Am I wrong . . . DVC is a great deal right?

katandmouse

Mouseketeer
Joined
Apr 26, 2019
In reality, DVC is a discount program. You are paying a large upfront price plus an annual registration cost to get access to discounted accommodations for a set period of time.
I agree.

OP, I don’t think you’re necessarily wrong. We just bought in with similar intentions. I think the savings is there especially if you want to stay in the larger villas onsite (though partially that’s because Disney rack rates for those are exorbitant... like $1200/night for a 2br at BCV).
I made a couple assumptions when figuring our math:
—MFs have increased at a higher rate than inflation (about 3.4-3.65% average per year for BCV - though last year’s increase was much higher at 7.8%, and the max cap they can increase per year is 15% I think). However, I assumed that Disney’s cash room rates will also increase at a similarly inflated rate. Point rentals currently cost more than 2x annual dues, so I assumed that would continue as well.
—We have not invested in anything other than our savings account earning 1% and a CD earning 3%. Comparing against those numbers, DVC would save us money. However, now I am considering setting up an investment fund that we could pull money for vacations - we’ll still need to pay for tickets, food, travel costs, etc! Maybe this is a hedge against a hedge lol?
—Mousesavers has an Excel spreadsheet that compares your lifetime DVC costs to paying cash rates (rack and discount) vs renting points vs investing the money instead. I think it uses 3.2% inflation and 7% investment, but you can change the numbers to fit your situation.

DVC is not a great deal for everyone, but it can be for some if it fits your vacation style. It sounds like it fits yours.
 

kniquy

DIS Veteran
Joined
Dec 15, 2014
You would actually have much more than the $1,120. If your paying 56,000 for a 50 year contract, that 56,000 is worth zero at the end. So if you were to invest that money at 2% and pull out the cash to pay for your accommodations, you can actually pull out $1,782 per year which will leave you with zero at the end.
Unlike just about every other time share, DVC holds it value. Many don't count in the resale value of your DVC purchase. Will you really go the Disney for 50 years? Many if not all will 'burn out' after 25-30 years and, in my case can sell my original direct purchase for about 1.8 times what I paid. We have had 58 great trips so far, and will for a few years. But it's getting close to time to sell as I just can't do it too many more years, now that I'm in my mid 70's.
Considering most DVC owners will not own until the end - if you were to sell your contract after using it for 30 years it would still have 20 years left. In 30 years it could possibly sell for $100 per point (possibly even more). So a 300 point contract would return ~$30,000 - leaving what you have paid for your initial contract down to $26000. Granted your bigger cost is the MF, but to re-coupe some of your initial investment is something to factor in and you would have had 30 years of vacations.

I guess there are many ways to look at your DVC purchase and everyone will twist it to make it look positive. I look at it as forcing us to take a vacation, forcing my husband to get on a plane because if WDW wasn't on the other end of that flight I don't know if we would travel much for vacations.
 

CarolMN

DVC Co-Moderator
Moderator
Joined
Aug 18, 1999
When we purchased BWV (has a 2042 expiration date), I assumed:
  • that we would go to WDW at least one per year. (We've actually gone more than that, but a few years ago, settled into a pattern of going 3 times in two years).
  • that cash prices of on site resorts would increase at least as much as annual dues. (In fact, they have increased a lot more than that).
  • that DVC would give us more space and nicer accommodations than the values and moderates that we had been choosing and still "save" us some money. (Since we ended up going more often and sometimes treated family to DVC rooms, the "savings" part didn't necessarily hold true, LOL).
  • that we would probably want to sell / get out sometime in the 2030's. (If we do, base on current prices, we will probably be able to get at least most of the initial price back. Right now we could sell for $50-$60 PER POINT MORE than we initially paid).

I wouldn't buy in at today's prices(due mostly to sticker shock, LOL), but with the same assumptions, I think DVC could still end up to be a good deal for those who love staying on site at WDW and plan to do so often.
 
  • GoingSince1990

    Mouseketeer
    Joined
    Oct 31, 2018
    I worked in quantitative financial analysis for over 20 years and was blown away by what a good deal DVC is when I discovered it. I calculated that even if someone detested all things Disney, buying points and intending to only ever rent them out, while never staying in a resort, was an excellent investment under every plausible scenario. If not for the “no commercial activity” restrictions, all DVC points would be snapped up at current prices by investment banks and hedge funds.
     

