If points are $106 then a 10 point room is....

[Carl Aird]

If points are $106 per point then a 10 point room is over one thousand dollars correct??
Is that really a steal??
I heard studios for non DVC memebrs are 400$ a night
Or should I not look at it this way???

 

[bobbiwoz]

You will not be paying the $106 every year. You pay for the points once, each year you will pay maintenance. Every year you get new points.

So the cost of that point is really $106/x where x is how many years you will be getting points, that is how many years are left on your contract.

You take that number times 10 if the room costs 10 points and then add the maintenance fees for the 10 points and that's the cost of the room that night.

Bobbi

 

[wildernessDad]

If points are $106 per point then a 10 point room is over one thousand dollars correct??
Is that really a steal??
I heard studios for non DVC memebrs are 400$ a night
Or should I not look at it this way???

I think you are confusing the purchase price of a DVC ownership with the price of a 10 point per night room.

If the purchase price of a DVC ownership is $106/point, then if you purchased, for example, 160 points, you would get 160 points EVERY year until the end date for that particular DVC resort. You would also have to pay dues, i.e. maintenance fees and taxes.

Overtime, however, buying a DVC ownership saves money over spending your dollars every year to vacation in a moderate or deluxe hotel room.

 

[Chuck S]

You divide the $106 by the length of the contract. So if you buy at a resort with 50 years left, $106/50 = $2.12 add the current maintenance fee (about $5 average) and multiply by 10, so the room is about $71.20, compared to $400.

 

[booger73]

$106/point over 50 years = $2.12/point/year (divide by some other # than 50 if you don't use the whole 50 years, or if you get more - change $106 to something else if you're getting a different cost/point)

Base cost = $2.12/point/year + approximate dues/point/yr*(inflation) ($4.34 at SSR this year, for example) = $6.64/point+(inflation)

10 point room/night * 6.64 = $66/night

1BR SSR in magic season = 27 pts = $179/night.. approximately right now
(don't have to include tax, etc, etc)

Don't think there's many places that are $179/night with a 1-br/kitchen/w/d/tub, etc

 

[booger73]

Yeah.. what he said. =)

Which of course, means right now that if you bought from Disney BLT points.. and used them at a resort (other than BLT) - for example OKW.. you might actually get the best deal

1) lowest buyin+resort dues/point currently
2) Use points at resort with lowest point costs (OKW)

Doesn't take into account resale.. but can be done the same way:

$80/point resale/34 years left = $2.35/point + dues*inflation

 

[Carl Aird]

You divide the $106 by the length of the contract. So if you buy at a resort with 50 years left, $106/50 = $2.12 add the current maintenance fee (about $5 average) and multiply by 10, so the room is about $71.20, compared to $400.

VERY NICE
Youre my FAV Moderator CHUCK S!!!!

 

[kristenrice]

We bought 100 points at AKV for $92/point. We have 49 years left on the contract. That means we received 4900 points for $9200...or roughly $1.87 per point.

This year, we are paying $4.85 per point in MF's. So, our stay at AKV in June (Saturday in value studio, Su-Wed in value 1BR) is 95 points for the 5 nights. This is "costing" us $638.40 for the 5 nights...or $127.68 per night. THAT is a bargain!

 

[O&PsDad]

For my spread sheet (just last week) I used SSR and $75/pt. M&F are 4.33 now.

Over the 45 yrs of the contract each point, adjusted 3%/yr cost $401.xx plus the cost of the point initially. In my case it was ~$75.

$476/pt over the life of the 45yrs. That is ~$10.58/pt/yr. your ten point room would cost ~$106/nt. The value is 5, 10, 15 years from now when the same $3-400 room then costs $1000/nt. Your $106 will be a dream then, IMHO anyway.

You can see that the cost of the point initially is a small portion of the cost of the point over 45 years.

FYI if you were renting points assuming $10/pt now ( $11 would be a fair value) each point would cost you almost $37/pt to rent in 2054 when the contract is over. That assumes the same 3%/yr.

 

[palhockeymomof2]

You divide the $106 by the length of the contract. So if you buy at a resort with 50 years left, $106/50 = $2.12 add the current maintenance fee (about $5 average) and multiply by 10, so the room is about $71.20, compared to $400.

 

[Dean]

Many of us would add in the time value of money OR use appropriate rental prices but even then, it is often a good value unless you're doing just long weekends and even that has gotten better starting in 2010.

 

[logan115]

Many of us would add in the time value of money OR use appropriate rental prices but even then, it is often a good value unless you're doing just long weekends and even that has gotten better starting in 2010.

That's the way I modeled it. I'm comparing the difference between the initial cost (looking to buy about 100 pts via resale so budgeting $9-10K all in) vs putting that money in the bank, collecting interest, but then drawing on that account to pay for my room every two years. In most of the scenarios I worked out it seems like I "break-even" in about 10-12 yrs, and this break even assumes that my contract is worth ZERO at that point in time.

Realize that it won't be the case, but have assumed that my return (interest on the money in the bank), MF increases, and cost of renting points all increase in lock step.

Still refining the numbers, but I'm 95% sure it makes sense financially for us. Granted that things can/will change over time, but unfortunately my crystal ball is on strike so I'll deal with changes as they happen. Also figure that each trip I make as an owner (as opposed to a renter) lowers my cost basis, so if I have to sell sooner than I want I've at least received some value in exchange for selling for a loss.

