Break even point VGF and RIV

[oceanwave]

We are currently thinking of purchasing points direct with DVC. We want to be able to stay at Riviera and also other resorts so resale is not an option for us.

Which resort would you choose? VGF or RIV? We like both. Thinking VGF may be the better choice long term if we ever have to sell.

Also I’m struggling on the break even point. What’s the easiest formula to use?

Edited to add that we usually stay in 1 bedrooms and tend to travel mid to late August.

 

[2Lunds]

We are currently thinking of purchasing points direct with DVC. We want to be able to stay at Riviera and also other resorts so resale is not an option for us.

Which resort would you choose? VGF or RIV? We like both. Thinking VGF may be the better choice long term if we ever have to sell.

Also I’m struggling on the break even point. What’s the easiest formula to use?

PixieDust PHD on YouTube has a pretty extensive video on break even point.

 

[GoingSince1990]

I would say VGF without hesitation, due to the lack of resale restrictions compared to RIV.

 

[naman1221]

I would say VGF without hesitation, due to the lack of resale restrictions compared to RIV.

Normally, I would agree with this unless the intention is to stay at Riv studios. They are so difficult to get ahold of the Deluxe studios at the 7 month at most points of the year.

If OP is good with 1 BR, preferred view or 2 BR, preferred, I think VGF is the way to go.

 

[Sandisw]

We used very simple math to determine break even. Took the room at the CR that we normally stayed in..used rack rate with a 35% discount which was typical at the time..

Then used our 5 night stay used current MFs…which we figured it’s rise would be a wash against cash rate rises...and went from there. Resale value wasn’t really a factor used.

Had to own 10 years and we could give it away and break even. If we did sell before that at 50% of what we paid, then it was less than 5 years.

We also figured we could stay in 1 bedrooms for about the same cost so didn’t even look at break even for those.

We prefer RIV to VGF but those are our top two so I think either are a good choice! We own both.

 

[Genie+]

The way I figured it is points/years plus dues, and also consider the opportunity cost of the initial buy-in investment.

Right now you can get 150 VGF for $31k. 41 years left comes out to about $5 per point per year. You’ll also pay almost $7 in dues (which should just go up with inflation values). So that’s $12pp for you to use them.

Not too bad… a 25point room will cost you $300 a night. But not so fast. What is the opportunity cost? Could you pay off $30k worth of debt and maybe save yourself $10k? Could you put it in your 401k and have an extra $100k when you want/need to retire?

Maybe none of that concerns you. You have little debt, you’re not borrowing, and you’re retirement is secure. Then the other thing to think about is cost. Park tickets for your family can double the cost of your room. $2k for a week in the room and $2k for tickets. Transportation and food is similar.

So depending on what formula you use for the room (maybe cost of capital?), basically triple that for a ballpark of what the commitment to WDW costs. Any way you slice or dice it really can be equivalent to 100s of $1,000s. Still interested? Welcome home

 

[KTownRaider]

Normally, I would agree with this unless the intention is to stay at Riv studios. They are so difficult to get ahold of the Deluxe studios at the 7 month at most points of the year.

If OP is good with 1 BR, preferred view or 2 BR, preferred, I think VGF is the way to go.

Beyond the resale restrictions, I think this post goes to the heart of what is the owner advantage at the respective resorts (RIV/VGF) as well as what time of year the OP plans to travel. I agree with the above post if the OP intends to stay at RIV consistently/frequently- especially at high demand times (think Nov/Dec). Pods and std studios are always the first to go and you need to own at RIV to have consistent access to these.

For the OP's situation, going with a RIV contract also comes with converse point regarding VGF in that you need to be ok with staying at resort studios during busier times (deluxe studios and 1-2 Bedroom accommodations are now dwarfed after the 2021 Big Pine Key resort studio expansion). Of course, if OP plans to go in mid/late August, any owner advantage becomes moot as there is good availability of all rooms for these resorts at 7 months.

 

[oceanwave]

PixieDust PHD on YouTube has a pretty extensive video on break even point.

Thank you! I will take a look.

I would say VGF without hesitation, due to the lack of resale restrictions compared to RIV.

Thanks! I am concerned that if at some point we had to sell that restrictions would be an issue.

Normally, I would agree with this unless the intention is to stay at Riv studios. They are so difficult to get ahold of the Deluxe studios at the 7 month at most points of the year.

If OP is good with 1 BR, preferred view or 2 BR, preferred, I think VGF is the way to go.

We tend to do 1 bedrooms. We prefer having the washer/dryer and full kitchen.

We used very simple math to determine break even. Took the room at the CR that we normally stayed in..used rack rate with a 35% discount which was typical at the time..

Then used our 5 night stay used current MFs…which we figured it’s rise would be a wash against cash rate rises...and went from there. Resale value wasn’t really a factor used.

Had to own 10 years and we could give it away and break even. If we did sell before that at 50% of what we paid, then it was less than 5 years.

We also figured we could stay in 1 bedrooms for about the same cost so didn’t even look at break even for those.