    Mickey of the Villages

    Can't have nice things
    Joined
    May 6, 2019
    Here is the thing, though. You are in your late 40s and you bought a 50 YEAR contract. You really think it is likely that you will be going on yearly WDW vacations until you are almost 100 years old??? Probably not even remotely likely. At best, you probably have 15-20 years of annual trips, and that is being generous. You paid up front for 50 years, and are on the hook (or your kids are, if you transfer ownership to them) for 50 years as well. That's a big financial burden.
    Too true. I do not know what the future holds. My wife had cancer 2 years ago. There are no guarantees on how long any of us have. Still, I think it's old school to think that at 68 I won't want to go on annual trip even if it is just to watch my grandchildren (finger's crossed). My father retired from the telephone company at 67 and then worked at Target for a period
    Unlike just about every other time share, DVC holds it value. Many don't count in the resale value of your DVC purchase. Will you really go the Disney for 50 years? Many if not all will 'burn out' after 25-30 years and, in my case can sell my original direct purchase for about 1.8 times what I paid. We have had 58 great trips so far, and will for a few years. But it's getting close to time to sell as I just can't do it too many more years, now that I'm in my mid 70's.
    Bill, it looks like I'm about the same age you were when you bought at OKW. Good for you that you've had 58 trips and could nearly double your money if you sold your points. If I got 58 trips out of my DVC membership over 26 years it would mean that I had made some wonderful memories with my two sons (13 and 10) and hopefully some grandchildren one day. What a success story you are! Thank you for sharing your experience.
     

    Happyinwonerland

    DIS Veteran
    Joined
    Jul 1, 2014
    I think this is a terrific point that there are any number of ways to do this. However, one may say why spend $600 when you can stay at home for free?

    .
    I guess I feel like I get a superior experience for much less money by staying at WBC. The amenities are amazing, and Disney would really have to step up their game to ever make on site worth it to me.
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    Considering most DVC owners will not own until the end - if you were to sell your contract after using it for 30 years it would still have 20 years left. In 30 years it could possibly sell for $100 per point (possibly even more). So a 300 point contract would return ~$30,000 - leaving what you have paid for your initial contract down to $26000. Granted your bigger cost is the MF, but to re-coupe some of your initial investment is something to factor in and you would have had 30 years of vacations.
    Keep in mind, that $100 in 30 years is not the same amount as $100 today. Even if the price of your DVC does go up in nominal dollars doesn't mean it has in real dollars.

    Having said that, these contracts will likely be worth a lot less when you sell (plus commissions, and closing costs). Unlike normal real estate, there is a time limit on how long these contracts last for. Especially if buying resale or one of the older resorts, these will likely drop in value in a hurry as the end date approaches.
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    I worked in quantitative financial analysis for over 20 years and was blown away by what a good deal DVC is when I discovered it. I calculated that even if someone detested all things Disney, buying points and intending to only ever rent them out, while never staying in a resort, was an excellent investment under every plausible scenario. If not for the “no commercial activity” restrictions, all DVC points would be snapped up at current prices by investment banks and hedge funds.
    This starts with the major assumption that A) Disney World will continue to be this popular forever (or atleast the next 50 years), and B) Disney will continue to allow points to continue to be rented and C) The rental market continues to be as hot as it currently is.
     

    GoingSince1990

    Mouseketeer
    Joined
    Oct 31, 2018
    This starts with the major assumption that A) Disney World will continue to be this popular forever (or atleast the next 50 years), and B) Disney will continue to allow points to continue to be rented and C) The rental market continues to be as hot as it currently is.
    These assumptions are far more likely to pan out than many assumptions that investment professionals make every day when deciding whether to purchase equities, bonds, or alternative investments. To me, the chances of Disney becoming unpopular is similar to that of the US defaulting on its Treasury bonds. The ability to rent out points is legally enshrined in the Condominium Declaration. And as someone who rents extra points only through brokers, I was getting $11 per point 6 years ago when I started; this went up to $13, then $14.50 and is now $15. No investment is totally risk-free, but the case for buying DVC points is vastly more compelling than for most investments.
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    These assumptions are far more likely to pan out than many assumptions that investment professionals make every day when deciding whether to purchase equities, bonds, or alternative investments.
    I can go on a whole side tangent regarding this, but to keep things simple, I like to compare investments against the index benchmark. The index is a much safer long term play than DVC....

