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

Mickey of the Villages

Can't have nice things
Joined
May 6, 2019
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. :)
 
When we did the math I didn’t value a 2bedroom cash room vs the dollar value of my points, instead I measured opportunity costs. We would have stayed in mods or value resorts so that’s how I compared. It still came out to be a good deal because we could stay at deluxe resorts and years down the line when those cash value and mod rooms go up, I’m still sitting pretty.
 
When we did the math I didn’t value a 2bedroom cash room vs the dollar value of my points, instead I measured opportunity costs. We would have stayed in mods or value resorts so that’s how I compared. It still came out to be a good deal because we could stay at deluxe resorts and years down the line when those cash value and mod rooms go up, I’m still sitting pretty.
I see your point and I think you've got a smart way to look at it. My wife and I talked about this method of valuing the transaction and we decided that since our boys are 13 and 10 and almost as big as we are that we needed to get more space. Plus we're in our late 40s and want to go and relax in the room. The resort is a big part of the attraction (maybe as big as the parks). So this tilted us toward the 2Br calculation. Thanks for responding.
 
You will pay FAR more in annual maintenance fees over the life of your contract than you will for your up-front investment.

You can't just ignore maintenance fees in your calculation. It doesn't take an MBA to believe in math. Now, that doesn't mean that DVC can't be a great deal, because it can... but if you don't take maintenance fees into account, your calculations are WAY off in terms of the value you're getting.
 


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. :)
You will get some people who look at only the $$ aspect of this type of purchase, they look at what that money could have done if put into an investment over 20-30 years instead - but then what? you don't take any vacations? Not realistic in my eyes. If you can afford it there will always be a vacation portion of your budget.

For my family of 5 we would not be able to afford the yearly or every other year cost to visit WDW and stay at a deluxe resort in at least a 1 BR. This is why we bought into DVC - our initial purchase is paid off so when we look at ownership for at least 30 years the initial purchase plus MF will certainly cost less than if we went direct through Disney.

We bought AK 120 points for $9600 in 2015- so divide that by 30 years (in case we do sell at some point) is $320 per year. Add in MF of ~$850 = ~$ 1170 per year is what we are paying for large, deluxe accommodations which would cost thousands. I think it is a great deal.

There is inflation which will affect both room costs as well as MF - I just presume they will increase an an equal rate, so we are always going to come out ahead.

Those financial experts will never factor in the emotional aspect, memories or experiences you have during your WDW vacation - those should play into the equation, but you can't put a price on family time. We could go and stay at a value or moderate resort and be ok but for about the same amount of money or slightly more we can go and splurge on our vacation. And the resort will definitely add to the enjoyment of the vacation.
 
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.

It's not really an inflation hedge because A) If you were to invest your buy in plus annual maintenance fees instead of buying into DVC (and pulling enough cash out annually or biannually to pay cash rates for the trip), you are losing out on potential growth (or in other words, inflation), and B) your maintenance fees will increase annually so in fact you are paying a reduced amount of inflation right there.

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)?

Over the 50 years of the contract, you are paying 56,400 (in today's dollars) plus $2,250 plus inflation every year. Lets say annual fees increase on average by 3% every year for 50 years, you are paying $310,000 in nominal dollars (or $200,000 in today's dollars assuming 2% avg annual inflation).

Over 50 years, you are getting the 2 BR villa in your example for a total of 350 nights (7 x 50). 200,000 / 350 = $571/night in today's dollars.

So despite the fact that your possibly misunderstanding how the numbers all work together, don't fear because it is still a good deal. Off the top of my head, I'm pretty sure 2 BR villas at CCV go for much more than $571/night.

Note: You can change some of the variables such as the inflation rate, or the increase in maintenance fees rate to come up with different numbers. At the end of the day, nobody really knows how it will all play out at the end. We can only make an educated guess.

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).

There is a possibility depending on when you sell that you can recoup your entire buy-in, plus more. There is also the possibility it will go down in value. There is even the possibility (fairly remote) that with future resale restrictions and the fact that many of the original contracts end after 2042, that at some point the annual fees may cost more than the cash price of staying at the resorts. This would actually make your points be worth negative dollars. Again, we can't predict this.

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.

Just keep in mind that you can always rent points or pay cash rates for these types of rooms. DVC purchase is not the only way to have access to more space on Disney property. DVC makes sense when you want that space in a deluxe resort and will be going regularly for a long time.

