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Old 04-17-2013, 09:59 AM   #91
Airb330
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Quote:
Originally Posted by tjkraz View Post
Your own numbers show that a DVC purchase becomes a "win" after 14 years. (Personally I think it's much sooner than that given the value of the contract itself.)

Nevertheless, I don't know why you are so shocked to hear from members who willingly embrace the savings they will see in years 15-50.



With all due respect, this is a ridiculous statement. It all comes down to how many points are purchased.

Family "A" owns 300 points and goes 2x per year.
Family "B" owns 150 points and goes 1x per year.
Family "C" owns 75 points and (with banking and borrowing) visits every-other-year.

The cost/benefit is pretty much identical in all of these scenarios. The key is simply not buying more points than are needed. An individual who has historically rented 100 points per year for an annual trip should not buy a 200-300 point contract (unless it's with the specific intention of increasing trip frequency.)

Sounds like you've already made your decision. Good luck.
Couldn't agree more with your entire post. It really all boils down to buying the appropriate amount of points, not how often one travels to Disney.

OP-Good luck with renting. You entered this process with a clear head and it just doesn't work out for you. Nothing wrong with that at all.
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Old 04-17-2013, 10:04 AM   #92
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Originally Posted by theguda View Post
I shudder to think of the money you're spending on DVC and only going to WDW once every 3 years. There is no doubt you'd be much better off financially renting points.

...

Anyone who goes to WDW less than twice a year and owns DVC is making a bad financial choice. Yes there are other factors to consider but for me, I'm not going to let those other factors lead me to a bad financial choice. Studio, 2 bedroom villa, etc...it doesn't matter what kind of room you select or which resort you choose. Renting points to stay in those rooms is a far better use of money then buying into DVC....unless you're going to WDW multiple times a year.
Option A: Continue to rent points and invest your $10K in a high quality bond of 5%. Assuming MFs and rent move together at approx 4% (historical for SSR) on 160 points. At the end of 6 years, your bond has returned $13,400 of cash flows and the cumulative difference between renting and buying is $7,429 netting out at $5,971.

Option B: Buy SSR for $10K. The cumulative difference between renting and buying is still $7,429 and I would think it's a safe assumption that your contract in 6 years time would be worth a net $37.50 PP (after commissions, etc) or $6,000.

At the end of 6 years, there is no difference between renting and buying (ignoring convenience of booking, discount on APs and other perks that DVC owners have listed).

If you decide not to sell, the break even would be 13 years (bond's cumulative cash of $18,856 vs cumulative savings vs renting of $18,622) after which point you would have years of deluxe accommodations at a reduced rate.

I've used your contract value, your home resort and your 5% discount factor. As you've stated that you plan on going to Disney annually for the next 10 years and plan on renting, I think that your analysis is incorrect but I don't judge your choice because it's your own choice.

What does bug me is your blanket statement that those who have purchased DVC and don't go multiple times a year are somehow financially irresponsible as well as the attitude towards Lovin'Fl. Also, I'm finding this entire exercise about fiscal responsibility and bad financial choices to be utterly moronic when DISCUSSING DISNEY VACATIONS. Disney trips are inherently bad financial decisions but we make them because we love spending time with family and warm fuzzies that you've been disregarding. This isn't a 401K, this is a luxury vacation so talk of bad financial decisions make me go cross-eyed.

Also - Tim... we're on the same side of the argument!
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Old 04-17-2013, 10:17 AM   #93
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Originally Posted by bisney View Post

Option A: Continue to rent points and invest your $10K in a high quality bond of 5%. Assuming MFs and rent move together at approx 4% (historical for SSR) on 160 points. At the end of 6 years, your bond has returned $13,400 of cash flows and the cumulative difference between renting and buying is $7,429 netting out at $5,971.

Option B: Buy SSR for $10K. The cumulative difference between renting and buying is still $7,429 and I would think it's a safe assumption that your contract in 6 years time would be worth a net $37.50 PP (after commissions, etc) or $6,000.

At the end of 6 years, there is no difference between renting and buying (ignoring convenience of booking, discount on APs and other perks that DVC owners have listed).

