First year as a DVC owner and how the $$$ math worked out

[chicagodisneyguy]

I turned 30 last year and came to the conclusion that I still love Disney as much as I did the first time my parents took me 25 years earlier. I still go almost every year with either friends, family, or both. So I decided to investigate DVC and used these boards as a HUGE reference. The main question I had and that many others still do is what is the actual monetary benefit that DVC provides? I looked at the many spreadsheets people had made as well as about 15 I did myself and spent 3 months going back and forth. In January I took the plunge and bought 200 BLT points @ $107pp + the 200 developer points (which I ended up renting to my boss and will use that money for passes in the future).

I used my 2009 points for 2 days in a studio @ VWL with my brother then 4 nights in a 2BR std-view at BLT with some of my other family. Below is a breakdown of the actual cost I incurred as well as what costs I would have incurred if staying in the exact rooms on cash.

......................................POINTS...................CASH RESSI

VWL Studio 2 nts..................$0..........................$360

BLT 2-BR Std 4nts.................$0..........................$2,800

Rented Points - 8pts*$10.......$80.........................$0

Initial Purchase $21,400/50....$428........................$0

Cost of Capital after Tax........$275.......................$0

Groceries.............................$150.......................$150

Annual Dues $3.67*200..........$734.......................$0

Total Cost..........................$1,667.....................$3,310

TOTAL SAVINGS..........$1,643

The cash rates were taken from Disney's Annual Passholder website and are discounted. As the economy gets better these discounts will more than likely be harder to get.

A friend transferred me 8 points instread of borrowing but I put the going rental rate in anyways. For the cost of the initial purchase, I figure the easiest way to compare is just to divide it evenly over 50 years. I used 2% for the cost of capital. The $150 in groceries was for snacks, beer/wine, and breakfast which we had historically eaten at the park. We saved $100 on breakfast and probably another $100 on midday snacks and not buying the $6 beer from the food courts.

Also, I used a FULL year of annual dues in this calculation instead of the pro-rated 2009 dues I paid to show a more accurate account of what my yearly trip will look like. The actual dues for 2009 were $245.

As someone who loves going to Disney atleast once a year and enjoys vacationing in deluxe accommodations, I knew that DVC made sense. But now after one year, I KNOW it makes financial sense as well. Hopefully this breakdown helps those who were in my position a year ago make their decision.

The only thing I have left to figure out is which resort and how many points to add!!!

[edk35]

Very interesting....thanks for sharing. I hope others see this too.

[mdinme]

Can you really attribute $3400 for your six night stay on cash? I"ll assume value season and only one weekend night on your six night stay. I see the total at 170 point or so. I think it'd be pretty easy to beat $3400 if I simply rented points from an owner instead of cash via disney rezzies.

I got 169 points for $1550 for S-Th at Kidani for this coming Jan. Yes $925 is a good buy but even at $10.50 a point I'm WAY under your $3400.

I believe DVC can be a good money saving buy, but your post is a touch skewed when you charge it that way.

Recently I've looked at 100 point resells for say $7500 (SSR). And I assume that dues will average $500 a year for the next ten years so $5k in dues.

I'm at $12,500 for ROOM ONLY spent over the next ten years now (Purchase price + Dues for 10 years).

If I go every year that turns into $1250 a year. It goes down to to $1000 a year after 15 years of vacations and so on.

So what do we get for $1000/year over the next 15 years (and I like to stop there and examine it because really SO MUCH can change in 15 years)? Well, we'd get six nights value season in a studio or four nights in one bed.

Is it worth it? Maybe. But I like my $7500 invested and I know I can rent points (at least for the next five years?) for the same $1000.

What DVC does pretty much give is a guaranteed vacation and that might get harder to come buy if the population grows (swine flu anyone) and the economy is too.

[kristenrice]

Here's my "real life" example:

Resale AKV purchase: $9525 total; 4900 points remaining over the life of the contract which amounts to $1.94/point
2008 MF's: $471
2009 MF's: $485
2010 MF's: $504*
2011 MF's: $525*
*2010 and 2011 are estimated based on a 4% annual increase

First trip...2009...June 6 (value studio) and 7-11 (value 1BR) at AKV, using 1 banked 2008 point and 94 2009 points. (The other 99 2008 points were used for a friend to go on his honeymoon)

Initial cost of points: $184.30
MF's on 2008 point: $4.71
MF's on 94 2009 points: $455.90
TOTAL cost for 5 night stay: $644.91
$2361.38 at full rack rate!

