Am I doing the math right?

[MamaBear12]

Thinking about buying a smaller resale package (100-150 points) in a year or so when we can pay cash (probably SSR, but we'll see what the market is like then). So, I calculated about $9,000 for the points/closing and $6 MFs per point in say 2019...so around $8.57/point over the life of the contract (I know the MFs go up, but room rates will as well so leaving it at that).

To calculate whether it would make sense financially, I just "planned" 7 DVC vacations (anywhere from 2- to 7-night stays, at different resorts with some date and room type flexibility) and calculated the difference between rack rate vs. DVC. (I know not 100% accurate because of potential discounts...)

It looks like staying in a 2-bedroom AKA villa with DVC points for 7 nights (banking and borrowing) would save us at least 8-10k on that stay alone over rack rate (provided there are no discounts). That seems like huge savings! Am I missing something? It makes DVC seem like a no brainier, even if we only plan trips with our points every 2 years and only keep the contract for 15 years (we love WDW so I'm sure we'll keep it longer). The savings aren't as significant with other room types, but still substantial. I think we would easily "break even" in the first 6-7 trips (or less with a 2-bedroom AKV stay) and after that it's just the maintenance fees.

 

[Disney Dad ADL]

I think you've got the right idea. The way I was doing it is basically figure out roughly how many days I want to stay at WDW per year, then convert that to the appropriate number of points. Then compare the cost of the DVC membership with the rack rate for the room. I did actually factor in the increase in MFs per year as well as the increase in hotel costs (if you assume they are the same, then DVC usually gets better, but that's obviously a dangerous assumption). Then figure out how much a DVC membership costs over the life of the contract as well as rack rates over the same period.

So, you were looking at SSR to stay at a 2 bedroom at AKV? Not sure which dates you were using exactly, but my calculations look something like this:

A 2 bedroom at AKV Kidani for 7 nights from 2/4/17 - 2/11/17 is $5768 + $721 tax = $6489 for the week.
$6489 per year for 39 years = $253,071

At DVC, you would need 255 points for that week.
SSR expires in 2054.

SSR 255 points @ $85 per point = $21,675
SSR MF 2016 = $5.44 per year x 39 years = $54091 (assuming no increase in MFs as you said)
Closing Costs = $600
Total = $76,366


So in this scenario, you would save $253,071-$76,366 = $176,705
If you divide your savings over 39 years, then you get about $4530.

Obviously the savings you get heavily depends on what assumptions you use, but you get the idea.

A couple considerations:
1. If you are buying SSR, there is no guarantee you will get AKV at 7 months (though AKV is not super high demand fortunately, it still may be a problem during high demand times). It's probably a bit safer to assume you can only book at your home resort and do calculations that way.
2. You can typically get cash discounts as you said, so you might want to take off say 20% or so off the cash price
3. "Time Value" of money - if you're putting up $21,000 upfront, you're losing out on the potential earning power of that money. I don't really try to correct for it, but some might.
4. There is some risks involved (you sell because you don't like Disney or you run into financial trouble, Disney rack rates plummet because Disney loses popularity, etc.)

That being said, you're right that most of the time based on most of the calculations I've done you break even after 15 years of trips every other year seems reasonable if you are not factoring in discounts and other issues as noted above.

Edit: the other thing to consider is that you could rent DVC points instead. Usually when I've run those numbers, I get break even around 12 years or so of annual trips of buying vs renting, though there are some issues with renting as well.

 

[MamaBear12]

Thanks! Very helpful.

I was looking at early June, and that comes out to a little over $1,800/night including taxes. Comparing that to the 317 points needed for a week at that time (Savanah View...fewer would be needed for standard), I'm looking at over $12,600 (rack) or $10,080 (20% discount) vs. $4,438 if I rented the points at $14/point, and even less if I own...

We wouldn't count on staying in AKV...it would just be fun to do at some point with family. We would plan to try out all the resorts (if possible), but stay at SSR if nothing else opened up at the 7-month mark.

 

[gharter]

There are several spreadsheets out there that you can use to look at costs. If you google DVC_Point_Analysis.xls, you will find one (it was one of the easier ones to use that I found).
I'm not sure if it really helped us to decide to purchase, but it made it easier to justify it. Seriously, it does put in the costs you need to factor into purchasing or not and know what you final costs over the years will be compared to cash.