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.

Have Fun!
 
I think it is also important to include opportunity cost- if you were able to invest the $56,000 and get 2%, that would be an additional $1,120.

Edited to add more detail:

So if you don't have the points, you have $2,250 +$1,120 to spend every year on vacations. This is less than the $10,000 you are valuing the vacation at, but could be more if the dues go up or the investment return is higher.

So still a good deal, but not quite as good.
 


You will get some people who look at only the $$ aspect of this type of purchase, they look at what that money could have done if put into an investment over 20-30 years instead - but then what? you don't take any vacations? Not realistic in my eyes. If you can afford it there will always be a vacation portion of your budget.

I think your misunderstanding the argument. The idea would be to take all the money that you are paying into DVC (upfront costs, closing costs, maintenance fees, etc...) invest that money, and then every year or two pay for your accommodations in cash by pulling only the amount required for that reservation out of your investment.

This way, you still get the same product (accommodations at a Disney deluxe resort on some sort of regular basis). The only difference is that depending on what you think your investment will return, you may have left over money at the end. The other benefit is that your money is not tied up in Disney, which makes it a lot easier to get out if circumstances change.

Those financial experts will never factor in the emotional aspect, memories or experiences you have during your WDW vacation - those should play into the equation, but you can't put a price on family time. We could go and stay at a value or moderate resort and be ok but for about the same amount of money or slightly more we can go and splurge on our vacation. And the resort will definitely add to the enjoyment of the vacation.

The emotional aspect of going on vacation is definitely part of the equation. The one thing to remember is that when purchasing DVC, you are not buying a vacation. You are buying a recurring discount on future vacations for a price.

I think I've done the calculations every which way, and IMO DVC actually works out being a lot cheaper (even when investing) than renting points, or paying cash discounted rates for deluxe hotels. It is essentially a break even with moderates, and much more expensive than value resorts.
 
You will pay FAR more in annual maintenance fees over the life of your contract than you will for your up-front investment.

You can't just ignore maintenance fees in your calculation. It doesn't take an MBA to believe in math. Now, that doesn't mean that DVC can't be a great deal, because it can... but if you don't take maintenance fees into account, your calculations are WAY off in terms of the value you're getting.
Of course, and for the record I believe in math :) My only point is that the value is clear (at least for the foreseeable future). Whether I save a lot or some it is still a discount over paying full boat.
 
I think it is also important to include opportunity cost- if you were able to invest the $56,000 and get 2%, that would be an additional $1,120.

Edited to add more detail:

So if you don't have the points, you have $2,250 +$1,120 to spend every year on vacations. This is less than the $10,000 you are valuing the vacation at, but could be more if the dues go up or the investment return is higher.

So still a good deal, but not quite as good.

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.

You can also invest in something slightly more risky like a broad based index ETF (risk of the price fluctuating over time, but almost zero risk that you will lose money over the long-run), and get returns more in the 6 to 7% range. This would mean you would be able to pull out closer to $3750 every year.
 
Disney makes more money off of DVC than their regular hotel rooms. That's all you need to know to see that DVC is a geat deal....FOR DISNEY. It will cost the OWNERS much more over the life of a contract than they likely would ever spend on Disney accommodations in that same time period, for the vast majority of buyers. Otherwise, Disney wouldn't be pushing it so hard and constantly building new DVC properties. There would be no benefit to Disney if DVC was really "a good deal." It's a timeshare. An expensive one.
 
Disney makes more money off of DVC than their regular hotel rooms. That's all you need to know to see that DVC is a geat deal....FOR DISNEY. It will cost the OWNERS much more over the life of a contract than they likely would ever spend on Disney accommodations in that same time period, for the vast majority of buyers. Otherwise, Disney wouldn't be pushing it so hard and constantly building new DVC properties. There would be no benefit to Disney if DVC was really "a good deal." It's a timeshare. An expensive one.
You are likely right that it encourages people to spend more on their vacations than they may otherwise. We typically stay in a deluxe hotel and were facing the need to get two of them in order to go the way we wanted. It's also ok with me if it's a good deal for Disney. I recognize them as a juridical person taking care of their shareholders. But I believe it's also a good deal for me. The discount it affords is valuable to me. I presume everything Disney does is done with profit motive in mind, be it building new DVC properties or the Skyliner - what other motivation would they have? That doesn't mean that all of these things are not valuable to varying degrees to their customers. All God's children. Thank you for your reply!
 