Good luck,

Chris

 

[mousibility]

So in the end is DVC really a deal? Do you pay everything upfront or make payments?

 

[dianeschlicht]

So in the end is DVC really a deal? Do you pay everything upfront or make payments?

It's the best deal if you pay up front. This is, after all, a luxury item....pre-paid vacation accommodations for up to 50 years.

 

[Chuck S]

So in the end is DVC really a deal? Do you pay everything upfront or make payments?

Dues are an annual assessment, they can be paid in an annual lump sum or via monthly bank debit.

The initial purchase can be paid all at once, via Disney mortgage with monthly payments, by you own line of credit, or whatever means happes to be available to you. Some people take an equity loan on their hose for a lower interest rate than Disney. Though in the current bank economy, that option may not be readily available. We did a short term (3 year) note from Disney.

 

[crisi]

So in the end is DVC really a deal? Do you pay everything upfront or make payments?

For some people with certain travel patterns, yes. Its a pretty good deal.

For other people, no - not a good deal.

Generally, these things make it a better deal - the more you have in this list, the better deal it becomes...and some of these add more value than others

You go to Disney regularly
You stay in a Deluxe resort
Onsite is important to you
You need more room than a regular room provides OR you will stick to DVC studios (a lot of DVC members move to bigger rooms - that's a nicer experience, but it isn't a money saving deal).
You can plan in advance
You won't be cancelling reservations
You don't mind limited mousekeeping
You will cook some meals in your room
You do laundry at Disney
You don't use your points for non-DVC options (or at least not often)
You don't mind missing "deals" like "free dining" or "7 for 4" (or whatever it is they are running now).
Can pay cash up front.
Can make a multi year committment to Disney vacations
As of right now, you don't do long weekend (changing with a change to the point structure next year).

If you are happy offsite, happy in Values, eagar for the next deal from Disney, would miss daily mousekeeping enough to end up paying for it from DVC, going to use your points to cruise all the time - probably not a great deal.

 

[Mississippian]

You divide the $106 by the length of the contract. So if you buy at a resort with 50 years left, $106/50 = $2.12 add the current maintenance fee (about $5 average) and multiply by 10, so the room is about $71.20, compared to $400.

Chuck,

You really need to factor in the time value of money. Assuming you are able to earn 8 percent on your money, then the cost of owning a $106 point is $8.48. I suppose you can then add the $2.12 plus the $5 maintenance, for a total annual cost of ownership of $15.60.

However, most of us didn't pay $106 per point. I'm a fairly new member and I only paid just over $80 per point from Disney. Also, there is a huge inflation hedge built into this. So even if DVC is only a fair deal for the first few years, the fact that it locks in two-thirds of the costs makes it a really good deal.

 

[Dean]

That's the way I modeled it. I'm comparing the difference between the initial cost (looking to buy about 100 pts via resale so budgeting $9-10K all in) vs putting that money in the bank, collecting interest, but then drawing on that account to pay for my room every two years. In most of the scenarios I worked out it seems like I "break-even" in about 10-12 yrs, and this break even assumes that my contract is worth ZERO at that point in time.

Realize that it won't be the case, but have assumed that my return (interest on the money in the bank), MF increases, and cost of renting points all increase in lock step.

Still refining the numbers, but I'm 95% sure it makes sense financially for us. Granted that things can/will change over time, but unfortunately my crystal ball is on strike so I'll deal with changes as they happen. Also figure that each trip I make as an owner (as opposed to a renter) lowers my cost basis, so if I have to sell sooner than I want I've at least received some value in exchange for selling for a loss.

Good luck,

Chris

One LARGE mistake many people make is using the DVC rack rate as the main comparison. Other than one member of this board who routinely paid cash for suites prior to joining, this approach is an extremely poor method of judging the value. I think DVC often doesn't save you money but rather gives you more for around the same amount of money. Nothing to sneeze at but a different criteria than financial.

So in the end is DVC really a deal? Do you pay everything upfront or make payments?

The answer is it depends. In large part it's a gamble on what maint fees and cash prices will do over time. For some, it's a very good gamble, for others,not so much so. And for some it's actually more expensive than if they paid cash.

 

[bluenosemickey]

There's one more factor to consider... while it's not financial, I still feel it's important... emotional.

I crunched the numbers every way I could, then finally I asked myself, "Do you want to own a little piece of Disney?"

The answer was "Yes!" It makes me happy to own this. I can't say that about most things that I own.

We look forward to the trips as a family and it gives us something we can all relate to (for now, at least). We have taken the grandparents and the cousins with us on trips, that would not have happened with cash vacations.

I still think it was a good decision financially to own DVC, for us at least. This also makes me happy. And it has been amazing how many deals on travel I have been able to get now that I have a consistent destination in mind. I don't find we have "saved" a lot of money at the end of the day, but taken many more trips, in really nice accommodations, for the same money we had previously spent on much fewer, less satisfying locations.

I also expect the value to grow as time passes and cash prices also go up. I'm thinking the 10 year mark will really make me glad we did it.

Just my 2 cents.

 

[Dean]

There's one more factor to consider... while it's not financial, I still feel it's important... emotional.

IMO, this is only a factor IF it makes sense financially, or at least that's the way it should be.