If you decide not to sell, the break even would be 13 years (bond's cumulative cash of $18,856 vs cumulative savings vs renting of $18,622) after which point you would have years of deluxe accommodations at a reduced rate.

I've used your contract value, your home resort and your 5% discount factor. As you've stated that you plan on going to Disney annually for the next 10 years and plan on renting, I think that your analysis is incorrect but I don't judge your choice because it's your own choice.

What does bug me is your blanket statement that those who have purchased DVC and don't go multiple times a year are somehow financially irresponsible as well as the attitude towards Lovin'Fl. Also, I'm finding this entire exercise about fiscal responsibility and bad financial choices to be utterly moronic when DISCUSSING DISNEY VACATIONS. Disney trips are inherently bad financial decisions but we make them because we love spending time with family and warm fuzzies that you've been disregarding. This isn't a 401K, this is a luxury vacation so talk of bad financial decisions make me go cross-eyed.

Also - Tim... we're on the same side of the argument!
"Also, I'm finding this entire exercise about fiscal responsibility and bad financial choices to be utterly moronic when DISCUSSING DISNEY VACATIONS. Disney trips are inherently bad financial decisions but we make them because we love spending time with family and warm fuzzies that you've been disregarding. This isn't a 401K, this is a luxury vacation so talk of bad financial decisions make me go cross-eyed."

Yes yes yes! That's what I was trying to get across in my earlier diatribe. The worst money I've ever spent (terrible grammar) are my best times at Disney.

When I speed-walk into the Rose and Crown, I don't ask the tender what his cheapest ale is. I ask him how he's doing as he pours the first of my $9.86 cent mystery-sized Harps

I never argue with people who dislike Disney for the crowds and the cost. How can I? Not because I know their right. But because I know that what they are missing I can't help them find.
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Old 04-17-2013, 10:24 AM   #94
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Originally Posted by theguda View Post
You understand that you could ALWAYS stay at a villa w a kitchen, W/D, jetted tub, separate bedrooms, etc WITHOUT being a DVC owner, right? All you have to do is rent the required points from someone.
Also, want to comment on this. We have only 75 HH points (as well as our 200 OkW and 100 AKV). We are wanting to do 6 nights in a 2BR at HH in Aug 2014. I have to book that this Sept. I will have 177 points (with banking and borrowing) to use...I need 271 total. My choices are:
A- book most nights with my HH points at 11 months out and try to add on to front or back end of trip at 7 months out with my OKW points (and hope that there's availability...it's tough at HH in the summer).
B- rent the additional 94 points (try to have them transferred into our account and book close to the 11 month out window...but I would need to find a member willing to transfer)....could also just book some nights with my points and rent the rest of the nights (have that member book those nights and link the 2 resies). This plan would cost, say, $12/point...$1128 for a one time use.
C- I could add on points...and that's what we're looking into now. If we add on a small resale (cost about $3000-ish), we could use those points for many years to come. Why rent for $1128 to get a resie I can get if we add on points (that we'd own and use every year) for $3000?
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Old 04-17-2013, 11:10 AM   #95
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Please show your numbers that explain your break even point in 7 trips.
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Old 04-17-2013, 11:13 AM   #96
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Originally Posted by NHTikiBeckie View Post
I like your logic, I am a numbers cruncher as well and can appreciate it for sure! Although I'd like to know where you are getting a 5% return on your investments, we haven't had a solid 5% in a while now! I'd love some tips!

I crunched numbers a little differently than you when it came to deciding if this was a financial sound decision for us. We only have one child and plan on staying in studios at the Animal Kingdom (AKL owners) as they are so few points. Value studios are only 69 points per week when we travel. However, we aren't able to rent points for a value studio at AKL because they are super high demand and gone at the 11 month mark almost immediately. So that was one reason we were leaning towards buying. (We got a 100pt AKL contract).

When I did my math to see if this was a good financial decision for us, I did it a couple ways. I crunched the numbers for what it would cost to stay full price (what Disney values the room at), what I would pay for renting, and what we would pay if we stayed at a moderate, because we do not love the theming of the values. Each way I crunched it, we came out ahead.

