Am I understanding DVC right?

[Boardwalk_bride]

I've been looking into whether it makes sense for us to buy a DVC. We used to go to WDW every 2-3 years, then had a child, and now pandemic, so less now. We would like to start going every 2-3 years again, but also want to travel other places. We always rent dvc points when we go.

Can someone review this example and tell me if my calculations are right?

I'm looking at a re-sale listing for $8741 total for AKV. PPP $155, 50 points (coming avail 2022), $8.24 pp dues, expires 2057.

Am I right that works out to being around $13.23/point (using this years dues @ 35 years plus full purchase price?

If this is the case, I'm wondering if we would actually make (a very small amount) money if we sold in years we didn't go? I read DVC is not an investment, so I'm not sure if I am right. Looking at DVC request, where I usually rent points, they would sell mine for $15.5 per point, so I could potentially make $113.5 if I needed to sell points?

Math is not my strong suit - appreciate anyone with a keen eye to let me know!

Thanks!

 

[RanDIZ]

Looks about right to me. But I always adjust for around a 4% dues increase over the life of the contract.

Depending on the time of year you go, you’d be around 100pts give or take for a week stay in a studio at AKV. Using your 2-3yr time frame, you’d have to bank and borrow if it’s over 100pts. Then just rent the rest out to put towards dues. If you’re lucky and can snag value studios, the trip would come in under 100pts and you’d only have to bank. But I would not go into DVC expecting to secure a value studio since it’s one of the hardest rooms to get. Hope this helps.

 

[Boardwalk_bride]

Looks about right to me. But I always adjust for around a 4% dues increase over the life of the contract.

Depending on the time of year you go, you’d be around 100pts give or take for a week stay in a studio at AKV. Using your 2-3yr time frame, you’d have to bank and borrow if it’s over 100pts. Then just rent the rest out to put towards dues. If you’re lucky and can snag value studios, the trip would come in under 100pts and you’d only have to bank. But I would not go into DVC expecting to secure a value studio since it’s one of the hardest rooms to get. Hope this helps.

Thanks for this. Is value the cheapest room? We’ve stayed at AKV 5 times, 4 (before children) with the animal view, and one (with a child) in the one bedroom animal view at Kidani. That was amazing but cost $$$, even with renting points. Would love to go back to that!

 

[CaptainAmerica]

Looks about right to me. But I always adjust for around a 4% dues increase over the life of the contract.

Depending on the time of year you go, you’d be around 100pts give or take for a week stay in a studio at AKV. Using your 2-3yr time frame, you’d have to bank and borrow if it’s over 100pts. Then just rent the rest out to put towards dues. If you’re lucky and can snag value studios, the trip would come in under 100pts and you’d only have to bank. But I would not go into DVC expecting to secure a value studio since it’s one of the hardest rooms to get. Hope this helps.

You also can't borrow the full slate right now, and no sign of if and when you'll be able to again.

 

[RanDIZ]

You also can't borrow the full slate right now, and no sign of if and when you'll be able to again.

I thought they removed the restriction??

 

[CaptainAmerica]

I thought they removed the restriction??

Only for certain things, like Galactic Starcruiser I believe.

 

[CarolynFH]

Thanks for this. Is value the cheapest room? We’ve stayed at AKV 5 times, 4 (before children) with the animal view, and one (with a child) in the one bedroom animal view at Kidani. That was amazing but cost $$$, even with renting points. Would love to go back to that!

I've linked the 2023 AKV points charts for you HERE, so you can see what the various size and view villas cost per night at different times of the year. That might be helpful in determining how a 50-point contract might work (or not) for your family, with banking and borrowing. Value villas are the least expensive, but there are very few of them and therefore they're difficult to book, so you shouldn't assume you'll book them regularly. Plan for a Standard view at minimum.

