to buy DVC and then what happens?

1. You probably pay more per point in 4-5 years for DVC membership.

2. You have racked up 4-5 years of hotel bills at WDW resorts that could have gone towards your point purchase.

3. You have 4-5 less years to enjoy DVC since it all expires in 2042.


My advice, if you're planning on going every year anyway regardless of DVC purchase, would be to take the plunge if you can afford it and it doesn't hamper your ability to handle other major purchases like automobiles, house, etc.

Good luck!

[Mouse Ears]

This is all opinion here, but that's what you asked for. Right?

I think that if you can afford to pay off DVC pretty quickly and the dues will not be a problem for you in the future, then you should buy now. Why? Because you will start to recognize the savings right away. The biggest regret you will hear on this board regarding DVC purchases is 'not buying sooner'.

We purchased this year after watching the prices climb for 2 years. I wish that we would have bought sooner, saved money on the buy-in, and had more trips (2 extra years of points). DVC will expire in 2042, so the sooner you buy the more you get for your money.

As far as a house, don't underestimate the expense that owning a home can be. I am a happy homeowner, but I was surprised by all the little expenses that came up, even things you don't think much about (like trash cans, yard care stuff, higher utility bills, tools, repairs, and on and on) can add up quickly.

Best of luck with your decision!

[SCDizneyDawn]

Hi! I am not a homeowner either and we own DVC. When we first looked at Disney, we had the same thought some have expressed, we will wait until we have purchased a house and make sure we can afford this on top of the house. At the time our apt was free with my husbands job, but we were assuming that would not last forever. Then I decied to make a major change in my job and now the apt comes with my job, so I decied that I had waited long enough, and we finally purchased in 2000. If we had purchased when we first looked at DVC, we would have paid $12 less per point. I will not say that we would have had our morgage paid off quicker, cause we keep adding on, and dont seem to be getting any closer to finishing our payments!!!!!;) My parents were surprised we did this prior to buying a house, but they understand that a house may not ever be part of my future!!!

Good luck with your desicion.

[Richyams]

I just wanted to discuss not buying a house until you were committed to the area.

The way real estate has been going, you should own now for sure, at least a condo. Our first home was a condo. Being a condo, its pretty easy to rent out and renting has become no trouble at all. Even the region thing is no big deal. We bought it in upstate New York in '91, we had a negative cash flow of $125 per month, today its just about even. We paid a little over 100k, like 107k, today we owe 72k and its worth 165k.

Same thing with this house I am living in now. We weren't expecting to spend that long in Florida, we researched renting and ended up buying a tiny house for 137k about six years ago, today its work 230k.

We didn't even get lucky and buy at the right time. That condo was worth less than we owed at one point. it was tempting to sell....but my daddy always told me that real estate ownership was the most important move you could make financially. It would protect from inflation and appreciate more surely than almost anything.

My opinion is to buy both now. Buy a condo and 150 points.

[Dean]

You should not buy DVC when you can't afford a house but chosing to rent for the reasons you state is different. Don't use the money you should be saving for a house but there's certainly no rule saying you must own a house first. IF you could afford a house and DVC and chose to buy DVC now, go for it if it's otherwise right for you.

[disny4ever]

interrupt your ability to purchase a home. If not, why wait. You have said you go for a week every year. If you stay onsite and like the better accomadations, DVC would suit you well and would be a good investment. Remember only 39 more years of DVC to go.
Good luck, I have a feeling that you will soon be a DVC owner.

[CarolMN]

As others have posted, it really depends on your values/priorities and the amount of discretionary income that you have/will have to take relatively expensive vacations.

As you know, descretionary income is what you have left after the other more important things are taken care of. For us, uses for our money that came ahead of DVC included:

buying a home/saving for the home,

having 6 months of savings that can be tapped in an emergency,

saving for retirement,

saving for our daughter's education

Paying off any student loans

not having any credit card debt (we pay off every month)

Fortunately for us, by the time we found out about DVC, we had done or were able to do all those things and still take nice vacations. DVC turned out to be a great deal for us. Sounds like you may be in that same sitaution.

If you are comfortable that you have enough descretionary income for DVC, then go for it! Don't worry about what anyone else might think - they probably do not have any idea of your financial situation or your idea of a good vacation!

Best wishes!

[mrsdon]

I think if its your money you should do what you want to do with it,
My Dh was in the navy for th first 18 years we were married.
We never bought a house. We did purchase a moboiel home and the navy was kind enough to move it around for us. My dad was in the AF.
Im saying all this because I never owned a home until we moved to Memphis ane he retired from the Navy. Im not a big one on owing homes.

