Analyzing best value

[cfw213]

Hi all. I am an accountant, and love statistics, FP&A, and data I am considering adding on to our 160 point SSR contract (which I got for $66 a point in 2010 ) and have been coming up with spreadsheets and formulas to calculate the best value across the board - based on resort and when comparing contract to contract. Stop me if this already exists. I want to put this all into a workbook, and would be happy to share if others are interested. I make decisions based on logic vs. emotion and I am sure there are others like me!

Here is where I am, and I'd love some additional input on factors that you consider when buying a contract. Obviously, this can't take into account personal preferences which have intrinsic value - this is purely from a monetary standpoint.

Data I have/considerations:
Average selling price for all WDW resort contacts (excluding Riviera, because no one should be buying that resale) for May - July 2023; will update as additional data becomes available
Premium on small point contracts (what do we consider "small"? I estimated a $10-$25 ppt premium on contracts 60 points and less)
Dues per year
Years remaining on contracts
Rental value (based on Dave's rentals)
Loaded vs. stripped contracts

• I am not considering inflation - assuming that all resorts will "inflate" at the same rate
• I am not comparing this to whether or not DVC is a good value as opposed to hotel rooms/rack rates - just comparing one contract to another

Results
I'd like the output to determine good/average/poor value on a contract as compared to other comparable contracts, and best overall value. I think I have determined that the monorail resorts actually offer the lowest per point cost based on their selling prices, dues, and rental demand, but I'd love to hear some additional input!

 

[Sandisw]

I think you have most of the figures people who this deep of an analysis use.

We didn’t go thjs deep when buying so I can’t offer any other insight on that.

But, we did buy RIV resale because it’s where we want to stay and worth the price. I do think it’s too early though to use it’s data since it’s still being sold direct with decent incentives.

 

[Galactic Reversal]

Hi all. I am an accountant, and love statistics, FP&A, and data I am considering adding on to our 160 point SSR contract (which I got for $66 a point in 2010 ) and have been coming up with spreadsheets and formulas to calculate the best value across the board - based on resort and when comparing contract to contract. Stop me if this already exists. I want to put this all into a workbook, and would be happy to share if others are interested. I make decisions based on logic vs. emotion and I am sure there are others like me!

Here is where I am, and I'd love some additional input on factors that you consider when buying a contract. Obviously, this can't take into account personal preferences which have intrinsic value - this is purely from a monetary standpoint.

Data I have/considerations:
Average selling price for all WDW resort contacts (excluding Riviera, because no one should be buying that resale) for May - July 2023; will update as additional data becomes available
Premium on small point contracts (what do we consider "small"? I estimated a $10-$25 ppt premium on contracts 60 points and less)
Dues per year
Years remaining on contracts
Rental value (based on Dave's rentals)
Loaded vs. stripped contracts

• I am not considering inflation - assuming that all resorts will "inflate" at the same rate
• I am not comparing this to whether or not DVC is a good value as opposed to hotel rooms/rack rates - just comparing one contract to another

Results
I'd like the output to determine good/average/poor value on a contract as compared to other comparable contracts, and best overall value. I think I have determined that the monorail resorts actually offer the lowest per point cost based on their selling prices, dues, and rental demand, but I'd love to hear some additional input!

I love me some spreadsheets, I had one I used to compare present values of contracts when buying. Check out www.dvcrofr.com for some data to help with your financial analysis and let me know if there's anything I can provide to help. I set up a pricing tool that takes into account some of the items you've outlined. I plan to add something to help people with their TVM calculations and projections, but haven't gotten to it yet. Excited to see what you come up with!

 

[emchen]

What a great project!

Premium on small point contracts (what do we consider "small"? I estimated a $10-$25 ppt premium on contracts 60 points and less)

I personally consider 75 or lower. It is as arbitrary as the next owner but one doesn’t see many 60 pt contracts. The next most common “small” contract above 50 is 75.

 

[tom1944]

I think Riviera is worth including.

 

[kneely58]

I think I have determined that the monorail resorts actually offer the lowest per point cost based on their selling prices, dues, and rental demand, but I'd love to hear some additional input!

That is what I determined too, but didn't go as deep and used pricing from the ROFR thread. I subsequently found out more about subsidized Aulani contracts though and now I think those work out to be the best deal if you're not factoring in home resort priority.

 

[emchen]

• 9x 150pt contracts
• 9x 50pt contracts
• 8x 200pt contracts
• 5x 75pt contracts
• 5x 250pt contracts
• 14x other contracts

From VDH Sales Tracker by @ehh.

 

[SheSingsAlong]

I'm not sure if it is possible to incorporate, but the point charts are different for old vs. newer resorts and that can make a meaningful difference in how much a set of points can get you. Like, OKW point chart is obviously amazing and Riv chart is very hard for someone like me to swallow.