If we had taken this trip as non-members and stayed at Pop Century and got a 20% discount, we'd have paid $526.50. Yup, it's $120 less, but consider the difference between a 1BR at AKV and a standard room at Pop Century....TOTALLY worth the $120 to upgrade.

Next Trip...2010...April 4-5 (2 std studios) and April 6-8 (std 2BR) at AKV. We're bringing my parents on this one so we are a party of 6 and borrowing all of 2011's points. Premiere Season!

Initial cost of points: $399.64
MF's on 6 2009 points: $29.10
MF's on 100 2010 points: $504
MF's on 100 2011 points: $525
TOTAL cost for 5 night stay: $1058.10
Rack Rate for same trip.....$5760
If we were not DVC members, we would not be staying at AKV over spring break! We'd probably stay on property, though, so I'll put out a few numbers....

Option #1: 2 standard rooms at Pop Century $1631.25
Option #2: All-Star Music Family Suite $1864.50
Option #3: Ft. Wilderness Cabin $2137.50

So, realistically, we would have spent $2157.75 on 2 vacations. That is about 22% of our initial buy in...in TWO trips! We still have until 2057 to vacation so I think we will more than break even. If you use DVC's math (using full rack rate for the same rooms), we'd be at almost 85% of our initial buy-in!

The more important thing that our DVC has done for us is that it has "forced" us to take a vacation, at least every other year. We both work in fairly stressful fields (law enforcement and EMS) and we work 12-14 hour shifts, 3-4 days a week, so we NEED to take vacations. If we don't plan something, neither one of us will cave in and take time off "just because". We each have this insane sense of obligation to be doing our jobs if we are not doing anything else in particular. Now that we have our DVC, we will have that "something to do".

[chicagodisneyguy]

Can you really attribute $3400 for your six night stay on cash? I"ll assume value season and only one weekend night on your six night stay. I see the total at 170 point or so. I think it'd be pretty easy to beat $3400 if I simply rented points from an owner instead of cash via disney rezzies.

My October vacations was six nights with 2 weekend nights while at BLT which is where the 208 pt total came from. From browsing the rent board, $10 seems to be the average rental price. So even at $10/pt, it still comes out to $2080. If I take out the groceries from my example (which was just to show the money saved from eating in) I'm still ahead by $640. But even if I could rent them for less, I don't want the hassle of the rental process. I want to have complete control over my reservations and any changes I need to make. I'm sure a great majority of them work out fine, but I don't want to risk it.

I also think that the large amount of point availible for rent will decrease as the economy gets better which will push up prices. I don't think a majority of people are necessarily renting out the points because they want to. I could be wrong on those assumptions, but I like to have my price locked in. For me, and I would guess many other people, renting is not something I want to do.

[mdinme]

I like what KRICE says about "forced vacations." That is worth a lot since, yes, when you know they are there you take them otherwise you may not.

I still disagree with comparing against rack rates. Why would anyone pay them especially with 4/3, 5/2 free dining and other deals. I've compared renting dvc points to the 4/3 deal and rental still comes out cheaper at $10/pt.

I really can't fathom why food costs should be brought into it. When you're alive you're forced to eat. Sure dvc gets you a kitchen but I lay food costs aside and just try to look at WHAT IS THE ROOM COSTING?

We went to vrbo.com and got a 4bd with its own pool and hot tub for $1025 for 9 nights (value season). Nothing can beat it esp. when I add $112 for 8 days of parking (we get a car regardless).

What is the value of the magic that one gets inside? I'd say high, but I'm still gathering data really and these threads really help. We're staying at Kidani Jan 3-9 Savannah. If we never consider offsite again....

[mdinme]

The AKV resale KRICE mentioned makes me think too. Let's round off to 9500 and add 25000 for dues over the life of the contract (assumes 49 years of dues at an average of under 550/year likely low).

