It seems like DVC is a screaming good deal, no?

Discussion in 'Purchasing DVC' started by GeoffM24, Jul 21, 2004.

  1. GeoffM24

    GeoffM24 Mouseketeer

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    I have read some posts from people saying that it either takes a long time to make it worth while or that DVC isn't that great of a deal. I have run the numbers and it seems to me that it is a screaming good deal!

    My math:

    I can buy 60 points off resale for $4,940 including closing costs. 60 points buys me a basic DVC room for 5 weekdays. The rack rate for AKL is $260 druing the period I want to go. Factor in roughly $260 in maintance costs per year for DVC property.

    With these numbers the DVC pays for it self in a hair over 4 years! And that DOES NOT include the discount on park hoppers and other savings which makes the break even LESS THAN 4 years. This also does not factor in the value of the time share in 4 years when it will be worth at least as much as I paid for it. So in 4 years you have a free time share worth roughly $5,000 and spent exactly what you would have spent anyway.

    Kick it up to Beach club with a $360 per night rate and I'm breaking even in a little over 3 years.

    How is this not world's cheaper then not buying in?
     
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  3. spiceycat

    spiceycat dvc-blt,vwl,bwv

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    some of these people are comparing a 2-bedroom villa to a value resort - then the number won't add up. Or it takes them years to do it.

    they aren't comparing like to like - a deluxe hotel room with a studio - 5 to 10 years.

    also take into consideration the discounts. (yes I know that WDW probably won't take discounts forever - but for the next 5years they probably will so you need to take that into consideration).

    Some of I do believe are other timeshares salespeople and do their best to make DVC look like a bad buy.
     
  4. crisi

    crisi DIS Veteran

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    Or they figure they'd never pay rack rate. If you never pay rack rate, it takes a little longer to pay off.

    Or they are working with 150 points - which makes it harder to break even because 150 points for most of the year means more than a week in a studio. So if you are only going a week now, you are making choices like upgrading to a one bedroom, staying longer, going more often. Which adds expense.

    We figured (I think) 6.5 trips.
     
  5. GeoffM24

    GeoffM24 Mouseketeer

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    So say 6.5 trips and then you have a free timeshare worth thousands which isn't "breaking even" that is making money.
     
  6. jarestel

    jarestel DIS Veteran DIS Lifetime Sponsor

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    Well, that's one way to look at it. Some of the things that MAY cause problems with your plan:

    Many of us buy with the intention of only going once a year, but find we like the DVC experience so much, we end up taking multiple trips per year. Ring up some more points here!

    If you have or anticipate having children, at some point you'll outgrow the "basic" DVC room and will require larger accomodations. Ring up some more points here.

    A lot of the fun of DVC ( for us, anyway ) is inviting friends and family who have never been to WDW to join us. This definitely requires multiple rooms. Ring up some more points here.

    I think you'll find that many people here who bought a small number of initial points, end up adding on ( ringing up some more points ) within a couple of years because we do enjoy the experience so much. Your numbers look great as long as you can stick to the plan. If not, be prepared to ring up some points! Good luck!
     
  7. rocketriter

    rocketriter DIS Veteran

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    I read posts all the time implying that DVC is not a good deal because it incites a family to go to WDW more often and spend more money. I just hope these posters are writing with a wink
    ;)
    because DVC is an inanimate entity that doesn't incite anyone to do anything. If you choose to go more often or take more relatives, then God bless! It's a positive choice to take advantage of an opportunity that's made by a responsible adult, not a negative that can be blamed on DVC and factored against the presumed profitability of a timeshare purchase.
     
  8. Mickmse2002

    Mickmse2002 DIS Veteran

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    I still maintain that DVC is a screaming good deal as it is a basic hedge against future inflation and price increases for rooms. There are lots of different ways to value points, rack rates, discounts, lost income potential if you invested the same money, interest rates, the price of tea in China and the list goes on and on. DVC is a screaming good deal as it provides first class accommodations at first class resorts for families to enjoy together.
     
  9. CarolMN

    CarolMN DVC Co-Moderator Moderator

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    There is some risk in assuming you will be able to sell your "investment" in 5 years for what you paid for it. If Disney stops exercising its ROFR, prices will almost certainly decline.

    Also, at some point as the number of years left on the contracts decline, so will the price. Individuals assess/quantify this risk diferently, but it is still there.

    I agree DVC can be a good deal in the right circumstances, but I am not counting on "recouping" any of our initial outlay. Great if it happens, but it is by no means a sure thing.

    Best wishes -
     
  10. jarestel

    jarestel DIS Veteran DIS Lifetime Sponsor

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    Yep! But it costs money in order to do these things. If all you factor in is the cost of the accomodations, you'll definitely love your break-even point. Bottom line is everything associated with going to WDW does cost money ( food, tickets, transportation, etc), and if you want a reasonable estimate of costs, it should be considered. If you inferred anything negative from my post, you misunderstood the point.