    To me, the chances of Disney becoming unpopular is similar to that of the US defaulting on its Treasury bonds. The ability to rent out points is legally enshrined in the Condominium Declaration. And as someone who rents extra points only through brokers, I was getting $11 per point 6 years ago when I started; this went up to $13, then $14.50 and is now $15. No investment is totally risk-free, but the case for buying DVC points is vastly more compelling than for most investments.
    If the ability to rent is in the condominium declaration then that is one big safe guard. However, using the pricing over the last 6 years (which have been some of the most lucrative for investment purposes in the past 150 years), as the basis that this trend will continue over the next 50 years is a dangerous assumption.
     

    Dean Marino

    DIS Veteran
    Joined
    Jun 3, 2015
    I may have mentioned in another thread that my wife and I bought DVC as an inflation hedge. That is, I buy the points today and in 30 years it costs the same number of points for a studio, 1Br, etc. (more or less) as it does now. Then the MBAs show up with models and graphs and say "not really because the maintenance fees eat you up." I'm not buying it. I admit that I am pretty dumb but I just don't buy it.

    Here's how I look at. Let's say I bought 300 points at CCV and I can use that annually for 7 nights in a 2Br. The cost to get a 2Br at CCV from Disney is (let's say) $1,500/nt. So I paid $56,400 for the CCV points (300 x $188) now and I get $10,500 in today's dollars of hotel rooms (7 x $1,500). Now, assuming you have (or can prudently borrow) $56,400 and that you go to WDW every year who cares about $2,250 in fees a year (300 x $7.50)?

    Again, I'm pretty dumb but it appears to me I break even pretty quick on this and keep banking for years to come. Plus there is some possibility I can sell this thing in the future and break even on the purchase (again just a possibility).

    One more thing I have to state. My wife and I don't want to go to Disney anymore and stay in a hotel room with our 2 boys. We want to go on vacation and for it to be at least as nice and comfortable as our house. We just don't "fit" anymore in the hotel rooms. Aside from the savings we bought DVC because we wanted the space and the comfort.

    Anyway, I'd be happy to hear other's thoughts. Don't wanna argue with folks but would like it if folks could point out things I'm missing since I may buy more of these things. :)
    First? CONGRATS for doing the hard research, for YOUR family, and vacation habits :). No two families are alike :).

    Now - general thought, based on banking & borrowing, is that someone needs to show up at LEAST every other year. Else? They will probably end up renting out points.

    Second - PRAYING that you did not Finance :(. No bank will finance you - and DVC "financing" is at Credit Card Rates :(.

    Now - just our situation? Retired Couple. Bought BRV in 2012. Added in 2019. All direct from Disney. CASH, to the tune of about $30K.
    Even with the add on? We hit Break even vs DISCOUNTED rooms in NOV 2019. Including all dues. 7 years.

    Our real CPN (Cost per night) for a Deluxe Studio is apx $125. Compare to $400 +, main WL Hotel. Dues inflation about 3%. Main Hotel inflation about 5%.

    Now - something to consider? We HAD that cash, in 2012, when the Interest Rates were about 1% on a good day. We used it, and time has shown us that, BECAUSE WE WERE GOING TO GO ANYWAY, we made the right choice :).

    But that's really the KEY to DVC: ARE YOU GOING TO GO ANYWAY? DVC is probably not all that good, for the family that goes to WDW once every 5 years :(.
    To boot? What about everything else? House, Cars, Children's Education? We only bought DVC with no Mortgage, no debt, and all 3 children through college.

    So - DVC COULD be a good deal, depending on YOUR situation. MY family is older. Debt free. As with all financial things? DVC should be considered along with everything else, in ones life :). It's a WANT, not a NEED.
     

    gdrj

    Boardwalk owner since 1999
    Joined
    Jan 13, 2012
    Doing this on the fly. After inputting all the data points into the NSA level computer system as well as consulting 14 mathematicians and members of the Federal Reserve and CEO’s of 3 banks, The answer is who cares.

    If its not causing you financial distress and it creates lifetime memories its the right decision. We purchase in 98 and bought an additional contract at the Poly. We have memories from when are kids were younger, now we have new memories with them as young adults enjoying Food & Wine with us. We have gifted trips for Grandparents and had great couple only long weekends.

