Am I right or wrong?

[LoveMyLAP-BAND]

Hey all,

Friends of mine went to Disney for the first time last year and they LOVED it. They want to go back every other year and asked me for "advice" about buying into DVC. She is a teacher so they would be going during "peak" times- like Christmas or Easter or summer.

Here's what I figure. I'd like to know if I have it right.

They want a two bedroom at The Villas at the Wilderness Lodge. They would need 462 points for each vacation. So they can buy 231 points and bank the points they don't use on the year they don't go.

They can purchase 231 points for about $20,000. The maintance fees would be $1090 per year. The vacation would "cost" them about $5514 each visit. Here's my math.....

The cost per year of original purchase price ($20000/30 years)= $667
The loss of interest per year (5%) of not investing original $20000= $1000
Maintance fees per year= $1090

So if we add that up, it's $667 + $667 + $1000 + $1000 + $1090 + $1090= $5514 or about $788 per night. Not bad because renting a two-bedroom for Disney would be $920-$1000+ per night.

But they could rent someone else's points for about $10 a point. Times that by the 462 points needed and the vacation would only cost $4620, a $900 savings.

Am I missing something? Is my math right or wrong?

THANKS!

 

[I'mNoPrince]

Your math looks good the thing yo left out is that $5514 each week will go up a great deal in those 30 years.

Where Maint fees will go up just not nearly as much as room cost per night.

 

[mikesmom]

And you can't count on that rental information. The price per point could go up in a few years. It's already inching up from people who would be considered "reliable". In addition, some of the guidebooks are actually sending people to these Boards for rentals. That will mean more competition for those rentable points - and at any given time there arean't that many. At Easter, Christmas, etc there are darn few (Particularly WLV at Christmas) and they probably won't be $10/point. And (though this is a long shot) at any time DVC could prohibit us from renting points. Not real likely to happen, in my opinion, but they've already amde it more difficult and at each level of difficulty there will be more owners who decide it's not worth the hassle.

 

[DebIreland]

I like your math!

As well as what the other posters said, I'd like to add that renting instead of purchasing would give them no control over the reservation. I successfully rented points last year - I was very fortunate to find a great DVCer but it would be so much nicer to own the points and control the ressie myself! If I become a DVC memer and our reservation dates changed or (pending availabilty) we decided on a different resort, I would be in charge of those changes.

Also 10 a point is a bit optimistic. Yes, I know people do rent for that but it's quite common too for people to pay 11, 12 or 13.

Best of luck to them in their decision!

 

[LoveMyLAP-BAND]

The control was my concern as well. And at $12 per point it is the same as buying- without the control.

And I guess there are certain benefits to being an owner rather than just a renter.

I'll pass on the info to them! Thanks all!

 

[Dean]

IMO you need to include at least either the lost earnings on the payment OR the interest if financed. Unfortunately Xmas and easter are likely the worse times to compare since they are the most expensive points. But if they shortened to 5 or 6 nights avoiding weekends their savings goes up significantly. Also, they could likely do with less points than 231 for this plan. Off site timeshare would be MUCH cheaper since Orlando is so hard to trade into.

 

[Paging Tom Morrow]

An analysis that factors the loss of interest on money spent on DVC but doesn't pull out the yearly cost out of the same allotment of money is flawed in my opinion because a decision to buy DVC is a decision to make yearly (or bi-yearly) vacations using a certain allotment of your finances.

 

[MIDisFan]

I'm not found of calculating lost interest on the initial investment. The way I look at is that I would be using that money to take my vacations whether I used it to purchase DVC or book packages through CRO. So I would probably deplete that $20,000 in about 5-6 years with the cost of my average vacation. I may be looking at it all wrong though. I didn't agonize over my purchase as much as I probably should have, but I don't have any regrets.

 

[LoveMyLAP-BAND]

Oh, you guys brought up a point I didn't think about! (pulling out the money spent on each vacation) That's why I love you guys!

I am going to pass on the info to them, but it does seem like it could be a good thing for them. Plus, I think it would be cool to be part of the DVC community (an intangible benefit that just can't be calculated).

About buying a timeshare off-property: no way. They won't even stay at a moderate because "it's too far". They would never stay off property. But thanks for the idea. We're staying at a timeshare off property so it does work for some!