    Having made more than a dozen trips to WDW since joining DVC, I could compare the savings from the DVC accomodations vs staying in a deluxe resort and convince myself that I had "saved" a lot of money. But the "true" cost is way higher than just comparing room costs.
     
  11. Lisa P.

    Lisa P. DIS Veteran

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    I can buy 60 points off resale for $4,940 including closing costs. 60 points buys me a basic DVC room for 5 weekdays. The rack rate for AKL is $260 druing the period I want to go. Factor in roughly $260 in maintance costs per year for DVC property.

    Many people who calculate the costs of a timeshare consider two things: opportunity cost and annual fees. Opportunity cost is the cost of tying up your purchase monies, often figured between 5%-10% of the purchase price ($247-$494, in your case).

    So this would place your ongoing annual expenses at approx. $507-$754 for 5 weeknights in a studio at OKW (only 4 weeknights during school breaks at the other resorts). If you include a Friday or Saturday night, then you reduce the length of your stay by at least 2 weeknights.

    Considering that you would be making a commitment with your money, and depending on your anticipated travel plans, this could either be a great deal or a poor one. Many money-conscious people avoid paying rack rates and like to take advantage of special deals and discounts.

    With these numbers the DVC pays for it self in a hair over 4 years!

    And what if your best case scenario doesn't end up being as you would like to use the points? What if you decided that you'd like to spend a long weekend, using less vacation time from work? What if you wanted to visit during a more popular season? Then, your annual costs of $507-$754 (and 60 points) would not even provide a Sat/Sun 2-night weekend without borrowing. Certainly, if you are looking to make the most of the points, you would not choose to use them this way. But by only looking at the best case scenario, it's inaccurate to characterize DVC as a screaming good deal.

    And that DOES NOT include the discount on park hoppers and other savings

    A bargain is not a bargain unless you had planned to make the purchase anyway. If you would have purchased a length of stay pass, then you would see a DVC discount. There's no DVC discount on park hoppers. Look carefully at the DVC discounts to see whether they are purchases which you would normally expect to make. Since they're subject to change, it's wise NOT to count these benefits in calculations of costs anyway.

    This also does not factor in the value of the time share in 4 years when it will be worth at least as much as I paid for it.

    Careful there. Timeshares are not a financial investment. There is NO guarantee that they will be worth anything in 4 years. The past is not an indicator of the future, particularly when it comes to leisure expenditures. Do enjoy what you buy but don't assume any financial return. Let that be icing on the cake, if it happens.
     
  12. pumpkinboy

    pumpkinboy <a href="http://www.wdwinfo.com/dis-sponsor/" targ

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    All of our calculations are different. Like Lisa P and many others I had to factor in opportunity cost, for which I used the cost of my mortgage (what is not used for DVC might otherwise go to pay down mortgage and save there). BTW, first rate analysis, Lisa P!

    In my calculations, Buying BWV new (which you could do when we bought), the payoff period ended up in the high 9s, but still ended up being, as you say a screaming good deal for us. As a comparable, we used the average room cost of our last 4 trips (POFQ, Swan, Swan, AKL -all but the first with good discounts). Plus, I am not counting on being able to recoup my initial investment either, but it would be nice if we could (but then we wouldn't have "our own place" at WDW anymore).

    For our non-US friends it has become an even better deal with the weakness of the US dollar. This may change with interest rates going up and possibly a smart Democrat coming into the White House to finally help the economy, but for now our weak dollar is to our foreign freinds' advantage buying into DVC.

    Of course, now that we own, we need more points so we can spread out in the manner to which we have become accustomed.:teeth:
     
  13. SoCalKDG

    SoCalKDG <a href="http://www.wdwinfo.com/dis-sponsor/" targ

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    "Then, your annual costs of $507-$754 (and 60 points) would not even provide a Sat/Sun 2-night weekend without borrowing. Certainly, if you are looking to make the most of the points, you would not choose to use them this way. But by only looking at the best case scenario, it's inaccurate to characterize DVC as a screaming good deal."

    So you pay cash for the weekends. Thus you get a major discount on weekdays, and pay the same amount on weekends(less since you get a DVC discount) like you would if you didn't have a DVC membership. It is a great deal. Many people already move out on weekends to maximize value. Having less points to just cover 5 weekdays, combined with paying cash on weekends does the same thing.


    "There is some risk in assuming you will be able to sell your "investment" in 5 years for what you paid for it. If Disney stops exercising its ROFR, prices will almost certainly decline. "

    I keep reading this, but would it really go down? Because many of the DVC's are attached to regular hotels(BW, BC, WL) the cost of regular rooms will always keep the DVC rooms up. If Disney charges $400 per night for their rooms 5-10 years from now, point value isn't going to drop to $50 per point. This would allow people to get studios for $65-$75 per night. Won't happen. The demand for points would be higher than the supply, keeping up the cost. Now if Disney goes downhill, thats another matter. All my opinion of course.
     
