$12.29 a point...

[cwhiteh2]

I recently decided to look into becoming a DVC member. My inlaws signed up last year and took us on vacation. I was kind of impressed with OKW 2 BR after staying in All-Stars for 5 years.

The deal I was offered at SSR, was $87 a point after incentive for 49 years and no dues until 2006. I figured that for 150 points I'd pay $13,050 (with $1650 down and financing $11400 @ 9.75% = $17889.60) so $19,539.60.

I figured my dues would start at $3.82 per point ($573) and at 3% increase a year wind up at $15.79 per point ($2367.78) in 2054 (Only January..so $2298.81 thru 2053 and $197.32 the 1 month). An average of the dues would be (573*48 + 2299*48) / 2 = $68,928 over 48 years. (Since 2054 is only up till 1/31)

So, $68,928 + $19, 539.60 = $88,467.60 or $1843.08 per year or $12.29 per pt. ($11.16 per point if you avoid financing)...

I thought about resales, and using the same calculations (without financing the points), I figured out that a vero beach resale at $63 per point would be $11.45 per point (over 36 years).

So my overall question is, if I can rent points at $9 with no monhly payment or contract. What is the benefit in being a member if in reality I'm not going to need 49 (or 36) years worth of vacation accomidations?

I guess I need something to push me over the edge, but right now it seems like I can be content renting. Especially since the disney cruise seems impracticle to use points for. Thanks for the advice in advance.

 

[Lesli54]

It depends on how often you really think you will use points to book vacations over the years and to where. They can be used to book vacations at other locations around the world than just the Disney properties.

You do have to take into consideration that the cost to rent will go up over the years as will the cost of accomodations if you weren't renting.

However, it really does go back to knowing your vacation habits. Some like the fact that this forces you to vacation (a big plus for those Type A workaholics), others like the flexibility of staying in various places, and others just like to be in WDW every year or couple of times a year.

As for us, we bought in because we were a family of 5 (now 6) and knew that getting a suite or two seperate rooms (I don't want to do) would eventually be cost prohibitive. At least with DVC, we can get a 2br and have the ability to prepare a few meals in the villa. Some like to eat out all the time, but we choose not to. Also, we knew that over the next several years, we would go to WDW every third year (various reasons), so we just plan a longer vacation (this year 11 nights) by using banked pts from previous year, using the current year, and borrowing from the next year.

It works for us. This year we will use our villa as a home base and do quite a few things off property as well as on. It is a nice change of pace when we are not RVing.

In the long run you really need to know your vacation habits, because it is a prepaid vacation for the next 49 years.

 

[bongo59]

your math is great..........but what your calculations dont account for are these two huge things..........One youre going to go alot more with ownership than you think but secondly and most importantly the points are not indexed to inflation..........so as room cost rise point cost dont...........and you numbers will be very different 5 yrs from now..........how do i know this.........we used to go 5-7 times a yr prior to buying 91..........since buying we have had my accountant estimate that we have saved close to 150,000 dollars on our vacations since joining in 91..............my bet is you will too over the first 15 yrs............and no where int he tourist travel industry can i have found that value................

 

[rayelias]

First, $9 a point anymore is a STEAL! From what I've seen, unless there's desperation, $11-12 is about the norm anymore. On Ebay, I've seen them go for considerably more.

Do you really think that in a year, or 5 years down the road you're still going to be able to rent points for that price? The whole deal, IMHO with DVC, is you have to look at it long term. For the next 3-5-7 years or so, you're really not getting any major deal. But, at that 5-7 year mark, after you have a couple years of inflation, Disney room rate increases, etc, your DVC purchase is going to look REAL good!

The way I looked at my purchase was this...

There's just the 2 of us, so we plan to always use a studio. We figured, based on our vacation habits, that 80 points was really all we needed. At OKW (our home), 80 points would get us 10 nights - so 2 6-day vacations a year. Although, the extra 12 years at SSR was VERY attractive, we couldn't afford 150 points, especially at $87. We also chose to pay cash, instead of finance, to save interest. This took a little while, but we're much happier to have this paid in full. We finally found a 100 point resale that we purchased for $73/point. This gets us THREE 5-day vacations (4 nights each) a year!