 

[CaptainAmerica]

I've linked the 2023 AKV points charts for you HERE, so you can see what the various size and view villas cost per night at different times of the year. That might be helpful in determining how a 50-point contract might work (or not) for your family, with banking and borrowing. Value villas are the least expensive, but there are very few of them and therefore they're difficult to book, so you shouldn't assume you'll book them regularly. Plan for a Standard view at minimum.

By "difficult to book," you mean "functionally impossible."

I bought an AKV contract for access to the value rooms, not realizing that walking months in advance is absolutely necessary to ever actually get them. I'm very likely going to sell and buy more SSR points instead.

 

[TheDailyMoo]

By "difficult to book," you mean "functionally impossible."

I bought an AKV contract for access to the value rooms, not realizing that walking months in advance is absolutely necessary to ever actually get them. I'm very likely going to sell and buy more SSR points instead.

Is that hyperbole or do people really walk a reservation for months. Not a DVC owner but I know of the practice and that seems crazy to me.

 

[MICKIMINI]

1996 DVC veteran. Congrats on deciding to buy into DVC!

Owning DVC or any timeshare has some risks and one is not using points you paid for. Banking or borrowing (now 50%) to go every other year is doable but three is a stretch IMO. Buying less points is worse IMO than buying too many.

Firstly, the contract you are looking at is priced too high and I can say from recent experience as I have (2) 40 point AKV's in ROFR right now at $140 PP starting with 2022 points.

Closing costs are prohibitively expensive on 50 point or less contracts. A closing at $500 it is still $10 PP. 75 or higher is better proportionally.

If you are only buying one contract EVER, I guess it doesn't matter much, but I like to get as much as possible for the money so this is my strategy.

My suggestion is to try to find a slightly larger contract than 50 points which will be less PP and closing proportionally less PP. Finding a fully loaded contract is another way to cut your costs. You only get to use those points once, however it is free money IMO. I'll give you an example of another contract in ROFR right now:

95 VBR with 95 2021, 190 2022 and 95 2023 for $75 PP and it is in ROFR right now. (I'm willing to pay more PP for MF's and run it out to 2042.) I will rent the expiring points, use the current points (total 190 "free" points) and bank the 2022 points. I think my total with closing was about $8900, minus about $1500 to rent and value of at least $1100 for current points which reduces my buy in to $6300 including one year MF's. Actually, net is really about $5200 for just the contract. $1100 or so per year to "use" the points. A week in a studio every year for 20 years for about $160+ per night with only $5300 out of pocket.

I would suggest starting with 100 points (easy for math) at AKV and doing the math on a contract at your desired price point and figure out what getting a loaded contract does to your math. You can potentially buy 25-50 additional points (more than your 50 point example), use or rent your "free" points (worth $11-18 each) and deduct the total from your buy in.

This is just a quick calculation and not meant to be the end all. Practice your math with several variations of prices and contract sizes and be ready to be the first bidder on your desired contract. Being first in (even with a lower offer) raises your chances of winning a bid and worked on most of my resales. Having your options spelled out on paper prevents you from second guessing yourself and losing out to another bidder by not acting immediately. Good luck in finding that perfect contract!

 

[Sandisw]

Is that hyperbole or do people really walk a reservation for months. Not a DVC owner but I know of the practice and that seems crazy to me.

For certain rooms they do. But honestly, AkV value and CL rooms are so popular that even without some people walking, there are not enough rooms given how many want them.

 

[Boardwalk_bride]

1996 DVC veteran. Congrats on deciding to buy into DVC!

Owning DVC or any timeshare has some risks and one is not using points you paid for. Banking or borrowing (now 50%) to go every other year is doable but three is a stretch IMO. Buying less points is worse IMO than buying too many.

Firstly, the contract you are looking at is priced too high and I can say from recent experience as I have (2) 40 point AKV's in ROFR right now at $140 PP starting with 2022 points.

Closing costs are prohibitively expensive on 50 point or less contracts. A closing at $500 it is still $10 PP. 75 or higher is better proportionally.