 

[intamin]

I think Riviera resale can be a good deal if it's a small contract.

Something that may be considered is average cost of a room type at a home resort based on the point charts. Boardwalk and Beach Club are still going at a premium but those point charts are among the best, especially those standard studios at BWV.

I'm not sure if it is possible to incorporate, but the point charts are different for old vs. newer resorts and that can make a meaningful difference in how much a set of points can get you. Like, OKW point chart is obviously amazing and Riv chart is very hard for someone like me to swallow.

You beat me to it as I was writing this comment LOL. People bought VGF because it was an amazing deal but also those point charts are the worst on property. Fortunately they work well as SAP but also 150 points at VGF doesn't go far. RIV's is just under VGF's so I can't talk too much but we prefer being near Epcot and the 2042 expiration was a no go for us for BWV/BCV otherwise I would've definitely been considering there.

 

[Ruttangel]

I'm not sure if it is possible to incorporate, but the point charts are different for old vs. newer resorts and that can make a meaningful difference in how much a set of points can get you. Like, OKW point chart is obviously amazing and Riv chart is very hard for someone like me to swallow.

I have some detailed information on average cost per night across the whole point chart, just go to the Table tab and then you can update with any values you want (need updating anyway)

DVC WDW Point Charts_2023 costv2

 

[zavandor]

How have you accounted for resorts having a different number of years remaining?

 

[happythoughts & pixiedust]

I think you should include resale RIV in your analysis. Large stripped contracts can be had for under $120/pt. and loaded contracts are pretty easy to get under $130. Based on its many years remaining and low upfront cost, resale Riviera points are arguably the cheapest to own right now. For people who love Riviera and plan to use their points there exclusively, resale can be a great deal. Rental demand for Riv points is also good. Also, if someone wants to stay at Riv, they won't be able to if they buy anything but Riv resale.

Based on Spring 2023 data here is my ranking from a similar Present Value analysis. Looking forward to see how yours comes out.

Ranked from lowest cost to own per point (assumes contract is held to expiration). My rank compared with DVC Resale Market's Spring 2023 ranking.

My rank // (DVC Resale Rank)
1. Riviera // (Grand Floridian)
2. Saratoga Springs // (Riviera)
3. Aulani // (Saratoga Springs)
4. Grand Floridian // (Copper Creek)
5. Copper Creek // (Polynesian)
6. Polynesian // (Bay Lake Tower)
7. Bay Lake Tower // (Aulani)
8. Animal Kingdom // (Animal Kingdom)
9. Hilton Head // (Old Key West)
10. Old Key West // (Boulder Ridge)
11. Boulder Ridge // (Hilton Head)
12. Vero Beach // (Grand Californian)
13. Boardwalk // (Boardwalk)
14. Beach Club // (Vero Beach)
15. Disneyland Hotel (Direct only) // (not ranked)
16. Grand Californian // Beach Club

For what it's worth, there's only a 10% difference in cost per point between #1 and #8. You'll also notice that my 1-8 rankings include all the same resorts as DVC Resale Market's 1-8 rankings. And between #3 and #7 there's only a 3% difference in cost per point. Depending on how the monthly data fluctuates, I find #3 thru #8 switch places fairly frequently because the cost to own them is so close.

#9-#16 are much more expensive than 1-8. As noted the difference between 1 and 8 is only 10%, yet the difference in cost between #8 and #9 alone is ~12% in my analysis. The difference between #1 and #16 is a whopping 60%. The big jump in cost to own comes mostly as a result of the shorter 2042 contract expiration. Disneyland Hotel and Grand Californian are at the bottom of the list because of the very high upfront cost.

My rankings differ slightly from DVC Resale market because I take inflation of dues and cost of capital into consideration, assuming a fairly high discount rate of 6.75%. That's why Disneyland Hotel and Grand Californian fare far worse in my analysis - the upfront cost is very high and the DVC Resale market rankings don't factor in cost of capital.

The only thing you can definitively say is 1-8 are the "affordable" options and 9-16 are the "expensive" options.

The wild card that's not factored into the analysis is whether someone will resell their contract before expiration (very likely) and which resorts will appreciate the fastest. Because that is unknowable, and the "cost per point" for 1-8 is so close, I think any of the resorts in the 1-8 rank (RR, SSR, AUL, VGF, CCV, PVB, BLT, AKV) have an equal chance of "coming out on top." Though if I was betting on the Trifecta, I'd pick 1. Grand Floridian 2. Copper Creek 3. Polynesian (but I think Poly Tower will be same association. For those who think Poly Tower will be separate I'd go 1. Grand Floridian 2. Copper Creek 3. Bay Lake Tower

 

[Mirabell Rose]

I did a spreadsheet workbook with your data points and added calculations like the value of the additional years versus rental, etc. for the available contracts. I agree with you that the actual cost between the total of the initial buy and dues over the long term is not all that different between resorts. (I used low end of current resales sold not list prices)

After doing all that I realized I really didn’t want a different use year and so what was available for my use year at the point total I wanted at the bottom of the price range drove me to the decision amongst my 3 favorite resorts. So was the spreadsheet workbook a wasted exercise? Of course not. What could be more fun than doing spreadsheets? Yes, a
spreadsheet of Disney data!

