I'll start with the initial info of our pontential contract that is currently in the ROFR process. We will pay $55 a point for 175 pts and closing costs. This comes out to roughly 10,400. We have been to disney the last four years and see ourselves going back every year (maybe skipping a year sometimes). Now, I figured our break even point to be somewhere in the 8 to 9 year timeframe. In 9 years we will (potentially) have spent $20374 for our points (initial cost plus MF figured in at 3% increases a year). If we would have rented for those 9 years we would spend $22476 for the same amount of points (this is figuring $12 per point and a 1.5% increase in point rental price per year which I find very conservative) Now, if we had put that $10400 in a high yield savings account with a 1.6% yield, at the end of 9 years we would have $12189. Take out the $10400 initial investment and the gain is $1789. Now these figures start to make a little more sense. Add the $1789 opportunity cost to the initial DVC purchase price and yearly maintenance fees of $20374 to get $22163 which is less than $22476 that we would have spent on renting. My example figures in a set increase or rate for every year. I realize its not exact. It also assumes that our traveling desires stay the same for the time period (deluxe studios) And it does not account for the 2012 banked points and the 2013 points that we will be unable to use unless we go above what we would normally do and either take another trip or upgrade to a 1 or 2 bedroom for a year. Nor does it figure in that at the end of the 9 years we could sell and potentially (depending on DVC demand by then) make back a good portion of our initial DVC investment. I know the mathematicians are ready to carve this up! LOL I tried to make sure everything was unbiased as I could in my figures so give me your feedback.

I love reading these posts and looking at assumptions people are using to determine the pros and cons of ownership. Two comments on the calculations: 1) I think interest rates should probably go up sometime in the next 9 years. Unless you are locking in to a 9 year term, you may make more interest than what is calculated above. 2) One of the more interesting comments (posted by tjkraz) on another thread was that if you do not purchase DVC you will have to pay for your rentals from the money you are considering saving. Therefore your savings will decrease a little year by year. He made a really interesting table to that effect. I will try and find it again and copy paste it into this thread. It is not something I have read before and it makes a lot of sense when making these types of calculations.

Thats what I was looking for was constructive criticism. I am good with math but no expert by far! LOL. I had thought about the savings concept as well but then my brain said enough is enough just post the thread already!

Copy pasting is not working well in this case. Click on the following link and go to post number 109 on page 8 of the thread. http://www.disboards.com/showthread.php?t=3096519

Some dues have increased as much as 6 plus percent. You assume that a studio is where you will stay most of the time. We have found that more time is spent at the resorts and less in the parks after a few years. We started in studios, now we do 1 bedrooms. When we try to go back to a studio, we really dislike it. Disney is a luxury vacation and you will spend hundreds of thousands of dollars on your Disney vacations over the years. Take the time to choose the best favorite resort and UY. Bill

Those numbers certainly work but be warned, owning DVC is addicting. I did the same thing in 2009 when we bought with the 180 points that would work out to saving money over our current vacation habits. Fast forward 4 years and I now own 430 points...took 4 trips in 2012 instead of the once a year trip and voila...not saving any money!!!!! LOL But, I don't regret a thing, love my DVC and have added wonderful memories and huge stress relief to my life...wouldn't trade it for the world!! Congratulations in choosing to join us in the DVC world and good luck with ROFR!!!!!

I would use different assumptions that are less favorable to your break even but assuming you compared buying 175 points to renting 175 points, the end result is the same just maybe a few years later. If DVC makes sense for you financial and personally, I'd go for it. Good luck with your resale ROFR.

Nice analysis. I agree with many of the tweaks that others have suggested, specifically raising your projected MF increase amount. You also need to look at what purpose this money serves for you. Is it savings? If so, you are correct in trying to determine opportunity cost. For me, however, the money I spent on DVC was going to be spent regardless. If it wasn't DVC it was going to be an upgrade in cars (but we like the ones we have now) or some extravagant vacations (like ABD). We chose DVC. So in our case the opportunity cost was zero because we committed to spending that money. You have to assume that money saved and invested will ALWAYS get you a better rate of return than spending it. So it's a bit of an unfair comparison, and if we used it for all aspects of our lives, we would still be wearing clothes from the 80s and watching out 13" black and white televisions. Yes, we should advocate spending money wisely, but inherent in that is the fact that we are advocating spending money. There comes a point where you need to spend money to enhance your life. If it is even close, I would give the edge to buying over renting. Where it becomes a gray area is when the cost of the points is so high that the value has been removed from the product, but I digress. The real question might not be whether you should rent or own. The real question is whether or not you can afford to purchase DVC. If you can, and you want it, how many analyses do you need?