So over the next 49 years KRICE spends 35000 on disney vacations. She uses 100 points year or 200 every other year either way it shakes out to about $715 per year for whatever 100 points will get you (10 nights in a studio value?).

Is that a good deal. YES. It assumes a lot though. We're 40 now. Not likely we'll both be able to walk wdw even 30 years from now nonetheless 40. Suppose the magic wears off? What are these resorts going to look like after 25 years? And the best question I've read recently: Why the hell would I give my money (dues) to something that I really don't own? The thought being that disney rents to non dvc members who trash the place or at least don't treat it like home. THEY SAYS DUES ARE FOR UPGRADES! REALLY?

[DRT-eagle]

The comparisons to the cost of accommodations is relative to a vacation price that is avoided cost. That is an excellent way to judge the value. My evaluation of value is the before purchase and after purchase value.

I purchased a 150 point resale in 2000 for $12000. That works out to 6300 points over the life and for simplicity sake, we will say $2 per point in cost.

The MF fees continue to rise at the rate of inflation. I wish the resale value would rise with them. Even if we say over the life to the property, the MF value versus the resale value is $3, then the total return on the investment plus rental fees minus the MF feess and capital costs is the real deal.

Resale = $10
MF = $ 5
Cost = $ 2
VALUE = $ 3

$12000 investment created 6300 points x $5 per point or $18,900 in value. I did a much more thorough job of the analysis on a spreadsheet and found that the points work out to effective yield of 7% a year investment after all things are considered. Mouseplanet did a similar analysis years ago and came up with 6.5% return. The return is much higher if you use the points and consider it in comparison to a deluxe accommodation. I like the ability to cash out the points in the odd year and cover two years of MF's. I have no cash out of pocket for a week long vacation every other year in a 2BR. If I just sold the points for the first 10 years I would have $15000 in cash and $6000 in MFs. I peg the breakeven on a resale purchase at about 12 to 15 years and then you get a lot of use over the next 30 years.

[dvc_john]

Originally Posted by chicagodisneyguy

In January I took the plunge and bought 200 BLT points @ $107pp + the 200 developer points (which I ended up renting to my boss and will use that money for passes in the future).

Even though you'll use the rental income from the developer points for passes in the future, you could have easily applied that income to the purchase price. I think for a more accurate comparison you should subtract that income from the purchase price.

For example, if you rented 200 developer points for $10/per point, you should consider the purchase price at $19400 (($107 * 200) - ($10 * 200)), not $21400.

[chicagodisneyguy]

Even though you'll use the rental income from the developer points for passes in the future, you could have easily applied that income to the purchase price. I think for a more accurate comparison you should subtract that income from the purchase price.

For example, if you rented 200 developer points for $10/per point, you should consider the purchase price at $19400 (($107 * 200) - ($10 * 200)), not $21400.

You're right that my net outlay was $19,400 which equates to $40/year off. In my personal spreadsheet that is actually the way I look at at. The only reason I didn't show it that way in this example is that some past and current incentives are not as easily converted into cash. If someone got the free cruise incentive or the current annual pass one, I think they will have a harder time selling them to apply the money to their principle outlay.

And for what it's worth, Disney got this years $40 back anyways on a round of Lapu Lapu pineapple drinks at Kona Cafe. VERY yummy!!!

[wdwnut]

I think another point to bring out is not necessarily the straight financial side, but the amount of enjoyment you get when bringing additional family and friends to WDW. Our last trip had 19 of us at BWV all on my points. What a great trip; to be able to do something like that is really priceless. That's always been a big factor with our point usage. If you are happy with your purchase and can afford it, that's all that matters.

[amberkow]

Thanks for sharing!

[Disney Todd]

Do not forget that you OWN an asset that you can relatively easily resell. After 10 years, you will certainly break-even on your investment and then own something that has historically outpaced inflation. Yes, you'll pay a 10% commission on the back-end, but essentially then you're only paying annual dues during your tenure of ownership. When we bought, we concluded that even if we only wanted DVC for 10-12 years, we could still recoup our investment at the end of the time and effectively only have paid annual dues for high-end quality Disney vacations. We would make the same decision today, although we would have bought on resale for 80 cents on the dollar instead of directly through Disney since the "newest and hottest" property changes every couple of years.