 

[Disney Dad ADL]

Thanks! Very helpful.

I was looking at early June, and that comes out to a little over $1,800/night including taxes. Comparing that to the 317 points needed for a week at that time (Savanah View...fewer would be needed for standard), I'm looking at over $12,600 (rack) or $10,080 (20% discount) vs. $4,438 if I rented the points at $14/point, and even less if I own...

We wouldn't count on staying in AKV...it would just be fun to do at some point with family. We would plan to try out all the resorts (if possible), but stay at SSR if nothing else opened up at the 7-month mark.

Sure, happy to help.

As long as you don't mind staying at SSR as a backup plan, it's really far and away the best value. And AKV 2 bedrooms aren't too bad at 7 months as long as they are not extremely high demand times (Savannah easier than Standard if that is what you were looking at).

Yes, generally speaking owning should be less than renting, but with renting you get more flexibility. Seems like you got the idea of the math, though which was your initial question.

Good luck with your decision!

 

[Dean]

Thinking about buying a smaller resale package (100-150 points) in a year or so when we can pay cash (probably SSR, but we'll see what the market is like then). So, I calculated about $9,000 for the points/closing and $6 MFs per point in say 2019...so around $8.57/point over the life of the contract (I know the MFs go up, but room rates will as well so leaving it at that).

To calculate whether it would make sense financially, I just "planned" 7 DVC vacations (anywhere from 2- to 7-night stays, at different resorts with some date and room type flexibility) and calculated the difference between rack rate vs. DVC. (I know not 100% accurate because of potential discounts...)

It looks like staying in a 2-bedroom AKA villa with DVC points for 7 nights (banking and borrowing) would save us at least 8-10k on that stay alone over rack rate (provided there are no discounts). That seems like huge savings! Am I missing something? It makes DVC seem like a no brainier, even if we only plan trips with our points every 2 years and only keep the contract for 15 years (we love WDW so I'm sure we'll keep it longer). The savings aren't as significant with other room types, but still substantial. I think we would easily "break even" in the first 6-7 trips (or less with a 2-bedroom AKV stay) and after that it's just the maintenance fees.

The trick is to spend less for the same you'd do otherwise or get more for around the same money. You don't know what the market will be in 15 years, it may not be marketable at the time though likely it will be. IMO using DVC rack rates, even discounted, is a fools comparison. I believe the 2 best markers are what would you have actually spent not owning DVC (I assume a 20% discount normally) and what would it cost if you rented DVC privately. If you'd stay onsite in a moderate or above you should come to the same conclusion but the actual savings will be less. You need to go through the calculations to understand where you are but you also need to consider that DVC almost never truly saves people money, that they're preferences change and that life happens. They go more often, more days and spend more on other things. Making some assumptions based on the wording of your post I suspect DVC is a good fit for you, good luck on making this happen.

 

[CarolMN]

Be careful using the least expensive booking categories for your comparisons. For example, if you used the value category at AKV, understand that there are a very limited number of those and they tend to disappear as soon as the 11 month window opens. Depending on the time of year you plan to travel, the same could be said for the standard views at BLT & BWV.

 

[MamaBear12]

Be careful using the least expensive booking categories for your comparisons. For example, if you used the value category at AKV, understand that there are a very limited number of those and they tend to disappear as soon as the 11 month window opens. Depending on the time of year you plan to travel, the same could be said for the standard views at BLT & BWV.

Thanks! I did calculate for most and least expensive options. For example, for trips where it would just be the four if us, I looked at the cost of a standard studio and a 1-bedroom (since I remember reading that studios book faster so we're more likely to get a 1-bedroom at 7-months out).

We can travel early Dec to early Jan, spring break, and mid-may to mid-August. High DVC travel time is fall through January, right?

 

[MamaBear12]

The trick is to spend less for the same you'd do otherwise or get more for around the same money. You don't know what the market will be in 15 years, it may not be marketable at the time though likely it will be. IMO using DVC rack rates, even discounted, is a fools comparison. I believe the 2 best markers are what would you have actually spent not owning DVC (I assume a 20% discount normally) and what would it cost if you rented DVC privately. If you'd stay onsite in a moderate or above you should come to the same conclusion but the actual savings will be less. You need to go through the calculations to understand where you are but you also need to consider that DVC almost never truly saves people money, that they're preferences change and that life happens. They go more often, more days and spend more on other things. Making some assumptions based on the wording of your post I suspect DVC is a good fit for you, good luck on making this happen.