You are likely right that it encourages people to spend more on their vacations than they may otherwise. We typically stay in a deluxe hotel and were facing the need to get two of them in order to go the way we wanted. It's also ok with me if it's a good deal for Disney. I recognize them as a juridical person taking care of their shareholders. But I believe it's also a good deal for me. The discount it affords is valuable to me. I presume everything Disney does is done with profit motive in mind, be it building new DVC properties or the Skyliner - what other motivation would they have? That doesn't mean that all of these things are not valuable to varying degrees to their customers. All God's children. Thank you for your reply!

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.
 
I don’t think it is a “great deal” if considered strictly in dollar value. It is much cheaper to stay at home and not go on Disney vacations. All that money could be invested in something that will make more money, but that is not the bottom line for my family.

Knowing that we have pre-paid rooms at Disney is comforting for us. That allowed me to extend a business trip by a couple of days with no additional housing cost. This summer we are using Disney as a home base for a road trip and not doing any park time. We are also in the early stage of planning a family reunion where we will be able to provide each family with a studio for a weekend (at our expense). We took our small family of 4 and spent a week in a Treehouse villa just because we could. We have seen two Christmases at Disney. We would never be able to do any of that is we were paying cash for each visit.

We don’t care that we are not maximizing our ability to make as much money as possible. We just want to live comfortably and be generous to our family when we can.
 
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.
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 don’t think it is a “great deal” if considered strictly in dollar value. It is much cheaper to stay at home and not go on Disney vacations. All that money could be invested in something that will make more money, but that is not the bottom line for my family.

Knowing that we have pre-paid rooms at Disney is comforting for us. That allowed me to extend a business trip by a couple of days with no additional housing cost. This summer we are using Disney as a home base for a road trip and not doing any park time. We are also in the early stage of planning a family reunion where we will be able to provide each family with a studio for a weekend (at our expense). We took our small family of 4 and spent a week in a Treehouse villa just because we could. We have seen two Christmases at Disney. We would never be able to do any of that is we were paying cash for each visit.

We don’t care that we are not maximizing our ability to make as much money as possible. We just want to live comfortably and be generous to our family when we can.
Amen.
 
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.
 
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.

There are many who will never consider staying offsite. WBC is truly one of the best kept secrets in that area. Find ourselves spending more time at the resort for the various pools than at DVC resorts in general. We have enjoyed renting there a handful of times, usually when fresh out of DVC points or no room at DVC It really does depend on the time of year and how close to arrival you book as to pricing when renting from owners. Lowest rate I could find for 3 nights weekend before 4th of July was $650 for a 1 BR. Still, it was over $100 less than cheapest WDW value when i priced the beginning of march this year.

OP - hate to say it but, if you have to look at buying DVC purely on financial merits, it’s a fail. Akin to all TS purchases even though most here hold Disney to a much higher standard than their counterparts.

There are some things in life you cannot easily put a value upon. Vacations & DVC purchases are not a need, they are a want. You either want it or not :). It’s the intangibles that tip the scale for most when deciding to buy DVC: more trips to the happy place in nice onsite lodgings, & perks such as AP discount for direct sales (which can change on a whim) to mention just a few popular reasons

Not sure what Ages your kids fall into but I suggest considering not using a @ BR as a baseline in your spread sheet calculations. Soon enough teens may rebel at the idea of visiting WDW (don’t worry, they tend to come back into the fold soon enough lol) or off to college without ability to do a family trip. You very well may find yourself staying in a 1 BR or our choice of accommodation - a studio. Nothing like a good value one to stretch your points :).
 
Last edited:
This is your original question:

... 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...

.... who cares about $2,250 in fees a year (300 x $7.50)?

This is your answer:

You will pay FAR more in annual maintenance fees over the life of your contract than you will for your up-front investment.

You can't just ignore maintenance fees in your calculation. It doesn't take an MBA to believe in math. Now, that doesn't mean that DVC can't be a great deal, because it can... but if you don't take maintenance fees into account, your calculations are WAY off in terms of the value you're getting.

That said, I owned DVC for several years and loved it. I certainly do not fault anyone for owning. As you said, there are non-tangible things that are definitely in the plus column.
 

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