  14. GeoffM24

    GeoffM24 Mouseketeer

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    Points will 100% have value until they expire and even then they might have value if they give you the ability to buy into a new timeshare etc.


    While I agree that the value will decrease as the expiration date approaches I have zero concerns about them not having value at any point in the next 38 years. As long as they buy rooms, they have value.
     
  15. spiceycat

    spiceycat dvc-blt,vwl,bwv

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    do you use opportunity cost when you buy a car?????

    sorry folks this is not a big time expense - you are not paying $100,000 or more.....especially buying until a 100 points.

    I looked at it as buying a car (yes a more expensive car) - but in the long run - much, much better for me and my family.

    I would have brought the tickets that I did? - well at that the time we were going to WDW 2 to 3 times a year - so yes I have increased my visits - but the time in the parks (since they did away with the free passes) not really - we go alot - but we don't to the parks alot. there is a big difference.

    this might change if DVC comes out with a good discount on the annual pass.

    oh some people actually have will power (I don't....) and stick to the previous vacation plans......

    Now my food prices have gone down - why - no longer eating everything in WDW restuarants. I have allergies so this was a big PLUS for me. The grocery prices in Florida are not greater than what I pay at home. You would need groceries anyway. I only shop off-site.


    I try to get tickets when I see a good sale from a known seller of WDW tickets. They do happen.....
     
  16. rinkwide

    rinkwide <br><img src="http://www.wdwinfo.com/dis-sponsor/i

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    Are you impling DVC contracts might be worthless in 4 years?

    Try and tell that to the early buyers who bought OKW back when it was called DVC.
     
  17. st92jmdc

    st92jmdc Now a Proud DVC Member

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    It's a GREAT deal. How many of us contantly say that they wish they had done it earlier?

    The only "bummer" is that there is no "investment" after 50 years (SSR). Other timeshares are owned property and could be sold 5 years from now, if need be.

    But I don't care.
     
  18. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    I agree they will have SOME value, but it's hard to predict exactly what that value might be. DVC has a vested interest in keeping resale prices within a stone's throw of prices for "new" contracts. Therefore, they will exercise Right of First Refusal on any contract that they think is changing hands at too low a price.

    The net result is that resale prices are set more by ROFR than they are by supply and demand.

    It's conceivable that DVC at some point in the future, DVC could determine that the timeshare market is saturated and stop building new resorts. If that happens, they would have zero interest in exercising ROFR. Prices would then be 100% dictated by supply and demand. And, it's impossible to predict what might happen to resale prices under these circumstances.

    I think you are absolutely correct in the DVC can pay for itself in a very short period of time. Personally, I think your only mistake is dwelling too much on the "value" of your points throughout your ownership. That really is a big unknown. The only certainty is that you will have a great place to vacation for the next 38 years at a great price. IF you should decide to sell the contract at some point, sure it will have some value. But it's nearly impossible to determine what that value might be in 5...10...20...30 years.
     
  19. WithDisneySpirit

    WithDisneySpirit DIS Veteran

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    Yes, GeoffM24!!!! I agree with you completely::yes::

    That is why after purchasing 230 OKW points several months ago and not having been home yet (October:teeth: ),
    I have not suffered even one poor nights sleep:earsboy: I am so excited about the next 37 or so years of vacations with my family:hyper:

    Are you all set to buy DVC?

    Lisa:sunny:
     
  20. spiceycat

    spiceycat dvc-blt,vwl,bwv

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    I think some people would like DVC to be treated like the other timeshare in the area - other words you can get on the resale market for half it value (or even less).

    I don't think this is going to happen period. Why? think about it folks -if DVC is not interested in buying back DVC - yes the value will decrease - but WDW will not let it decrease that much - they have a vested interest in kepting DVC up and in good shape. they will get the property BACK in 2042 or 2054. RIght now CRO has little trouble renting DVC properties -do you see that changing???? We only get penality if we cancel 60 days before - another words in 60 days or less - CRO can and will generally rent the property. Most hotels would love that turn around - CRO does it all the time.

    too many people want to stay ON-SITE - the DVC resorts are the only on-site timeshare (no matter what Fairfield says)....as long as that is true - the demand will only increase.

    I brought in 93 - of course with this latest price increase if I wasn't already a member - I don't think I could afford it.....It has become very high price.
     
  21. HUFF590

    HUFF590 DIS Veteran

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    All I to say I really dont care what I paid .or how long it will take to pay for itself, I dont rent points, I just love to go on vacation at WDW and the DVC resorts, I NEVER worry about how much or how much that, my DW and I just plain love it ,so dont woory about making money or if you lost money a true DVC member just plain loves WDW and family values. Injoy relax have fun.:sunny:
     

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