If you are only buying one contract EVER, I guess it doesn't matter much, but I like to get as much as possible for the money so this is my strategy.

My suggestion is to try to find a slightly larger contract than 50 points which will be less PP and closing proportionally less PP. Finding a fully loaded contract is another way to cut your costs. You only get to use those points once, however it is free money IMO. I'll give you an example of another contract in ROFR right now:

95 VBR with 95 2021, 190 2022 and 95 2023 for $75 PP and it is in ROFR right now. (I'm willing to pay more PP for MF's and run it out to 2042.) I will rent the expiring points, use the current points (total 190 "free" points) and bank the 2022 points. I think my total with closing was about $8900, minus about $1500 to rent and value of at least $1100 for current points which reduces my buy in to $6300 including one year MF's. Actually, net is really about $5200 for just the contract. $1100 or so per year to "use" the points. A week in a studio every year for 20 years for about $160+ per night with only $5300 out of pocket.

I would suggest starting with 100 points (easy for math) at AKV and doing the math on a contract at your desired price point and figure out what getting a loaded contract does to your math. You can buy potentially buy 25-50 additional points (more than your 50 point example), use or rent your "free" points (worth $11-18 each) and deduct the total from your buy in.

This is just a quick calculation and not meant to be the end all. Practice your math with several variations of prices and contract sizes and be ready to be the first bidder on your desired contract. Being first in (even with a lower offer) raises your chances of winning a bid and worked on most of my resales. Having your options spelled out on paper prevents you from second guessing yourself and losing out to another bidder by not acting immediately. Good luck in finding that perfect contract!

Thanks this is super helpful. I was really just looking at the one listing as an example - I’ll make sure to shop around. I was reading Poly is the best value, but I’ve never stayed there (although eaten there a lot). I’ll probably end up with AKV, if we decide the purchase. Every time we got to WDW we always say we will stay somewhere else - but end up back there. Just love the theming, animals and food!

 

[BruinEd03]

I've been looking into whether it makes sense for us to buy a DVC. We used to go to WDW every 2-3 years, then had a child, and now pandemic, so less now. We would like to start going every 2-3 years again, but also want to travel other places. We always rent dvc points when we go.

Can someone review this example and tell me if my calculations are right?

I'm looking at a re-sale listing for $8741 total for AKV. PPP $155, 50 points (coming avail 2022), $8.24 pp dues, expires 2057.

Am I right that works out to being around $13.23/point (using this years dues @ 35 years plus full purchase price?

If this is the case, I'm wondering if we would actually make (a very small amount) money if we sold in years we didn't go? I read DVC is not an investment, so I'm not sure if I am right. Looking at DVC request, where I usually rent points, they would sell mine for $15.5 per point, so I could potentially make $113.5 if I needed to sell points?

Math is not my strong suit - appreciate anyone with a keen eye to let me know!

Thanks!

Don’t forget that you will also have to pay taxes on any rental revenue.

 

[Boardwalk_bride]

Don’t forget that you will also have to pay taxes on any rental revenue.

Oh shoot, thanks. I’ll have to figure out how that works for foreign rental (I’m in Canada).

 

[Ssplashhmtn]

I've been looking into whether it makes sense for us to buy a DVC. We used to go to WDW every 2-3 years, then had a child, and now pandemic, so less now. We would like to start going every 2-3 years again, but also want to travel other places. We always rent dvc points when we go.

Can someone review this example and tell me if my calculations are right?

I'm looking at a re-sale listing for $8741 total for AKV. PPP $155, 50 points (coming avail 2022), $8.24 pp dues, expires 2057.

Am I right that works out to being around $13.23/point (using this years dues @ 35 years plus full purchase price?

If this is the case, I'm wondering if we would actually make (a very small amount) money if we sold in years we didn't go? I read DVC is not an investment, so I'm not sure if I am right. Looking at DVC request, where I usually rent points, they would sell mine for $15.5 per point, so I could potentially make $113.5 if I needed to sell points?