DVC is not for everyone, renting instead of buying is a great option!
Hello from South Berwick, ME....just up the street. UNH alumni. We do essentially everything life related in Portsmouth, NH. I'm not even sure how to get to downtown South Berwick

I agree with your angle. We approached it the same way. We have two little ones so while a studio is doable, we'd be leaning towards a one bedroom. Still waiting on our contract to pass Disney.
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Old 04-17-2013, 11:27 AM   #97
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IMO the only issues that matters here is that the people who are considering buying a DVC real estate interest are given the pro and the con and a level playing field. Based on this info the purchaser can decide if it financially makes sense to buy and if they are better off in their situation to buy resale or direct, and if they want to use cash or finance.

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Old 04-17-2013, 11:30 AM   #98
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Something else that I've been curious about is comparing buying at Saratoga Springs (low entry cost and low maintenance fees) versus buying at AKL or Boardwalk where lower point room options are offered.

I'm especially interested to find out if paying more per point for an AKL contract is better than paying less at SSR when you factor in the greater likelihood of getting a value studio at AKL for 8-10 points less than any other studio for a week.
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Old 04-17-2013, 11:41 AM   #99
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Quote:
Originally Posted by theguda
Please show your numbers that explain your break even point in 7 trips.
I come out with the same numbers a 7 year payback. It assumes no interest earned on the upfront costs and for me I compared to renting a hotel room direct from Disney at going rates. My numbers were for Disneyland though not Disneyworld so there its either pay for a Disney hotel as renting.Dvc there is difficult with vgc being so small. The other option is paying high rates for nearby motels.
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Old 04-17-2013, 11:44 AM   #100
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Originally Posted by ELMC View Post
OP, get a better deal on your buy in and the numbers will make more sense.
This is correct- Find the right contract and your numbers will make total sense!
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Old 04-17-2013, 11:45 AM   #101
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Quote:
Originally Posted by theguda View Post
Something else that I've been curious about is comparing buying at Saratoga Springs (low entry cost and low maintenance fees) versus buying at AKL or Boardwalk where lower point room options are offered.

I'm especially interested to find out if paying more per point for an AKL contract is better than paying less at SSR when you factor in the greater likelihood of getting a value studio at AKL for 8-10 points less than any other studio for a week.
Disney is a luxury vacation and worrying about getting a less expensive room doesn't make sense to me. Booking at your favorite resort is more important so I bought where we love to stay.

I have also found that many DVC owners go through changes. After a couple of years of Disney vacations, rushing to the parks and crowds becomes less appealing and you begin to start enjoying your room and resort more.

We had a 10 day stay last year where we went into Epcot for about 2 hours, that was our only park time.

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Old 04-17-2013, 11:46 AM   #102
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Originally Posted by theguda View Post
Anyone who goes to WDW less than twice a year and owns DVC is making a bad financial choice. Yes there are other factors to consider but for me, I'm not going to let those other factors lead me to a bad financial choice. Studio, 2 bedroom villa, etc...it doesn't matter what kind of room you select or which resort you choose. Renting points to stay in those rooms is a far better use of money then buying into DVC....unless you're going to WDW multiple times a year.
Have to disagree with you here. The number of trips you make doesn't matter, all that matters is that you use your points, you could go just once every three years by banking and borrowing and still can make it worth while owning DVC.

If you're happier renting that is great too.
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Old 04-17-2013, 12:02 PM   #103
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Quote:
Originally Posted by theguda View Post
Something else that I've been curious about is comparing buying at Saratoga Springs (low entry cost and low maintenance fees) versus buying at AKL or Boardwalk where lower point room options are offered.

I'm especially interested to find out if paying more per point for an AKL contract is better than paying less at SSR when you factor in the greater likelihood of getting a value studio at AKL for 8-10 points less than any other studio for a week.

Here's what it would take in points to stay in a studio for Sept 01-30
Points
285 AKV - value
314 BWV - standard
314 OKW
335 AKV - standard
372 SSR
422 AKV - savanna
422 BLT - standard
443 BCV
443 BWV - preferred
443 VWL
509 BLT - lake
517 AKV - concierge
583 BLT - MK


Here's what the average per night cost would be in MF if you owned and stayed at the resort you owned.