[jcodespoti]

We are all nuts!!! spending millions (collectively) on a mouse!!!:p :p :p :p

[ZerasPride]

My husband and I do not own our home. We are leasing a townhouse which is larger than my sister's bungalow. Of course she owns hers and we don't but we've got lots more room and the ability to relocate (someplace warm and sunny) when DS graduates from high school in a couple of years. I couldn't see putting off a DVC purchase just because we don't own a house. It's not like we couldn't go out and buy one tomorrow but we choose not too. Like the OP, we go to Disney every year (sometimes twice a year) and it just made sense to us. Will we ever be homeowners? Who knows, it's not in our immediate future that's for sure.

I hope you make the right decision for you and your family!

[Lesley]

We are not home owners either...being that when we buy a house we want it to be in the area we want to settle in permanently. We do have plans...to move and then get a house. But we've been DVC members since 2000.

Financially, its worth it to join DVC if you're going to WDW every year as it is....and that might actually make it easier for you to have the resources to buy a house when the time is right.

We also considered DVC in the early days...1994. But at the time we just didn't think we could do it....we wanted to focus on buying a house. Almost 10 years later, we still don't have a house of our own (and don't want one yet....). But we count DVC as one of the best decisions we've ever made.

Its funny, I was just recently telling a friend of mine about our DVC decision and she just said "really, its just another sort of alternative lifestyle!" LOL Which made me laugh since DVC is about the most mainstream thing I'm a part of!

[Pumbaa_]

OK, just have to add my 2 cents ;)

it sounds like you are a young couple and deciding where you want to settle. That is an excellant reason to put off buying a home. (and again, not everyone wants to own their own home, but if you do and have decided that that purchase is a couple years away, it sounds like you have talked about your goals and where you want to be in a few years)

In the big scheme of things, a DVC purchase is not that much for 150 points. It is about half the price of a new car, being what they are. And if you both have good jobs and renting, you probably have a good chunk of disposable income. The cost of your deluxe hotel stay over the next few years is the price of your DVC membership.

I personally never want to be a landlord (to address the buy a condo, you can rent it out later) so I know I would never wantt o do that.

Anyhoo, buy, have a blast, secure your vacation destination costs for the next 39 years at todays prices! (And do you HAVE to tell your families? ;))

[Aurora3]

Since you've asked for opinions...If you were committed urban dwellers and your lifestyles/careers such that you couldn't possibly live anywhere but a high cost urban center (NYC, SF, Chicago, Honolulu) I would say that putting your life on hold until you can afford a house is crazy.
But I see that you live in a fairly reasonable cost area. I'd go with Richyams suggestion and get both. Why is it you aren't thinking of buying for 2-3 years? If you have the downpayment together now and the income to support a mortgage of $X, why not instead look for something in the $X minus $Y range that will allow you to make downpayments on both a house/condo and DVC points and also make both mortgage payments. You wouldn't be looking for the home of your dreams - just a nice little something to live in and take the tax break from for a few years. Then off you go to wherever it is that you believe you want to settle for a longer period of time, selling that first house/condo to pave the way for your next one. Meanwhile you will continue to enjoy your DVC vacations each year and continue to pay down on that financing.
But then every so often I enjoy moving. I'm on house #3, city #3. I'm hoping the next city I buy in is Orlando.

[lovespugs]

Thanks for all of the replies! I've never had this many responses to one of my questions before!

DH and I had a long talk over dinner, and we decided to purchase DVC! We just resigned our lease at a really great discount, so we're locked into renting for at least one more year anyway. Since we plan on taking at least one week-long vacation to WDW each year for the forseeable future, I think DVC is really going to pay off for us. And as long as we have a little extra discretionary income now, pre-house and pre-kids, we might as well buy in sooner rather than later.

Thanks again for all of the opinions and suggestions. I think we've found the solution that's right for us!

[Goofyzgurl]

We don't own a house either, but just made the decision to buy dvc. We were looking at buying a house right before we bought dvc, but since we decided against the house, we did the next best thing and bought 200 points. For us it just isn't feasible in the scheme of things. DH is in the military and we MIGHT be moving in two years. By the time we have a house built we MIGHT have 1 1/2 years here...also we didn't want to be hindered with renting/selling a house before me moved. My dad was in the military too, so it wasn't until he retired that they bought a house. We've moved every other year so we've never even thought about buying. Now if we had bought dvc when we first toured we could've saved at least $12 like the other person who posted.