Math is not my strong suit - appreciate anyone with a keen eye to let me know!

Thanks!

Yes: You are thinking of it the right way. It’s exactly as you described it, and not tricky to execute.

 

[RoseGold]

I wouldn't buy a timeshare to go every two-three years. I'd just stay at Swolphin or rent points. I'd argue renting other people's points is the smart math decision in many cases. If 2020 has shown us anything, it's that this is risk.

I'd never buy a 50 point contract at all because of the higher PP cost and the closing. All of that flips the math.

And don't forget when you sell, you are required to deal with the IRS and to pay tax on the gain. And if you rent, you are running a business in another country, which you need to pay taxes on correctly. There are many reasons for foreign nationals might want to completely avoid the IRS if it's not neccesary.

 

[CarolMN]

I've been looking into whether it makes sense for us to buy a DVC. We used to go to WDW every 2-3 years, then had a child, and now pandemic, so less now. We would like to start going every 2-3 years again, but also want to travel other places. We always rent dvc points when we go.

Given what you've said your plans are, I have to agree with @RoseGold. Were I in your situation, I'd continue to rent (or pay cash) and avoid the hassles that will come with an every other or every third year. RoseGold also makes some good points about the 50 point level contract and the complications of selling if you are not a U S citizen.

 

[RoseGold]

And, when you die, your estate has to hire a lawyer in Florida to properly probate your international property interests in Florida courts. This seems like a lot of hassle for a couple nights in a hotel every few years.

 

[Marionnette]

I've been looking into whether it makes sense for us to buy a DVC. We used to go to WDW every 2-3 years, then had a child, and now pandemic, so less now. We would like to start going every 2-3 years again, but also want to travel other places. We always rent dvc points when we go.

Can someone review this example and tell me if my calculations are right?

I'm looking at a re-sale listing for $8741 total for AKV. PPP $155, 50 points (coming avail 2022), $8.24 pp dues, expires 2057.

Am I right that works out to being around $13.23/point (using this years dues @ 35 years plus full purchase price?

If this is the case, I'm wondering if we would actually make (a very small amount) money if we sold in years we didn't go? I read DVC is not an investment, so I'm not sure if I am right. Looking at DVC request, where I usually rent points, they would sell mine for $15.5 per point, so I could potentially make $113.5 if I needed to sell points?

Math is not my strong suit - appreciate anyone with a keen eye to let me know!

Thanks!

I'll echo others.

Check the points charts. Don't expect to be able to book value studios.

Fifty points is a nice add-on contract. It really doesn't get you many nights.

You're better off renting instead of purchasing if you will travel every 3 years. 50% borrowing restrictions work against this plan.

Buy AKV if you love AKV. Don't buy AKV expecting to book BWV standard view studios or other resorts with low-point studios.

Renting 50 points will be difficult because they don't get you many nights. The brokers want at least 100 points, which is 2 years of a 50-point contract. And what they pay you is not profitable once you consider your buy-in cost, dues and the taxes on your rental income. You will probably break even now or take a slight loss in the future. Reimbursement for rentals has not kept pace with the rising cost of owning DVC.

$155 per point is pretty high for AKV. It's because the contract is small. I would be inclined to wait, save up and purchase a 100-point contract for a lower per point cost and the same closing costs. Or continue renting without the hassle of 11- or 7-month booking windows at 8 AM, walking resevations, paying dues during a year that you are skipping Disney and seeking renters for your excess points.

 

[Boardwalk_bride]

This is all very helpful - thanks everyone. I think we will take longer to think about it - and maybe I can hop onto the Canadian forum to ask some questions. I love the idea of going to WDW every 2 years, but just don't see it happening, especially now that we have a school aged kid it makes finding time to go a bit more challenging, along with wanting to keep going back to Europe + other places in Canada and the US.

I'll park the idea for now.