So I don't have to recalculate everything, I'm going to use your figures as a basis and use rough-estimates for my calculations. This is what it's costing us...

$7,300 for points.
(you're average dues comes out to $4.76. I think that's low, so I'm going to use $6 to be extremely conservative)
$600/year for dues X 38 years = $22,800
Total: $30,100 / 38 years = $792.11/year

So, for the next 38 years, I'll be paying an average (VERY rough estimates) of $792/year for 12 nights in a studio. That's $66 a night to stay at OKW for the next 38 years. That's a GREAT deal in 2005. That's going to be a TERRIFIC deal in 2010. In 2030, that's going to be a SPECTACULAR deal!!!

To look at your #'s at SSR...

You're estimating $1107 a year total cost to you can spend at SSR (with proper planning (no weekends)) 13+ nights a year. That's just $85 a night. Not bad for 2005. Can you imagine what room rates will be in 2040? You'll only be paying $85 a night!

Convert that to a 2 BR, and you'll get 5 nights (6 days) for about $220 a night. That's less than the rack rate for a studio in 2005! I believe the rack rate (in 2005) for a 2 BR is about $500. So, you're paying half right away! Even if you rented points at $9, you're still ahead!

Hope this helps. Good luck with your decision!

 

[cwhiteh2]

good points...

I'm pretty lazy by nature, so forcing myself to go on vacation won't be an issue..haha

I live in Tampa, Florida (with wife and three kids 11, 5, 3) and have season passes..We have went three times this year so far and plan to go back for a "3" day in May. We normally get a room at an All-Star, for between $70 and $100 and stay on a Friday or Saturday night (rough sleeping haha). I figured the price/points out to compare my once a month weekend to the DVC value. Kind of dissapointing that Fridays and Saturdays (our specialty) are double the points.

But we don't buy a pass every year, but next year want to take a disney cruise, so I figured much like paying rent, if you are going to pay $2000 a year anyway why not get some equity.

My biggest issue now is the fact that instead of DVC being more economical, it might just be extra money spent. If use my points wisely (Sun-Thurs), I'll still be paying cash for my weekend trips.

My last point is, do you think the current $9 - $10 a point standard for renting will go up much more than 3% per year, seeing as the members needed points to rent will stay the same (only dues will rise)? I know 10 years from now when an All-Star cost $250 a night you could demand more, but only a couple of dollars more...

 

[Alexander]

If the All Stars jump to $250/night, what do you estimate a night in a 1 bdrm villa to go for on cash? Right now they top $300-$400/night. Therefore, point rental only going up a couple of dollars following that? I don't think so...I think you'll see points close to the $20 mark if this is the case. $400 a night to stay at OKW in a 1 bdrm will be a sweet deal!

 

[Lesli54]

From what I have read, the rental price per point hasn't changed in a few years. So like everything, I think you will see it eventually go through a correction phase and probably soon.

Even as the dues rise and the actual price per point that a member has paid may not increase overall by but a few dollars in the end, you still have to consider the value. As it is now, an OKW studio can be rented at 27-37% of the rack rate, if you consider you can rent a studio for $80 (8pts @ $10 in Jan) and the rack is $294. That's an great deal, but I don't think it will stay that way. DVC members won't continue to rent studios and villas at a very small fraction of the cost as the rack rates go up. If you bought a house to rent and it only cost you $500 per month you won't continue renting at $550 if other similar homes are renting at $1500.

We rented 11 points (1/3 of what was needed) to add to ours for an extra night in a 2br this summer and paid $10/pt. It was a great deal, but we would have paid $13 if that was the going rate, because that is still less than 1/3 of the rack rate of the room.

Also, I don't think you can compare a studio to the All Stars because you are getting a kitchenette with the studio and only a bedroom at the All Stars.

 

[DebbieB]

One thing to consider is the value of DVC has appreciated, unlike most timeshares. I bought at $65 per point in late 1999 at BWV. Resales are now going near $80. I would not buy Vero unless you plan to stay there, resales are still in the $65 range there and are probably not going to grow (dues are also much higher). Although I don't plan to sell, it's comforting to know I could and not lose any money and had years of great vacations.

