Can the numbers work out?

[moret1sm]

So we have shopped DVC since it was first offered at Old Key West, did the tour, and looking back realize we would well have gotten our money's worth.

Now being serious again so many years later, no mater how I play with the numbers, the best I can see is that it locks in today's prices for the next few decades. Seems to make more sense to buy a house/condo nearby and rent it out- use that money to fund our trips.

Has any one done the math to show how DVC membership can offer savings.

We will pay cash, no financing. Need 200 points. Don't care which resort is home. To compare, we usually stay at Deluxe or Moderate, would never otherwise consider a DVC villa.

Is anyone else in a similar situation, who actually has found how this makes financial sense?

 

[Missyrose]

So we have shopped DVC since it was first offered at Old Key West, did the tour, and looking back realize we would well have gotten our money's worth.

Now being serious again so many years later, no mater how I play with the numbers, the best I can see is that it locks in today's prices for the next few decades. Seems to make more sense to buy a house/condo nearby and rent it out- use that money to fund our trips.

Has any one done the math to show how DVC membership can offer savings.

We will pay cash, no financing. Need 200 points. Don't care which resort is home. To compare, we usually stay at Deluxe or Moderate, would never otherwise consider a DVC villa.

Is anyone else in a similar situation, who actually has found how this makes financial sense?

Without getting into the Xs and Os of the equations to determine whether you'd save money with DVC (a recent and LONG thread on this subject can be found here), I will say buying resale will make the numbers look much easier to swallow than buying direct through Disney.

 

[disneynutz]

Only you can determine if it makes financial sense for you.

Just because some people buy a DVC interest doesn't make it a good fit for everyone.

Bill

 

[moret1sm]

Thanks for the link and info. We have only looked at purchasing through Disney so far.

 

[Disneylvr4]

I was going to post the same conversation Missyrose did and I also agree w/disneynutz, it's a personal choice completely. Some sit and make calculations only purcashing if they feel it's a good investment (even then they don't use the term "investment"!), while others simply say they love Disney and intend to go often enough to make it worth while for them.

We decided to buy since we always go back, we have small children who enjoy the parks (and will for a long while yet) and mu husband and I enjoy the accomodations we get vs anywhere else that we couldn't afford to stay in otherwise if paying rack rate. Renting would also add up and some years we may not have the funds to go when we want to, so it's like prepaying for our vacations -we also paid in full and didn't finance which I think is a wise choice. We know we would return w/o the kids years from now and still enjoy all that Disney has to offer.

 

[Missyrose]

Thanks for the link and info. We have only looked at purchasing through Disney so far.

Do you have particular reasons why you'd only look at buying through Dsiney?

 

[bighoo93]

So we have shopped DVC since it was first offered at Old Key West, did the tour, and looking back realize we would well have gotten our money's worth.

Now being serious again so many years later, no mater how I play with the numbers, the best I can see is that it locks in today's prices for the next few decades. Seems to make more sense to buy a house/condo nearby and rent it out- use that money to fund our trips.

Has any one done the math to show how DVC membership can offer savings.

We will pay cash, no financing. Need 200 points. Don't care which resort is home. To compare, we usually stay at Deluxe or Moderate, would never otherwise consider a DVC villa.

Is anyone else in a similar situation, who actually has found how this makes financial sense?

Yes, it can save you significantly depending on your alternative. Mine was to rent points and stay in the same resort. After a relatively few number of years, buying resale would cost less than renting points. But I have no idea whether it would be better than your alternative of buying a condo and renting that out. You will really have to do some research to understand the costs and potential income involved.

 

[nalajms]

Is anyone else in a similar situation, who actually has found how this makes financial sense?

The only time it ever makes financial sense to buy DVC is if you always stay at Deluxe or Deluxe Villas, plan to go regularly over the next few decades, and you buy resale.

As for buying a condo/house, I wouldn't put much weight into rental or appreciation of the real estate. You should do a similar comparison of buying to renting. You can easily rent a 3bd house for a week (most of the year) for under $500. Mortgage interest + property tax + ins less any tax savings would still be more than that for a 100k house.

 

[moret1sm]

We really like to stay with Disney if ever possible. We were working directly with Disney because they were regularly contacting us, I know that's not a very good reason. They also pointed out that they are a quick close and with resales they hold a right of first refusal, like if the price was lower than their standards they could come in and buy out the points and keep you from buying. We just didn't really question, as horrible as that is. The customer service was really good. We were ready to buy, but when we compared what we would use if we didn't have a DVC membership to purchasing, considering maintenance fees, inflation, and opportunity costs (not putting $25000 into a CD or at least a high yield account) we kept breaking dead even in 40 years. The only guarantee seemed to be today's rates tomorrow, and we would come back, no matter what & have an awesome place to stay for the next 50 years.

So we walked away for a year, now we are paying for our December trip, and the $600+ per room per night (we need 2 rooms) and we are scratching our heads again.