We prefer RIV to VGF but those are our top two so I think either are a good choice! We own both.

Thank you!

The way I figured it is points/years plus dues, and also consider the opportunity cost of the initial buy-in investment.

Right now you can get 150 VGF for $31k. 41 years left comes out to about $5 per point per year. You’ll also pay almost $7 in dues (which should just go up with inflation values). So that’s $12pp for you to use them.

Not too bad… a 25point room will cost you $300 a night. But not so fast. What is the opportunity cost? Could you pay off $30k worth of debt and maybe save yourself $10k? Could you put it in your 401k and have an extra $100k when you want/need to retire?

Maybe none of that concerns you. You have little debt, you’re not borrowing, and you’re retirement is secure. Then the other thing to think about is cost. Park tickets for your family can double the cost of your room. $2k for a week in the room and $2k for tickets. Transportation and food is similar.

So depending on what formula you use for the room (maybe cost of capital?), basically triple that for a ballpark of what the commitment to WDW costs. Any way you slice or dice it really can be equivalent to 100s of $1,000s. Still interested? Welcome home

Thank you!

Beyond the resale restrictions, I think this post goes to the heart of what is the owner advantage at the respective resorts (RIV/VGF) as well as what time of year the OP plans to travel. I agree with the above post if the OP intends to stay at RIV consistently/frequently- especially at high demand times (think Nov/Dec). Pods and std studios are always the first to go and you need to own at RIV to have consistent access to these.

For the OP's situation, going with a RIV contract also comes converse point regarding VGF in that you need to be ok with staying at resort studios during busier times (deluxe studios and 1-2 Bedroom accommodations are now dwarfed after the 2021 Big Pine Key resort studio expansion). Of course, if OP plans to go in mid/late August, any owner advantage becomes moot as there is good availability of all rooms for these resorts at 7 months.

We tend to stay in 1 bedrooms. Prefer the washer/dryer and full kitchen. Also with school schedules we travel mid to late August. I’ll edit my post to put that in. Actually Riviera in August can be a pain with the skyliner usually shutting down in the afternoons due to weather. We had that issue last year and I would say that was the one big negative for us. In other seasons it would be great.

 

[havoc315]

We are currently thinking of purchasing points direct with DVC. We want to be able to stay at Riviera and also other resorts so resale is not an option for us.

Which resort would you choose? VGF or RIV? We like both. Thinking VGF may be the better choice long term if we ever have to sell.

Also I’m struggling on the break even point. What’s the easiest formula to use?

First, do not try to speculate that, "this resort might have slightly better resale value in 20 years." You really don't know, and it's not worth making a decision based on which resort might re-sell for a 3% more than another. If for example, you're re-selling in 2040.... It's possible that Riviera has higher resale considering it might be the only truly available DVC in the Epcot area, while VGF has a lot of competition, and 30 remaining years versus "only" 24 years. You really just can't speculate.

So here is what I'd base my decision on:

1 -- Location. Do you prefer being on the monorail, or easy skyliner access to Epcot and DHS? Personally, I love being in the Magic Kingdom area with small kids, but as my kids have gotten older, looking at older teens, adult-only trips, I like being in the Epcot area.
2 -- Sprawling resort versus compact tower -- Both have their fans. Some like a spread out layout, personally, I like that at Riviera, it's never more than a 3 minute walk to the pool or dining.
3-- Preference for general vibe of the resort -- "opulence" versus "casual elegance." That's the best way I can put it.

That's basically it. There are some other minor considerations, dues are slightly higher at Riviera. Riviera rooms can be booked for fewer points than VGF... With the addition at VGF, VGF may be very "studio heavy"... where Riviera may have a better mix of rooms, including the option of the Tower Studios. Meanwhile, if you love the "resort studio," that's only found at VGF. But overall, room size and quality is similar. Both resorts have great dining, but it's not like you'd eat a Victorias and Alberts five nights in a row, so I wouldn't be too swayed by dining in either direction. Pool quality is very similar.

As for financial break even point -- At direct pricing, compared to renting points, it's in the ballpark of 16-22 years. Disney claims it's like 7 years -- But they are comparing it to rack rate, not to renting points. They are ignoring dues, only looking at the purchase cost, and they are assuming rack rates would never get discounted. So if you didn't have to pay dues, and your only option was to pay undiscounted rack rate, then you'd break even in 7-8 years. In reality, it's closer to 20 years.

 

[Littlelulu01]

Break even depends on what you will do if you didn’t have dvc. Would you be renting, booking only with a discount, paying a non discounted rate? Would you be in a one bedroom regardless or only if you owned? If you have a clear plan on what you would spend on lodging without dvc then it’s pretty straightforward math. I’m not a fan of amortization over contract life and I’m not comfortable predicting that I’ll actually be vacationing in a dvc unit for 50 years. I figure the buy in cost plus mf in comparison to what I’d be spending if I didn’t own and after that is covered vacations are the cost of maintenance fees for as long as I chose to own. since I don’t anticipate selling anytime soon and values vary, I don’t factor a resale value.