Thanks for the feedback. We love to travel and have somehow ended up at Disney 2x in the last 3 years, so I think that will continue. We stayed in the Wyndham resort on site thanks to my husband's aunt and offsite the second time. Our currently limited income (husband-medical fellowship; me-grad school) has limited our ability to stay onsite. But, we would love to stay deluxe...I just don't think I can justify the price (even though we will be able to occasionally afford it), so a small DVC package seems like a good way to stay delux every couple years and treat extended family to a special trip without the deluxe price.

I will definitely have to give some more thought to renting vs. buying. Renting pros: no long-term commitment and potential access to any resort at 11-months so we could more easily get the resort and room we want. Renting cons: relying on another person to make the reservation and less flexible with canceling/changing reservation, and more expensive than buying if we use DVC long-term... Have I missed anything? So much to consider.

 

[disneynutz]

By design DVC rooms fill up all year long, your 11 month advantage guarantees with a few exceptions that you will get the room category that you want. DVC can save you money as long as your ownership doesn't cause you to take extra Disney vacations and you end up spending more money. In reality, that is what usually happens and Disney knows it. Also with DVC you don't have the same freedoms and flexibility that you do with a cash reservation.

Bill

 

[MamaBear12]

There are several spreadsheets out there that you can use to look at costs. If you google DVC_Point_Analysis.xls, you will find one (it was one of the easier ones to use that I found).
I'm not sure if it really helped us to decide to purchase, but it made it easier to justify it. Seriously, it does put in the costs you need to factor into purchasing or not and know what you final costs over the years will be compared to cash.

Thank you! I'll definitely check out that spreadsheet!

 

[MamaBear12]

By design DVC rooms fill up all year long, your 11 month advantage guarantees with a few exceptions that you will get the room category that you want. DVC can save you money as long as your ownership doesn't cause you to take extra Disney vacations and you end up spending more money. In reality, that is what usually happens and Disney knows it. Also with DVC you don't have the same freedoms and flexibility that you do with a cash reservation.

Bill

That makes sense. We like to travel (and everywhere), so unless we get really addicted to DVC, the plan would be to only go to WDW every 3 years (hoping we can check out Aluani, HH, and Vero with our points in between as well), and not go overboard on WDW. Just bank and borrow points to have very, very magical trips when we do go

 

[jahber]

... DVC can save you money as long as your ownership doesn't cause you to take extra Disney vacations and you end up spending more money. In reality, that is what usually happens and Disney knows it. Also with DVC you don't have the same freedoms and flexibility that you do with a cash reservation.

Bill

And really, this is why we don't buy DVC. Notwithstanding the fact that we would never ever ever pay deluxe prices or even mod rack rate, we would end up at wdw every year or two (or dealing with the hassle of renting points) when we could be anywhere else in the whole wide world. That's a cost I rarely see people factor--wdw is a more expensive vacation than most of the vacations we take. And yet I keep toying with the idea because Disney is just that good at separating people from their money!

 

[CarolMN]

Thanks! I did calculate for most and least expensive options. For example, for trips where it would just be the four if us, I looked at the cost of a standard studio and a 1-bedroom (since I remember reading that studios book faster so we're more likely to get a 1-bedroom at 7-months out).

We can travel early Dec to early Jan, spring break, and mid-may to mid-August. High DVC travel time is fall through January, right?

Good - you should not have problem getting either a standard view studio or 1 bedroom during the 11 month priority period for AKV.

And yes, early December - until after marathon weekend will almost always require an 11 month booking, especially for studios. You may occasionally find something elsewhere at 7 months for that time period, but lately, that has been quite a challenge (and mostly luck for those who end up successful).

Mid-May through mid-August is the time you will likely have several choices at 7 months.

Good luck with your "homework".

 

[disneynutz]

You should also consider renting a reservation from an existing owner. Less expensive than Disney's cash rate for a DVC room

Bill

 

[Disney Dad ADL]

We can travel early Dec to early Jan, spring break, and mid-may to mid-August. High DVC travel time is fall through January, right?