This said, I would absolutely stay away from financing. If you cannot comfortably pay cash for this toy, you cannot afford it.

All the best

[Dean]

Originally Posted by chicagodisneyguy

I turned 30 last year and came to the conclusion that I still love Disney as much as I did the first time my parents took me 25 years earlier. I still go almost every year with either friends, family, or both. So I decided to investigate DVC and used these boards as a HUGE reference. The main question I had and that many others still do is what is the actual monetary benefit that DVC provides? I looked at the many spreadsheets people had made as well as about 15 I did myself and spent 3 months going back and forth. In January I took the plunge and bought 200 BLT points @ $107pp + the 200 developer points (which I ended up renting to my boss and will use that money for passes in the future).

I used my 2009 points for 2 days in a studio @ VWL with my brother then 4 nights in a 2BR std-view at BLT with some of my other family. Below is a breakdown of the actual cost I incurred as well as what costs I would have incurred if staying in the exact rooms on cash.

......................................POINTS...................CASH RESSI

VWL Studio 2 nts..................$0..........................$360

BLT 2-BR Std 4nts.................$0..........................$2,800

Rented Points - 8pts*$10.......$80.........................$0

Initial Purchase $21,400/50....$428........................$0

Cost of Capital after Tax........$275.......................$0

Groceries.............................$150.......................$150

Annual Dues $3.67*200..........$734.......................$0

Total Cost..........................$1,667.....................$3,310

TOTAL SAVINGS..........$1,643

The cash rates were taken from Disney's Annual Passholder website and are discounted. As the economy gets better these discounts will more than likely be harder to get.

A friend transferred me 8 points instread of borrowing but I put the going rental rate in anyways. For the cost of the initial purchase, I figure the easiest way to compare is just to divide it evenly over 50 years. I used 2% for the cost of capital. The $150 in groceries was for snacks, beer/wine, and breakfast which we had historically eaten at the park. We saved $100 on breakfast and probably another $100 on midday snacks and not buying the $6 beer from the food courts.

Also, I used a FULL year of annual dues in this calculation instead of the pro-rated 2009 dues I paid to show a more accurate account of what my yearly trip will look like. The actual dues for 2009 were $245.

As someone who loves going to Disney atleast once a year and enjoys vacationing in deluxe accommodations, I knew that DVC made sense. But now after one year, I KNOW it makes financial sense as well. Hopefully this breakdown helps those who were in my position a year ago make their decision.

The only thing I have left to figure out is which resort and how many points to add!!!

Unless one would have payed cash (full price) for DVC or a suite, using rack rates for a DVC unit is not a reasonable comparison. Plus allotting only say 1/50 of the purchase amount to year one is not a reasonable comparison. DVC can still be a great deal but I think often people tend to rationalize the savings and overestimate them. IMO, one needs to compare what you would have paid for cash, not what you got would cost you, to figure savings. I realize there are additional benefits that may include a nicer or larger room but that is not really a savings.

[chicagodisneyguy]

Unless one would have payed cash (full price) for DVC or a suite, using rack rates for a DVC unit is not a reasonable comparison. Plus allotting only say 1/50 of the purchase amount to year one is not a reasonable comparison. DVC can still be a great deal but I think often people tend to rationalize the savings and overestimate them. IMO, one needs to compare what you would have paid for cash, not what you got would cost you, to figure savings. I realize there are additional benefits that may include a nicer or larger room but that is not really a savings.

$700/night was the cheapest i saw BLT by going through CRO. I called a couple times to see if my dates qualified for the free dining, but there was never any availibility. Not sure if that is rack rate, but that's the cheapest I could have paid for a cash ressie. Fot the 2 nights in studio, that was an annual passholder rate ($169/nt), not rack rate. If I was going to pay cash, I would have stayed in the same type of accomidations at the same places. Without DVC I would have paid $3160 for my rooms. I think the point you are tying to make is that without DVC, some people might stay at a less costly resort which in turn means they actually would spend less money on rooms meaning a smaller actual savings. For me though, that isn't the case. DVC saved me $1,600.