 

[RoseGold]

Obviously the piece you are missing is loss of return in the market. Even conservative market assumptions will demolish current math for pricier contracts, buy in is just so high.

This matters when SSR is in the 90s and resale VGF1 is in in the 150s. That's a massive difference in buy in.

 

[happythoughts & pixiedust]

Obviously the piece you are missing is loss of return in the market. Even conservative market assumptions will demolish current math for pricier contracts, buy in is just so high.

This matters when SSR is in the 90s and resale VGF1 is in in the 150s. That's a massive difference in buy in.

Correct. This is why Grand Californian fares better in DVC Resale Market's "back of the napkin" analysis (#12 vs. dead last in my analysis). And also why I rank VGF #4 vs. #1 DVC Resale Market. The DVC Resale market analysis simply divides the cost of the upfront contract over time without taking into account the opportunity cost of that capital.

Even though Grand Cal basically costs the same to own as rent, I still think there's value in owning any and all of these contracts. Even if the cost is equal to renting, ownership gives you the control.

The fact that Beach Club, Boardwalk, and Grand Cal have appreciated so well as their remaining contract years dwindle shows there is great opportunity for certain resorts to outperform others that are cheaper on a per point "held to expiration" basis.

I think the California properties will continue to appreciate the best due to location, limited supply, future park expansion, and the unlikelihood that there will be significant additional supply built. If VDH appreciates like Grand Cal did, you could buy it direct today and use it for SAP and it'd end up being far cheaper in the long run than the cheapest SSR resale contract, which is why I've always liked your VDH as SAP argument.

 

[RoseGold]

If VDH appreciates like Grand Cal did, you could buy it direct today and use it for SAP and it'd end up being far cheaper in the long run than the cheapest SSR resale contract, which is why I've always liked your VDH as SAP argument.

What can I say, I've always cared about the math. LOL.

I'd be a fifth class RIV resale buyer if the math made sense.

Obviously, VDH can't hold up in short-ish run scenarios with opportunity cost against resale SSR - and appreciation matching VGC is pretty much impossible. But in longer direct scenarios, it would still be my pick for direct, as someone who will likely never go to DL at all.

 

[Jwaire]

Opportunity cost only matters if you're going to take the opportunity. For many people, they aren't going to invest the $35,000+ they would spend on a DVC in an ETF or mutual fund.

It's going to other vacations, an upside down car trade, non-essential home remodeling, etc.

If you're concerned about contract resale value, I wonder if the list changes? Say you only want to own 20 years, while your kids are kids, what contract order works for that scenario?

Obviously, we can't predict the future but there's definitely some trend information there. CCV? PVB? Some of these resorts with longer contracts, yet they have a track history of continuing to maintain their relative buy-in value.

 

[Jwaire]

Obviously, VDH can't hold up in short-ish run scenarios with opportunity cost against resale SSR - and appreciation matching VGC is pretty much impossible. But in longer direct scenarios, it would still be my pick for direct, as someone who will likely never go to DL at all.

And I'd say wait for Poly Tower because of the higher risk of dues rising at VDH because you know California and the lack of rentability demand because of the transient tax.

There are so many factors, but I don't think we stress enough around here to buy when the resort goes on sale (even better pre-sale) to maximize contract value. You start chipping away at that contract length, it can make all the difference in the world—especially with direct.

 

[intamin]

Opportunity cost only matters if you're going to take the opportunity. For many people, they aren't going to invest the $35,000+ they would spend on a DVC in an ETF or mutual fund.

It's going to other vacations, an upside down car trade, non-essential home remodeling, etc.

This is me lol I'm blowing it on Disney trips and cruises anyways

 

[tom1944]

Opportunity cost only matters if you're going to take the opportunity. For many people, they aren't going to invest the $35,000+ they would spend on a DVC in an ETF or mutual fund.

It's going to other vacations, an upside down car trade, non-essential home remodeling, etc.

If you're concerned about contract resale value, I wonder if the list changes? Say you only want to own 20 years, while your kids are kids, what contract order works for that scenario?

Obviously, we can't predict the future but there's definitely some trend information there. CCV? PVB? Some of these resorts with longer contracts, yet they have a track history of continuing to maintain their relative buy-in value.

I was going to buy a pontoon boat so the only opportunity cost I missed out on was spending more money on my retirement present to myself.