Yes, that's right, although I've noticed that mid-December isn't as bad as the end or the beginning. Even now you could book a 1 bedroom or 2 bedroom at SSR in the middle of December up through Christmas. May to August is usually not that popular due to the higher points requirements. Also, you are right that 1 bedrooms are usually the least popular, then 2 bedrooms, then studios are toughest to book, with cheaper views usually harder than the expensive ones. Grand Villas are a bit of a crapshoot since there are only a handful of them.

I will definitely have to give some more thought to renting vs. buying. Renting pros: no long-term commitment and potential access to any resort at 11-months so we could more easily get the resort and room we want. Renting cons: relying on another person to make the reservation and less flexible with canceling/changing reservation, and more expensive than buying if we use DVC long-term... Have I missed anything? So much to consider.

Yes you've got it right. Much easier to book high demand times if you are an owner rather than renting. Also with renting there is a small chance of fraud. Actually, the way we ended up buying DVC is that we were going to rent some points, but my wife just wasn't comfortable with the idea of someone else controlling the reservation, so we ended up buying instead (and then ended up buying another contract after that, lol). But there are risks to owning too which have been mentioned.

That makes sense. We like to travel (and everywhere), so unless we get really addicted to DVC, the plan would be to only go to WDW every 3 years (hoping we can check out Aluani, HH, and Vero with our points in between as well), and not go overboard on WDW. Just bank and borrow points to have very, very magical trips when we do go

The only issue with going every 3 years is that there is some risk that if something goes wrong with your schedule, you could lose points due to expiration. Every 2 years is much safer because if you need to delay or cancel a vacation, you can typically figure out a way to use the points later on.

 

[Dean]

Thanks for the feedback. We love to travel and have somehow ended up at Disney 2x in the last 3 years, so I think that will continue. We stayed in the Wyndham resort on site thanks to my husband's aunt and offsite the second time. Our currently limited income (husband-medical fellowship; me-grad school) has limited our ability to stay onsite. But, we would love to stay deluxe...I just don't think I can justify the price (even though we will be able to occasionally afford it), so a small DVC package seems like a good way to stay delux every couple years and treat extended family to a special trip without the deluxe price.

I will definitely have to give some more thought to renting vs. buying. Renting pros: no long-term commitment and potential access to any resort at 11-months so we could more easily get the resort and room we want. Renting cons: relying on another person to make the reservation and less flexible with canceling/changing reservation, and more expensive than buying if we use DVC long-term... Have I missed anything? So much to consider.

If income is limited, you might want to wait a while, esp if you have med school or other student loans. The difference between buying now and in a few years isn't that much and the risk might be less.

 

[Dean]

Thanks! I did calculate for most and least expensive options. For example, for trips where it would just be the four if us, I looked at the cost of a standard studio and a 1-bedroom (since I remember reading that studios book faster so we're more likely to get a 1-bedroom at 7-months out).

We can travel early Dec to early Jan, spring break, and mid-may to mid-August. High DVC travel time is fall through January, right?

Those are tough times to get reservations so one should plan to schedule and commit a full 11 months out and realize the the parks will be crowded part of that time plus Xmas and Easter will be a lot more points. A 1 BR will certainly reduce the savings dramatically but still might be of sufficient value.

 

[MamaBear12]

The only issue with going every 3 years is that there is some risk that if something goes wrong with your schedule, you could lose points due to expiration. Every 2 years is much safer because if you need to delay or cancel a vacation, you can typically figure out a way to use the points later on.

Thank you! Very helpful information. The plan would be to do a DVC trip every 1.5-2 years, but WDW specifically every 2-3. So, for example, I between the WDW trips every 3 years, we would use some points for a couple nights mid-week at VGF when we do a big trip to California, or a long weekend at Vero Beach, or a stay at Aluani when we plan our big Hawaii trip. That's how we would ideally use the points anyway ;-)

 

[MamaBear12]

If income is limited, you might want to wait a while, esp if you have med school or other student loans. The difference between buying now and in a few years isn't that much and the risk might be less.

We definitely will be waiting to buy until we can comfortably pay cash. I'm just a crazy planner and since its been on my mind since we got back from our most recent trip to WDW, just trying to feel out if this is something we should think about saving for.