    We went from roadside hotels, to 1 and 2 BR accommodations, never touching a car or dealing w I-4 or 192 traffic entering or exiting. Are there less expensive ways to vacation in Orlando, absolutely. Would I change anything? Only one thing, I would have purchased more sooner.
     

    chepic

    I tear up whenever I hear "Welcome Home."
    Joined
    Nov 28, 2006
    Doing this on the fly. After inputting all the data points into the NSA level computer system as well as consulting 14 mathematicians and members of the Federal Reserve and CEO’s of 3 banks, The answer is who cares.

    If its not causing you financial distress and it creates lifetime memories its the right decision. We purchase in 98 and bought an additional contract at the Poly. We have memories from when are kids were younger, now we have new memories with them as young adults enjoying Food & Wine with us. We have gifted trips for Grandparents and had great couple only long weekends.

    We went from roadside hotels, to 1 and 2 BR accommodations, never touching a car or dealing w I-4 or 192 traffic entering or exiting. Are there less expensive ways to vacation in Orlando, absolutely. Would I change anything? Only one thing, I would have purchased more sooner.

    Well said. I agree. One of the best purchases, I feel, we have ever made. Bought in 1997 and wish we had bought more points. Bought before kids, now our boys are in their teens and they have grown up on the Disney trips and ask to go every year. We have discussed the future of DVC with them and they say that they still want us to keep it. It is not about the money at this point, and like you said, if you can afford it and it brings you joy, then it is a good purchase!
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    Doing this on the fly. After inputting all the data points into the NSA level computer system as well as consulting 14 mathematicians and members of the Federal Reserve and CEO’s of 3 banks, The answer is who cares.

    If its not causing you financial distress and it creates lifetime memories its the right decision. We purchase in 98 and bought an additional contract at the Poly. We have memories from when are kids were younger, now we have new memories with them as young adults enjoying Food & Wine with us. We have gifted trips for Grandparents and had great couple only long weekends.

    We went from roadside hotels, to 1 and 2 BR accommodations, never touching a car or dealing w I-4 or 192 traffic entering or exiting. Are there less expensive ways to vacation in Orlando, absolutely. Would I change anything? Only one thing, I would have purchased more sooner.
    There are a lot of people on this board (including myself) who are just now becoming more familiar with DVC because of the new DVC show Pete is doing. I think it is important to illustrate the finances of DVC for prospective buyers. This is especially important because of what DVC truly is at it's core. DVC is not a product that gives you exclusive access to certain things on Disney property that the value can vary based on opinion. You can get pretty much everything DVC offers without owning. DVC is basically a discount program on accommodations. It's very nature is a financial incentive. Any calculation is based on assumptions of things that will happen in the future (which can vary based on opinion), but one day when you look back on it, there will be a definitive answer of whether DVC provided value or not in a particular circumstance. It will be a matter of fact, not opinion.

    You may love your new Toyota Corolla. It gets you anywhere you want to go, and before you bought it you were stuck taking the bus. If your suggesting somebody should go ahead and pay $200,000 for one though, that can be a bit irresponsible.
     
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    katandmouse

    Mouseketeer
    Joined
    Apr 26, 2019
    Doing this on the fly. After inputting all the data points into the NSA level computer system as well as consulting 14 mathematicians and members of the Federal Reserve and CEO’s of 3 banks, The answer is who cares.
    :rotfl2:

    There are a lot of people on this board (including myself) who are just now becoming more familiar with DVC because of the new DVC show Pete is doing. I think it is important to illustrate the finances of DVC for prospective buyers. This is especially important because of what DVC truly is at it's core. DVC is not an product that gives you exclusive access to certain things on Disney property. You can get pretty much everything DVC offers without owning. DVC is basically a discount program on accommodations. It's very nature is a financial incentive.

    You may love your new Toyota Corolla. It gets you anywhere you want to go, and before you bought it you were stuck taking the bus. If your suggesting somebody should go ahead and pay $200,000 for one though, that can be a bit irresponsible.
    This is a good point though, especially at today’s prices. If only I had a time machine...
     

    keishashadow

    Proud Redhead...yes, I have some bananas!
    Joined
    Dec 30, 2004
    Considering most DVC owners will not own until the end - if you were to sell your contract after using it for 30 years it would still have 20 years left. In 30 years it could possibly sell for $100 per point (possibly even more). So a 300 point contract would return ~$30,000 - leaving what you have paid for your initial contract down to $26000. Granted your bigger cost is the MF, but to re-coupe some of your initial investment is something to factor in and you would have had 30 years of vacations.
    I’m not so sure I agree with your statement ‘most DVC owners will not own until the end’.:confused3 The end representing end of contract or owner’s demise/barring possible passing it on to heirs in that event.