$MF/Night
55.77 AKV - value
57.87 OKW
61.74 SSR
63.24 BWV - standard
65.44 BLT - standard
65.55 AKV - standard
78.93 BLT - lake
82.58 AKV - savanna
86.24 BCV
88.49 VWL
89.22 BWV - preferred
90.41 BLT - MK
101.17 AKV - concierge

I've done this for a bunch of other months, months that I'm interested in going when I'm retired and the ranking workes out pretty much the same.

Here's the total increase in MF for the resorts in the last 5 years
14.32% SSR
15.89% BWV
17.21% OKW
17.62% BCV
18.95% VWL
20.49% AKV

15.61% BLT (in 2 years)


So if you want the cheapest option possible, buy SSR resale, book SSR at 11 months and then try and switch somewhere else at 7 months. AKV value rooms are the cheapest, but there isn't many of them and they are in high demand because of the low point costs, so odds are not good of getting that room unless you own AKV; AKV has higher resale costs and MF than SSR.

You can run numbers all you like, what is it that you are comfortable doing? Don't buy if you think you are wasting your money.

When I ran the numbers I just wanted to make sure that I knew what I was getting into and how it compared to what we had been doing (staying at moderates).

Good luck with your decision.
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Old 04-17-2013, 12:06 PM   #104
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Quote:
Originally Posted by PCMama

I come out with the same numbers a 7 year payback. It assumes no interest earned on the upfront costs and for me I compared to renting a hotel room direct from Disney at going rates. My numbers were for Disneyland though not Disneyworld so there its either pay for a Disney hotel as renting.Dvc there is difficult with vgc being so small. The other option is paying high rates for nearby motels.
Respectfully...you have to factor in how much interest you'd earn by investing that money if you didn't purchase. But what's skewing your #'s even more is using Disney's direct pricing as your basis. Renting points decreases the room cost significantly and you can do that whenever you want. A $300 room direct through Disney will cost you a fraction of that amount by renting. This is a prime example of what I've been talking about and others have warned against. A lot of people don't really understand the true cost of DVC. Paying rack rate for a room is like paying sticker price for a car. Your recoup time on your buyin is gonna be more like 14 years, not 7
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Old 04-17-2013, 12:07 PM   #105
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Quote:
Originally Posted by DougEMG

Here's what it would take in points to stay in a studio for Sept 01-30
Points
285 AKV - value
314 BWV - standard
314 OKW
335 AKV - standard
372 SSR
422 AKV - savanna
422 BLT - standard
443 BCV
443 BWV - preferred
443 VWL
509 BLT - lake
517 AKV - concierge
583 BLT - MK

Here's what the average per night cost would be in MF if you owned and stayed at the resort you owned.

$MF/Night
55.77 AKV - value
57.87 OKW
61.74 SSR
63.24 BWV - standard
65.44 BLT - standard
65.55 AKV - standard
78.93 BLT - lake
82.58 AKV - savanna
86.24 BCV
88.49 VWL
89.22 BWV - preferred
90.41 BLT - MK
101.17 AKV - concierge

I've done this for a bunch of other months, months that I'm interested in going when I'm retired and the ranking workes out pretty much the same.

Here's the total increase in MF for the resorts in the last 5 years
14.32% SSR
15.89% BWV
17.21% OKW
17.62% BCV
18.95% VWL
20.49% AKV

15.61% BLT (in 2 years)

So if you want the cheapest option possible, buy SSR resale, book SSR at 11 months and then try and switch somewhere else at 7 months. AKV value rooms are the cheapest, but there isn't many of them and they are in high demand because of the low point costs, so odds are not good of getting that room unless you own AKV; AKV has higher resale costs and MF than SSR.

You can run numbers all you like, what is it that you are comfortable doing? Don't buy if you think you are wasting your money.

When I ran the numbers I just wanted to make sure that I knew what I was getting into and how it compared to what we had been doing (staying at moderates).

Good luck with your decision.
You're the man. I love this information and love your input throughout this thread.
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