 

[Tramp68]

Do you know that you can actually join through an add on and get the 100 bonus points as well?
It does require you to pay for 25 points up front through your in-laws but then you can buy a 120 point add on and get 100 bonus points to use or bank for your first year. It actually makes it a great deal since you can even rent out those points for an additional $1000 discount.

 

[champagne27]

Just an FYI... you stated that "at 3% increase a year wind up at $5.62 per point ($843) in 2054" I think you might have added 3 cents per year...

Using 3% it would actually be closer to $15.78 a point in 2054 - big difference in your calculations that I wanted you to be aware of. On 150 in 2054 that would be $2367 a year in dues.

IMHO though, I am banking on the fact that $2367 for a week's accommadation in Disney in year 2054 is still going to be a heck of a deal. People pay that all the time now for a week...(Granted that does not account for the initial purchase which you could say is about $400 each year over 49 years...)

Depending on how often you want to go, maybe a smaller contract via resale that you could bank and borrow on might be an option...

Good luck with your decision - it is a big one.

~Karolyn

Anxiously waiting to pass ROFR on BWV!!!!

 

[BillPA]

Your numbers look fairly good, but you didn't add in the equity you talked about.
Let’s say you go and use all your point for the next 20 years, and then for some strange reason you don't want to go to WDW any more or at least not every year. You can sell the points, for at least what you paid or more. If you rent, just like anything you rent, you have nothing 5-10-20 years later except another rent payment. The current resale price of $75-$85 has inflated nicely over the $57 I paid back 12 years ago.

Just another way to look at the total cost. And if you do sell in 20 years, the dues cost will not be as high as your projections.

 

[Laurabearz]

Bill... I am not sure in 20 years one would be able to see the points for more than you paid for them. It holds true now... even for us, since we bought in at 64 pp.... but 20 years from now... I doubt it. Hopeful, yet doubtful.

Still, I feel the DVC will fair better than a lot of other timeshare resales.

 

[cwhiteh2]

Very true about the equity.

I can honestly say this is a good deal now and a great deal in 15 years, but I wonder if resales will be as hot in 20 years as they are now. But you'll make money in the long run no doubt...

Me and my wife even talked about renting out all our points for the first 10 years to pay for the other 38...haha

thanks again for the help and hopefully will be full fledged here soon..

 

[klh]

Remember, You can use the membership for a few years or so, then sell it and get some or maybe more then what you bought it at. So at the end of the day you just paid Maintenance cost for your vacations.

 

[blitzkrieg048]

your math is great..........but what your calculations dont account for are these two huge things..........One youre going to go alot more with ownership than you think but secondly and most importantly the points are not indexed to inflation..........so as room cost rise point cost dont...........and you numbers will be very different 5 yrs from now..........how do i know this.........we used to go 5-7 times a yr prior to buying 91..........since buying we have had my accountant estimate that we have saved close to 150,000 dollars on our vacations since joining in 91..............my bet is you will too over the first 15 yrs............and no where int he tourist travel industry can i have found that value................

well put !!!!!!!!!!

 

[Dumbo]

I guess I need something to push me over the edge, but right now it seems like I can be content renting. Especially since the disney cruise seems impracticle to use points for. Thanks for the advice in advance.

Here is something else you need to consider. I bought 150 points at Boardwalk Villas in 1999 for $55. a point. (using Magical Beginnings incentive) I can now sell my BWV points at resale for a nice profit, even taking into consideration the 6 years worth of annual dues. I have since enjoyed 6 years worth of Disney Vacation Club vacations. I can sell and would have stayed at DVC villas for basically nothing.

Dumbo

 

[maja36]

Sure points rent for $9-12 right now, but in 10 to 15 years, members of DVC will rent their points out to be just under the cash rate charged by Disney. You can bet that the current price for point rental won't be around, and you'll be wishing that you made the investment. My dh and I went through all the numbers already...

 

[bongo59]

Bill... I am not sure in 20 years one would be able to see the points for more than you paid for them. It holds true now... even for us, since we bought in at 64 pp.... but 20 years from now... I doubt it. Hopeful, yet doubtful.

Still, I feel the DVC will fair better than a lot of other timeshare resales.

Laura is will at SSR because it is a 49 yr deal vs the rest of the properties............that is why buying at SSR is very smart............my OKW contract was bought at 48 a point in 91............i can sell it now for 78-80 after 14 yrs....................