DVC RESALES
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Old 04-18-2013, 10:59 PM   #16
elfbo
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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
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Old 04-19-2013, 06:09 AM   #17
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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 $$$.
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Old 04-19-2013, 06:17 AM   #18
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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

Last edited by Minniesgal; 04-19-2013 at 09:47 AM.
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Old 04-19-2013, 06:48 AM   #19
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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!
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Old 04-19-2013, 07:28 AM   #20
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Originally Posted by DVCcurious View Post
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.
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Old 04-19-2013, 07:44 AM   #21
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My late grandfather had a saying, "figures lie and liars figure".
Haven't heard that before... I like it.

My spouse's uncle is dying. All family is near. His children and he were very close... spent valuable time together for decades. Though "make sense" can be a common thought when considering DVC, this dying man invested wisely in his family with his time and interests. Money does not matter at this point. Though it was not Disney that was their interest, value can only be placed as a personal preference.

We bought in on some "emotional" aspects, not all math. Watching the family situation unfold as it is, with this uncle's illness, we realize that enjoying life and living true is of utmost importance. We give to other's in need and share time together as our priority.

I hope you can sort out what needs suit you and consider input thoughtfully.
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Old 04-19-2013, 09:46 AM   #22
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Originally Posted by DVCcurious View Post
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!
It probably seems that way because those are the people most interested in this type of thread, but it is most definitely NOT the case overall. If I had to guess based on my experience, I would say most people on these boards are not that into the math or finance of it at all. At a minimum, there is a good mix of perspectives. I'm very analytical and into financials, so this stuff is interesting and matters to me. A lot of DVC owners and prospective owners are not, and that seems to work out fine for them, too. I think its great if someone is happy with their purchase without any regard for the finances. I just step in if I see someone who is trying to do an analysis appears to be making a significant mistake in it. In the end everyone makes their own decision and they are the only ones that get the benefits and consequences.
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Old 04-19-2013, 05:20 PM   #23
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Originally Posted by bighoo93

... I'm very analytical and into financials, so this stuff is interesting and matters to me. A lot of DVC owners and prospective owners are not, and that seems to work out fine for them, too. I think its great if someone is happy with their purchase without any regard for the finances. I just step in if I see someone who is trying to do an analysis appears to be making a significant mistake in it. In the end everyone makes their own decision and they are the only ones that get the benefits and consequences.
I feel similarly. I love the honesty that comes from people who say that they bought direct or financed or whatever and they're ok with it. I share my perspective about the math and then we both move on. What bothers me is the "math" that some people come up with stating how their direct purchases were break even in year two.
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Old 04-19-2013, 06:04 PM   #24
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Originally Posted by Minniesgal View Post
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
I totally agree. Our best Disney memories are when we stayed @ Deluxe hotels onsite. Just knowing we have the points & many upcoming great memories & vacations make it worth it. Waiting to hear news on our first resale contract soon- can't wait !
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Old 04-20-2013, 06:21 AM   #25
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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.
I'm not sure how far you are away but I'll point out this is a 2 edged sword. If you end up where DVC does not work for you at that point, having the liability may not be a blessing.

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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
That's one of the aspects I reference when I talk about timeshares and psychology. In reality, if DVC won't save you money, you could have done the same vacations without owning DVC.

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Originally Posted by DVCcurious View Post
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!
That's true for some and IMO, many use the math to try to justify something that really doesn't make sense. However, one needs to do the math because the only way one should buy a timeshare is if the math makes sense using reasonable assumptions combined with knowledge of one's habits and wishes.
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Old 04-20-2013, 08:19 AM   #26
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Originally Posted by nalajms View Post
The only time it ever makes financial sense to buy DVC is if you always stay at Deluxe or Deluxe Villas...
Or, want to! We never stayed Deluxe before we started staying DVC. Our first DVC trip was on my brother's points. After that we purchased.
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Old 04-20-2013, 11:13 PM   #27
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Seems to make more sense to buy a house/condo nearby and rent it out- use that money to fund our trips.
The vacation home rental market is already over-saturated in central Florida. Unless you have a prime property in a prime location AND partner with a big name property manager, you'll be lucky to make any money in this manner.

Quote:
Originally Posted by DVCcurious
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!
I have just enough education in finance / economics to make me dangerous--whatever the bare minimum was for business school 20 years ago.

But if the finances of a DVC purchase didn't pass my own sniff test, I never would have purchased in the first place. It was a matter of first deciding that we wanted to commit to many years of vacations on Disney property.

After crossing that bridge, we had to determine what gave us the best combination of quality and price. The answer could have been cash stays at Pop Century or POFQ for similar or less dollars. But we wanted the Deluxe level so DVC won out.