For us Disney is a multigenerational family affair. We go with a good sized group. As my parents age, they contribute less, and I'm feeling it more. So DVC is sounding pretty good.

It just would be nice if there was some black and white apples to apples comparison.

I will investigate in resale though, since from this thread that seems to be the way to go.

 

[Missyrose]

We really like to stay with Disney if ever possible. We were working directly with Disney because they were regularly contacting us, I know that's not a very good reason. They also pointed out that they are a quick close and with resales they hold a right of first refusal, like if the price was lower than their standards they could come in and buy out the points and keep you from buying. We just didn't really question, as horrible as that is. The customer service was really good. We were ready to buy, but when we compared what we would use if we didn't have a DVC membership to purchasing, considering maintenance fees, inflation, and opportunity costs (not putting $25000 into a CD or at least a high yield account) we kept breaking dead even in 40 years. The only guarantee seemed to be today's rates tomorrow, and we would come back, no matter what & have an awesome place to stay for the next 50 years.

So we walked away for a year, now we are paying for our December trip, and the $600+ per room per night (we need 2 rooms) and we are scratching our heads again.

For us Disney is a multigenerational family affair. We go with a good sized group. As my parents age, they contribute less, and I'm feeling it more. So DVC is sounding pretty good.

It just would be nice if there was some black and white apples to apples comparison.

I will investigate in resale though, since from this thread that seems to be the way to go.

The biggest mistake you could make is to go by the information Disney tells you. Do you research via other avenues on both resale and direct. If you're worried about making the numbers work (which is a good first step) you will likely have a hard time making the direct pricing work, especially after the latest set of price increases.

As for your upcoming trip... If you run the numbers, you may find that you could buy resale and still pay cash for your trip and come out ahead of buying the points directly from Disney, but again, you have to run the numbers.

DVC is a long-term commitment and it isn't one I'd suggest you make based on one upcoming trip. There's lots to read here and elsewhere and there is much to learn before making a decision one way or another.

 

[moret1sm]

We know we will come back at least every 2 to three years and spend about $7000-$7500 on accommodations (in today's $)

We understand the banking and borrowing of points alright, and it seems 200-250 would get us by, but then on top if that purchase, the maintenance fees say, $4 average over 50 yeas on those 250 points, is another $50,000. And fees seem to be increasing a little faster than the rate of inflation, right?

I know that by now, since our first trip in 1990, we've spent much much more than the cost of that, but now we are slowing down, the trips are spacing apart, but at a regular rate.

It's one of those if we knew then what we knew now kind of things...

But I do think we will go at least every 3 years, we do prefer deluxe and we do travel at peak times like Easter & Christmas, so it's a tough call

 

[moret1sm]

Are any resale companies more reliable than others?

 

[DannysMom]

Are any resale companies more reliable than others?

The Timeshare Store sponsors this forum & generally gets good reports. Many have purchased through Fidelity, including me, but lately there have been troubling reports about them not getting back to prospective buyers w/r/t offers, rejections, negotiations. Maybe they are swamped. There are a few other resale brokers that can be found by searching a bit.

Sent from my iPad using DISBoards App, please excuse any typos or autocorrects!

 

[Maddysdaddy]

My late grandfather had a saying, "figures lie and liars figure", so no matter how you run the numbers, someone is going to come up with another perspective that may throw everything out of whack.

Ultimately, I guess the question is how often are you coming to Disney now, how much are you spending on accommodations each trip, and how often do you see yourself coming back in the future.

I know for my family, we were flying down from Canada one to two times a year, staying on Disney property and spending $400+ a night on a room for approximately 7 days each trip (so call it $3k). When my wife and I sat down to run the numbers on DVC after going to the presentation on the Magic back in 2011, we found that buying in made sense for us, as we had the $20k to pay it off immediately (not sure we would have bought if we had to finance).

I can say that we just came back from 18 nights at WDW over spring break/Easter, that paying the published rate (and taxes) for the equivalent rooms, would have come to over $10k.

For us, it took about a year and a half's worth of points (so call it $1400 in dues), and then creative math says that the other $8500 magically came off of the $20k initial investment we gave to DVC. Between the two trips we have taken off of our points so far, even accounting for the cost of the annual dues, we are about half way thru our buy in (if we would have paid the published rate for the same period).

Where the math starts to break down is that "but for" our DVC points, we very likely never would have traveled to Disney for 18 nights, let alone over Easter - we normally travel off season when the rates are cheaper. Even using off season rates, we calculated our break even at around 9 years - after that, we figure that the dues on our 200 points work out to about 3 nights a year at published rates, but the 200 points themselves will give us about twice as many nights for that price (more if we stay in a studio)

When it comes down to it, if you are the type of people who stay at Disney in one of the deluxe resorts and are willing to pay the published rate (and you see yourselves coming back to Disney even in the period after your kids no longer want to vacation there and before you have grandchildren), and you are not putting your family in financial peril by buying in, DVC might well make sense to you.