For us it was a good decision b/c we had been going to wdw for the past four years, at least once a year. The decision is yours and I don't think you have to worry about what family/friends think b/c you will be the ones to live with the decision so just make one that's right for you. Anyways, no one would know that you owned dvc unless you told them.

[jimmytammy]

This is advice from a building contractor. If buying DVC does not affect your desire to own your own home soon then I think it makes sense to buy DVC. You sound like so many others who can go to WDW and be satisfied. Let owning both be goals for you. I will say to concentrate on getting that home bought before little ones come along, love em as much as I do, my 2 kids eat into our pockets way more than you can imagine.


Good luck on your decision!!

Jimmy

[Pumbaa_]

Originally posted by lovespugs
Thanks for all of the replies! I've never had this many responses to one of my questions before!

DH and I had a long talk over dinner, and we decided to purchase DVC!

Congratulations!

[Disney1fan2002]

I don't think whether or not you own a house has much to do with the interest in Disney Property you will be purchasing. Some people can go their whole lives without ever owning a home. My uncle was one of them. he certainly had the money to buy a home, but he liked to travel, and the money he would of spent fixing plumbing, upkeep of the house, unexpected expenses, ect...he was happy to just leave all that to a landlord.

You sound like you and your husband do not have an issue of whether or not a home purchase is affordable, so I would say, go for it! You seem like you have your finances all set..you say you can have it paid of in a year..that would be great!

Buy it and enjoy it!

[brucec32]

Originally posted by Goofy's Mum
Personally, I don't think you are crazy. We do not own a house either, mainly because the mortgage would be prohibitive for us at this time. So, instead of denying ourselves any pleasure, we opted to buy into DVC, and have absolutely no regrets. We know we will have a house some day, but we prefer to enjoy our vacations until that time. We can always sell our DVC if need be, so we look at it as an investment.

An investment appreciates, a DVC membership may well depreciate. But the membership isn't your biggest problem.....

Bankruptcy courts are full of people who had "deny no pleasure" attitudes. Disney vacations, even modest ones, are crazy if you can't even afford a house payment. You still have travel, park passes, food, etc. to pay for, even with DVC savings.

If you can't afford a house mortgage nowadays with rock bottom rates, you may never be able to as rates rise back to typical levels in the future.

If you can't even afford a mortgage payment, how are you going to come up with 20% down on a house to avoid paying PMI? (required insurance to cover the lender if you can't make the payments). Not having sufficient down payment will cost you much more than you save with the DVC. ($100-$200/month!)

Every year you rent instead of own means you lose out on appreciation and tax savings of home ownership. We have lived virtually free the last 5 years due to our home's value going up and the tax deductions on the interest.

But to each his own. Just please don't vote for higher taxes on me to cover your medical costs when you reach age 65 and dont' have a pot to #### in. I'm already paying for the geezers who lived it up 25 years ago.

[Goofyzgurl]

*looking at the above post *Wow, that's pretty harsh.

[Pumbaa_]

That is a little past harsh. :rolleyes:

[Disney1fan2002]

more than harsh, and a bit uncalled for. Where is it written that people have to buy a home? Just because people choose not to buy a house does not mean they can't afford it. Some people just don't want the hassle of home ownership. It is alot of responsibility. And it is time consuming. The original psoter did not say should could NOT afford a house. She said they were not in the position to buy one, for other reasons other than not having the money.

How full are the bankruptcy courts on the people who DO own a home and still "deny no pleasure" even if they are house poor? I live in an area where young couples live in these $700,000+ homes, and they are not yet 30. They have these HUGE houses and maybe one or two kids. Why do they have a house so big? I am getting off onto a totally different subject, but the point I am trying to make is, having a right to purchase vacation timeshare should not just be the right of a "home owner". :p

[niks81]

Everyone is different and therefore has different priorities....that being said, I bought into DVC right after I turned 20 and I did not own a home at that time....but I do now! We didn't have any problems either when it came to buying the home...if its something you think will really work for you then I think you should go for it.