    Anybody that buys a TS with the primary expectation of it being a well-producing financial investment is gambling
     

    kniquy

    DIS Veteran
    Joined
    Dec 15, 2014
    I’m not so sure I agree with your statement ‘most DVC owners will not own until the end’.:confused3 The end representing end of contract or owner’s demise/barring possible passing it on to heirs in that event.
    Meaning to the end of the contract -- hence the robust resale market. Even if someone owned to their own end/death -- heirs may not want the financial commitment of DVC or may not have any interest in traveling to WDW - so they would sell off the contract. It would be interesting to know the percentage of those who bought in back in the beginning and how many still do own their contracts.

    Life happens - health or financial issues, wants, desires and vacation habits change and selling for a profit seems enticing -- just a few reasons why someone who bought a contract whether resale or even direct would sell. I don't think most people buy in thinking they will sell.

    I am in the process of closing on a contract - a couple bought Poly direct just in June of 2017 - looks like they took one trip- so here we are less than 2 years later and they are selling. Who knows why -- was it an impulse buy they no longer want, can they not afford the MF or loan payments any more. They probably didn't buy thinking they would sell.
     

    littlestar

    DIS Veteran
    Joined
    Jun 9, 2000
    As someone who prefers to stay offsite at WBC and pay $600 for a whole week in a 2 br condo at an amazing resort, I will never see the value in DVC.
    Do you own Wyndham points or rent from owners? I prefer to own because I like being in total control of my reservations. I own resale dirt cheap Wyndham points and DVC points bought long ago. If a person can be happy offsite, there are fantastic deals offsite (even better deals than what you are getting). I also own an every other year resale lock-off two bedroom timeshare that gives me access to Interval International cash Getaways. Just this last week I was able to book Sheraton Vistana 2 bedrooms for $207 for a week via an Interval International platinum special. And that deal was for fall break in October! Then we booked a few nights onsite with our DVC points (perfect combo).
     
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    DougEMG

    DIS Veteran
    Joined
    Aug 14, 2008
    As someone who prefers to stay offsite at WBC and pay $600 for a whole week in a 2 br condo at an amazing resort, I will never see the value in DVC.
    As someone who prefers to stay on-site in a deluxe resort, DVC is the one way to do that and save money.

    DVC is certainly not the cheapest option when visiting Orlando. I've stayed off-site, in values and in moderates. All of those were cheaper options than owning DVC and I enjoyed those trips just as much as I enjoy my trips now staying at DVC. It comes down to what you want and what you can afford. I want to stay on-site in a deluxe resort and I can finally afford to do that and owning DVC is the most economically way for me to do that over the long term (10+ years).
     

    E2ME2

    ET
    Joined
    Oct 17, 2011
    IMHO, as a professional financial analyst with a minor in mathematics, I think assessments like this have to also consider the qualitative factors, not just the quantitative ones.
    And, when it comes to math, one must specify if it's "New Math", "Statistics" (which is math of a different color altogether), or "DVC Math" ! :)
    Additionally, math that assumes future values is always subject to change, so I prefer historical math data, even though based on that history one could forecast some future estimates.
    Based strictly on the costs I have racked up to date, I bought in 2011, and have booked a total of 74 Nights at 5 DVC Resorts, in Studios, 1BR, 2BR, and 3BR-GV.
    Total Inception-to-date costs = $36,707
    $36,707 / 74 Nights = $496.04 per Night. This per night cost continues to go down, as a big part of the total-to-date was the purchase price.
    With a reasonable estimate of our future use, based on our historic 8 year trend, this will go down closer to $300/Night in another 8 years.
    Can't stay on Disney property with all the amenities, including MDE, on-site transportation, and magic hours benefits for $300/Night!
    Especially not those nights in the Grand Villa!
    So I am feeling very comfortable about this as a financial investment, and I'm ecstatic about it as an emotional investment in family vacations!
    Everyone has different needs and tolerances. For us, DVC is a winning proposition!
     

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