 

[Dean]

So we have shopped DVC since it was first offered at Old Key West, did the tour, and looking back realize we would well have gotten our money's worth.

Now being serious again so many years later, no mater how I play with the numbers, the best I can see is that it locks in today's prices for the next few decades. Seems to make more sense to buy a house/condo nearby and rent it out- use that money to fund our trips.

Has any one done the math to show how DVC membership can offer savings.

We will pay cash, no financing. Need 200 points. Don't care which resort is home. To compare, we usually stay at Deluxe or Moderate, would never otherwise consider a DVC villa.

Is anyone else in a similar situation, who actually has found how this makes financial sense?

Comparing deluxe hotel rooms to a DVC studio resale, you should come out ahead $$$ wise depending on home resort and assumptions. Doing the same comparison to moderates you'll likely not be able to break even but you will get additional value IMO. If you're split between the 2 about half and half, DVC should still come out ahead when you consider you avoid the hefty local tax. Of course you're giving up housekeeping. A 1 BR is much harder to justify based on $$$ alone. For the 2 hotel rooms you're looking at, compare to a 2 BR rather than 2 studios because you cannot get connecting studios (I'm assuming kids are involved).

You'd be paying cash and I'm assuming you can afford it yearly based on your posts so that takes away one issue. The only other issue is the fact it's a long term commitment. I'd warn against counting on savings from the kitchen or overly optimistic assumptions such as that rooms will cont to go up far greater than inflation or that dues will average only a 3% increase. Also assume you can't get certain resorts and options like AKV club rooms or value rooms, BLT, GF or BWV standard unless you own there.

 

[elfbo]

You could even break even on a moderate room comparison. I paid about 1700 for my stay last year. With my contract divide it by 10 years (my proposed break even point) and add in annual dues... comes out to 1675. After 10 years its just mf for massive savings

 

[Dean]

You could even break even on a moderate room comparison. I paid about 1700 for my stay last year. With my contract divide it by 10 years (my proposed break even point) and add in annual dues... comes out to 1675. After 10 years its just mf for massive savings

It sounds like you did the other thing that I consider a mistake, ignoring the long term value of the upfront money. For most it won't change the specifics but it will change the timeline, for some it will push DVC to not being a reasonable financial choice at all. In your scenario it will push the "break even point" out a few years if I assumed correctly, how many depends totally on the specifics of your assumptions including tax assumptions and rate of return but likely 3-6 years. I would also caution against using a single stay as the comparison unless you also think it's representative of the overall situation with at least a 20% discount for a normal (not specialty) room. For those that finance, one needs to include the interest or a combination of the interest and lost return to be more accurate.

Another mistake I often see is comparing a different number of points than would be reasonable. If one is comparing to a week in a hotel room, the best comparison is for the number of points one can get for a week in a studio during the same timeframe. However, people then go out and buy more points and assume they're getting the same savings at that level of points and often that's not the case, at least in $$$.

 

[Minniesgal]

For me DVC wasn't about saving money against what we paid currently. It was more about changing the way we holiday. So far I have priced staying onsite and always felt too guilty spending that much cash on a hotel room when i can get a bigger condo offsite much cheaper, and while we had lovely holidays it did leave me wishing we were staying onsite.

We had some extra money and i decided to considered some of it sensible money and some of it fun money. So i consider the upfront capital we invested an investment in our future happiness and bought our points. Now we can always stay onsite and i have lost the guilt which would stop me choosing to pay year on year for what i really want. I guess it is similar to people who choose the DDP when it only breaks even for them.

I also considered our retirement when we will be on a fixed income. I expect at that point to be very grateful for the ability to go to WDW or DL only having to pay MF for our room. It makes sense to me to prepay that now when we are both working for cheaper holidays when we are older.

We will probably never break even with DVC as we would have to compare it to very cheap offsite condo stays but I can't put a price on how much more i enjoy my holidays at AKV or BLT or now VGC as well

 

[DVCcurious]

I've been a lurker for awhile.

It seems to me that everyone here is obsessed with math. Am I in the vast minority of people who just kinda go with the flow? It's a timeshare, it's not rocket science!

 

[CarolMN]

I've been a lurker for awhile.

It seems to me that everyone here is obsessed with math. Am I in the vast minority of people who just kinda go with the flow? It's a timeshare, it's not rocket science!

First of all - welcome out of lurkdom.

IMO, any luxury purchase such as a timeshare or prepaid vacation club, should come out of discretionary funds. If one has a surplus of discretionary funds, "going with the flow" may work out just fine. Even then, I suspect most of those people prefer to know they are getting a good value for the money they spend.

As you can see, there are many different ways of going that math. Some of them would not get a passing grade in either math or financial accounting, LOL.