We broke even on our riviera contract right away. Aulani had just reopened and we desperately wanted a vacation. Most hotels in Hawaii were still shut down and the few open were charging a fortune. Aulani had a special rate if booked on points, every 5th night free but points only. We purchased a fixed week at Riviera. We used the points to stay at Aulani for a couple weeks and had an incredible experience. I don’t even think the hotel side of Aulani was open at the time and the 4 seasons was also shut down so the beach was empty.

We didn’t pay maintenance fees on our “free” use year of points and the subsequent year was pro rated maintenance fees. i think it was due to the shut down or something. We got a few other bonuses and had enough leftovers for 8 nights at Riviera later that year which we got upgraded on. Upgrades on dvc reservations typically NEVER happen but because of the pandemic we got lucky.

I was thrilled to break even in the first year. I’ve still not had a chance to use the fixed week but when we do it’ll be a savings there too because of point chart reallocations.

As to gfv or riviera? I’d guess once the resorts sell out the one bedrooms will be harder to get at grand Floridian than at Riviera so if grand Floridian one bedroom is what you’re most interested in then I’d be inclined to purchase there. They’re our top two favorites at wdw but we’re partial to Riviera.

 

[Where'sPiglet?]

Have you considered expanding your resort options?

VGF is difficult for the small percentage of 1-bedrooms available given the new studio-only building expansion. This disproportionate room allocation may also impact resale value in the future.

RIV is difficult given the unreliability of the Skyliner in August due to weather. There's also the resale restrictions that give many people pause.

I would be struggling to make a decision because neither option is particularly great given your parameters and travel preferences. I'm not sure what resort would be a better option for you, however. One-bedrooms are usually available at the 7-month mark, especially in mid-August, so that is a consideration.

The Polynesian expansion might be a great choice, but that requires waiting, and there are many details that aren't available yet.

 

[Disney_escape]

The other thing to consider is that inflation is on your side with ownership, which will help offset some of the opportunity cost of purchasing (ie using the $30k to invest or something else). Using a 35% discount on the week before Christmas at GF is about $5200 to rent a 2 queen bed hotel room similar to resort studio, yearly dues on the 133 points that room would cost is about $1,000, so current difference of $4,200 savings. In 10 years assuming 3% inflation (and yes they should go up about the same % since the cost of dues is not for Disney profit but running the DVC same as hotel) the $5200 room would cost $6,988 and dues would cost $1,344 - difference of $5,644 (20 year projection room $9,391 & point dues $1806 = difference of $7,585). If you look back at dues inflation as a %, they track hotel price inflation fairly well.
Your numbers could be different based on when you like to go, some weeks the point to cash ratios are better and some are worse, but the illustration of inflation is the same.

RIV vs GF- We own both, I enjoy both but prefer the Riviera. It is all personal preference and feel, I wouldn't use resale rules as a guideline since who knows what will be in 10+ years. Unless you are looking to flip in just a few years.
IMO pros to RIV - Skyliner/location to Epcot & Hollywood, restaurants and pool bar, not a sprawling footprint, pool and general atmosphere. GF - Lobby, monorail for quick run over to MK for fireworks, restaurants.

Buy where you prefer to stay, 7 months is difficult for popular rooms/locations.

 

[intamin]

Personally if resale value matters to you which it seems like it does and you don't have a preference for which resort you like more then I'd recommend VGF. Sure RIV has the longer contract length but from a resale point of view the restriction greatly decreases it's value.

That being said, I am not a fan of the VGF rooms and strongly prefer RIV and don't care as much about the resale value because my direct RIV contract will likely be pried from my dead hands so RIV was a no brainer for me and being able to snag the standard 2BR at RIV in that 11 month window matters more to me.

Regarding break even point, find out how much the cash rate is for the room you like staying at the most. Say for example 1 week at a GF studio costs 800 per night for a week AKA 5600.

All these numbers are fabricated for simplicity's sake

Now lets say you spent 30,000 on a 150 pt VGF contract (200 dollars per point).

200 (price per point)/ 40 (number of years left on the contract) = 5 dollars per point buy in + the maintenance fees of the current year (currently 7.33 but we'll round down to 7) = 12 (the cost of each individual point for that year).

It costs 120 points for a week in September at VGF at a standard studio. 120*(5+7) = 1440.

To calculate the break even 5600-1440=4160 in savings. 30,000/4160= 7.2 trips to get the buy in price back.

After you hit the 7.2, you then have to start making up the cost of the maintenance fees. This one is a little bit harder to calculate because the maintenance fees change every year, but assume for the next 7 years your average maintenance fees were 8 dollars. 150*8=1200*7=8400.

8400/4160=2. So another 2 trips to get cost of maintenance fees back.

7.2+2=9.2 trips. This is why for most people it takes around 8-10 years to break even and everything else after that is just paying for maintenance fees. Of course this explanation also doesn't even take into account the fact that the room prices can increase but certain times of the year may also have discounts going on. This is why I keep all of my trips in a google spreadsheet and find the discounted rack rate and compare it to how much my DVC room is costing and keep a running tally of the savings.