When dealing with this sort of commitment, it's virtually incomprehensible to think that there are folks who would blindly commit to DVC without performing some rudimentary cost analysis.
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Old 04-20-2013, 11:25 PM   #28
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When dealing with this sort of commitment, it's virtually incomprehensible to think that there are folks who would blindly commit to DVC without performing some rudimentary cost analysis.
And that some are willing to pay more than they would OOP simply to belong to the club.
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Old 04-21-2013, 06:46 AM   #29
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Our Math

We put all of the costs into a spreadsheet, with multiple point values, cash options and different resorts. With a family of 6 (4 kids), it eliminated budget hotels and such both on and off property, and the fact that we could only stay in the summer (due to our jobs) really simplified the spreadsheet. We didn't have to take various times of year into account - just summer.

We know that we travel about every other year, maybe a little more frequent as the kids get older. I think that was a key point for us in determining how many points we needed to really use. We found that there was a whole range of options from about 200-380 points that financially made more sense than paying cash. We found that the break even came after 7.5 visits.

One of the small items that most don't take into account (we didn't either at the time) is food. In a budget room, you don't usually have a kitchen to cook with. We save a lot money on our trips by doing most breakfasts in the room (still have to go out occasionally, it is vacation), and usually do a few lunches and dinners in the room. The savings for a family of 6 with that is staggering. It was not uncommon for us to spend over $50 for breakfast and closer to $100 for other meals in the parts. We figure that we "saving" over $500 dollars per visit by being in a DVC room with a kitchen.

The investment piece is one that can't really be figured in easily. Everybody invests differently. When we bought (5 years ago), if I had figured a 5-7% return on the money, I would have shockingly wrong. That money would have been worth 50% less today then it was then. Could it go back up, sure, but the last few years have shown me that investment is not as straight-forward a proposition. Over 50 years it is more clear, but there is still a lot of unknowns.

In the end, DVC is a luxury purchase, not an investment. You are borrowing from your future vacation/discretionary income, not money that you would have invested in savings. You can't really pool the two together and consider them the same thing since you spend them differently. I understand that you "could have" invested and then pulled it out with it being worth more, but that is not how most of us deal with luxury purchases.

Create a spreadsheet comparing the real costs of the room only (leave the other benefits out). Compare the room level that you have used for your last few vacations.

For us, purchasing direct through Disney broke even after 17 visits and gave us other benefits. In the end, we bought resale because we weren't sure we would vacation the same way once the kids grew up, so we may not need nearly as many points when they are gone, so we bought resale and gave up some flexibility for destinations to be sure that it financially made sense.

It already made sense in the heart, that's why we looked at DVC in the first place.

Last edited by George4; 04-21-2013 at 06:48 AM. Reason: typos
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Old 04-21-2013, 08:14 AM   #30
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Originally Posted by George4 View Post
We put all of the costs into a spreadsheet, with multiple point values, cash options and different resorts. With a family of 6 (4 kids), it eliminated budget hotels and such both on and off property, and the fact that we could only stay in the summer (due to our jobs) really simplified the spreadsheet. We didn't have to take various times of year into account - just summer.

We know that we travel about every other year, maybe a little more frequent as the kids get older. I think that was a key point for us in determining how many points we needed to really use. We found that there was a whole range of options from about 200-380 points that financially made more sense than paying cash. We found that the break even came after 7.5 visits.

One of the small items that most don't take into account (we didn't either at the time) is food. In a budget room, you don't usually have a kitchen to cook with. We save a lot money on our trips by doing most breakfasts in the room (still have to go out occasionally, it is vacation), and usually do a few lunches and dinners in the room. The savings for a family of 6 with that is staggering. It was not uncommon for us to spend over $50 for breakfast and closer to $100 for other meals in the parts. We figure that we "saving" over $500 dollars per visit by being in a DVC room with a kitchen.

The investment piece is one that can't really be figured in easily. Everybody invests differently. When we bought (5 years ago), if I had figured a 5-7% return on the money, I would have shockingly wrong. That money would have been worth 50% less today then it was then. Could it go back up, sure, but the last few years have shown me that investment is not as straight-forward a proposition. Over 50 years it is more clear, but there is still a lot of unknowns.

In the end, DVC is a luxury purchase, not an investment. You are borrowing from your future vacation/discretionary income, not money that you would have invested in savings. You can't really pool the two together and consider them the same thing since you spend them differently. I understand that you "could have" invested and then pulled it out with it being worth more, but that is not how most of us deal with luxury purchases.

Create a spreadsheet comparing the real costs of the room only (leave the other benefits out). Compare the room level that you have used for your last few vacations.

For us, purchasing direct through Disney broke even after 17 visits and gave us other benefits. In the end, we bought resale because we weren't sure we would vacation the same way once the kids grew up, so we may not need nearly as many points when they are gone, so we bought resale and gave up some flexibility for destinations to be sure that it financially made sense.

It already made sense in the heart, that's why we looked at DVC in the first place.
Thanks for sharing your thinking. I especially liked the comment in bold. In another thread I said that no purchase analysis is complete, that there is almost always something that gets left out. This is a great example.
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