I agree that the above post was totally uncalled for also :rolleyes:

[disneyberry]

:rolleyes: to brucec32's post.

anyway.

no, i don't think it's that crazy to buy DVC before you buy a house. as others have mentioned, it does depend on the situation though.

my dbf and i are also young (mid 20s) and we rent our apartment.
unlike the majority of early-20-somethings, we have zero debt and we saved and saved like crazy during the years immediately after college. (and managed to not lose much in the stock market... dumb luck that we didn't invest much? :p )

travel is very high priority to us. we travel 2 to 3 times a year. at least 1 Disney trip a year, plus 1 or 2 other locations a year.

we also are not sure where we want to settle. by the time we realized we should've bought an apartment a few years ago, we had decided we wanted to leave NYC :( we just haven't had the heart to actually move yet. probably 2004 is when we'll relocate.

this January, i reviewed our finances and budget, and came to realize that we just are not likely to give up our annual trips to WDW. we're willing to (and have already) cut back on a lot of other things in order to not dip into our savings during this economic low; but it looked like WDW expenses would only be cut as a super last resort.

that's when i started reading up on DVC, and we finally decided it was the right thing to do. we're going to continue travelling to WDW on a regular basis, and we'd continue to stay on Disney property.

so, a little over a month ago, we bid for a small resale contract, and now we're in the middle of closing on it. :) yes, this did take a little chunk out of our savings, but only a little one, so we're okay with it.
i'm not sure if we would've done this if we couldn't afford to pay cash for it though... i'd hate to start having debt just for DVC.

[chrissyk]

Originally posted by brucec32
An investment appreciates, a DVC membership may well depreciate. But the membership isn't your biggest problem.....

Bankruptcy courts are full of people who had "deny no pleasure" attitudes. Disney vacations, even modest ones, are crazy if you can't even afford a house payment. You still have travel, park passes, food, etc. to pay for, even with DVC savings.

If you can't afford a house mortgage nowadays with rock bottom rates, you may never be able to as rates rise back to typical levels in the future.

If you can't even afford a mortgage payment, how are you going to come up with 20% down on a house to avoid paying PMI? (required insurance to cover the lender if you can't make the payments). Not having sufficient down payment will cost you much more than you save with the DVC. ($100-$200/month!)

Every year you rent instead of own means you lose out on appreciation and tax savings of home ownership. We have lived virtually free the last 5 years due to our home's value going up and the tax deductions on the interest.

But to each his own. Just please don't vote for higher taxes on me to cover your medical costs when you reach age 65 and dont' have a pot to #### in. I'm already paying for the geezers who lived it up 25 years ago.

The OP of the comment you responded to is from MA. I'm from MA. Houses here cost A LOT. My house is quite small, is a cookie-cutter subdivision house, has a tiny lot, and is over an hour from Boston with traffic (and there's always traffic!). It is worth over 400K. The houses here sell before they even hit the MLS, so "bargains" like my 400K starter home aren't even easy to find. We got extremely lucky when we purchased our house JUST before the incredible run-up in housing prices. Had we waited, we'd NEVER have been able to afford a house. A decent-sized house (2000 sq. feet) goes for upwards of $500K in my average MA town. What I consider a big house (2500 sq. feet) goes for closer to 3/4 of a million dollars. My town is not even that nice and the schools are lousy! You should see what the houses in the nice towns go for. Please don't fault the OP of this comment for not being able to save a downpayment or afford a house here. Not too many people can right now. Besides, they could end up upside-down on the mortgage if these awful housing prices ever come back down. My husband and I were born and raised in MA, but come next year, we're moving to a state where we can actually afford a decent-sized house in a GOOD school district.

[Jen D]

It definietely all depends on where you live.

Recently in the park a lot of us were commisserating about not owning homes yet because they are so expensive here, and our jealousy of our friends from our hometowns who had good-sized homes for small prices-- most of us would be considered upper-middle class anywhere else, but here we're having a hell of a time coming up with down payments for a home, while we pay shockingly high rents on our apartments. Someone said-- well, isn't the thing in New York, is you rent an apartment and then buy a cheap country house to escape to? Just an idea to turn the conversation on its ear. I personally wouldn't buy a "second home" before a first home, but it happens here. I know the other solution is move somewhere else, but for those of us in certain industries, it isn't that easy.

Our family decided against dvc for now, but we're not going to quit vacations until we get a down-payment. With the price of a down-payment here, we might never get a vacation again. It's worth noting that the buying in-cost of dvc is about a sixth of what it would cost us to put down a down-payment on an apartment in our area that is roughly equivalent to what we live in now-- a badly in need of renovation duplex with two bedrooms and one bathroom.

[Mousefanz]

Imagine how boring life would be if everyone did everything in life in the order it was supposed to happen... blah!

As long as they aren't going to come take you away to the poor house - go for it.
After you buy a house you never have any money anyway (lol) so the way I see it, you already have your vacations paid for. Smart move!!

:D