Annual Maintenence Fees

[gtrist4life]

Does anyone have history of the annual maintenence fees?

I'm looking for what the trend of increases/decreases
are.

I'm researching/revisiting becoming a DVC member, but looking for where the costs breakout.

$12,000 minimum (if bought new, not resale)
Annual fees $400-500 a year (I don't have the brochure info anymore)

I understand that the annual fees have a max increase cap of 10%, if this happened every year (highly doubtful?) then you have the following annual fee schedule
1 $ 450
2 $ 495
3 $ 545
4 $ 599
5 $ 659
6 $ 725
7 $ 797
8 $ 877
9 $ 965
10 $ 1,061
11 $ 1,167
12 $ 1,284
13 $ 1,412
14 $ 1,554
15 $ 1,709
16 $ 1,880
17 $ 2,068
18 $ 2,275
19 $ 2,502
20 $ 2,752
21 $ 3,027
22 $ 3,330
23 $ 3,663
24 $ 4,029
25 $ 4,432
26 $ 4,876
27 $ 5,363
28 $ 5,899
29 $ 6,489
30 $ 7,138
31 $ 7,852
32 $ 8,637
33 $ 9,501
34 $ 10,451
35 $ 11,496
36 $ 12,646
37 $ 13,911
38 $ 15,302
39 $ 16,832
TOTAL $180,652 for annual fees


I know this is worst case, but bear with me.
So 180.6K plus 12K and you're in for $192,600 over 39 years (as it expires in 2042)

Take this and say 6 nights for 39 years and you have 234 nights
$192,600/234 = $823 a night for lodging.

Hopefully the annual increases have not maxed out every year and I'm sure that inflation plays a part, (don't know what historical lodging costs trends have been). Have heard the statement that it pays for itself after 6-7 years

Please help me to see this purchase in a more positive light from a cost perspective. I'm sold on the content, and ability to stay at other places ( but that subject to availablilty has me concerned )

If we do purchase it will probably be next year sometime.

Sorry for the long post and if there are other links to this info, I'd appreciate the directions.

Peace
GH4L

 

[sparkspeak]

The annual fees will different for each resort, but here's a link to the history of OKW fees (the oldest DVC.)
http://www.disboards.com/showthread.php?s=&threadid=177227

 

[vbfamily]

I believe the cap for annual dues is actually 15%. I'm sure someone will correct me if I am wrong but I do think it's 15%.

 

[Jimbo]

Actually, per Florida law, the maintenance is capped at 15%, not 10%. So year 39 <i>could</i> be $91,144 instead of $16,832!

But not to worry... maintenance fees have historically gone up in the 3% range. And there's over 10 years of history to back this number up. In fact, they've been flat or gone down for three years, before going up ~ 8% this year, primarily due to insurance increases. Someone here will - or already has - posted the exact numbers.

The important thing to remember is that this money can <u>only</u> be used for maintenance. It's not profit to Disney or DVD, it's money that is put back into the resorts. So the increases will always mirror the costs, just like at the condo I live in. And once a resort gets past its original shakeout phase, Disney has shown that they know how to control costs.

 

[Caskbill]

Keep in mind that dues are a non-profit item, meaning DVC can't charge any more than their true actual costs for running the resort. And unless they plan on giving the maids a 10% annual raise, and the costs of all the goods they purchase for the resort rise 10% every year, and so on, then you'll never see 10%, at least not as a regular annual increase.

If you want to compare apples to apples, consider a regular hotel room. If today it's $180 plus tax (199.80) per night, and it raises 10% a year for 39 years, then that last year the hotel room is up to $7406.06 plus tax, or $8220.72 / night.

So comparing that rate, your year 2042 hotel room, 6-nights lodging will be $49,324.35 which is still considerably more than your DVC 6-night stay for dues of only $16,832.00

Making long term compounded calculations will always yield numbers that seem scary. But 40 years ago, someone making $80K / year would have been very, very rich. Today it's much different. Our concept of $80,000 has changed. Everything is relative. If your salary in the year 1898 was $500/year, were you rich, poor, or in between. The only way to know is to compare that number to the prices of all the goods and services back then.

Likewise, today, if you got a pay increase of 10% / year, then in 39 years your $80K/year salary would be $3.3 MILLION / year, so again the $16,832 annual dues for that last year are small. Again, everything is relative.

In all reality you'll probably see dues increase at about the inflation rate, and if your salary follows inflation, and hotel rates follow inflation, then every year, your dues will remain about the same percent of your current salary.

While the numbers may seem to get pretty big, compared to everything else, everything will stay relatively the same.

OR even be less. OKW dues have gone up about 29% since 1993. How much have hotel rates gone up since 1993? Maybe someone will have an actual figure, but if I guess a hotel room at WDW in 1993 was $79/night, and today it's $180/night, then that's an increase of 128%. This makes DVC look very good.

Again, everything is relative, and DVC is going to continue to be a much better value than regular hotel rates, year after year.

If you really want to see scary numbers, consider Jimbo's post that at 15%/ year increases, we'd be up to $91,144 a year in dues. Well use 15% for our $180 hotel night and it's up to $41,926/night or $251,558 for the week.

But don't worry, your typical $80K/year salary would become $18,633,985/year. BUT, that new car today that's $25,000, that's gonna cost ya only $5.8 Million!

As Einstein said, it's all relative.

 

[gtrist4life]

Thanks to all the replys.

I've got a better understanding and feel better that the fees only can be used on maintenence.

Don't know if there is a different thread or if this can be answered here, but I've heard that 150 points value can be allocated differently from resort time to resort time, but that the net effect is zero.

Please confirm this and possibly list some examples of this occurring.

Again thanks for all the help and info. I think Caskbill must be related to Einstein

Peace
G4L

 

[Tinkrbell]

I know Disney hasn't released the facts about the new resort yet. But if you were considering buying next year at Saratoga Springs, there's a good possibility that they will change the ending date Lets Hope.

If this becomes true, your numbers will change due to more years!

Maybe someone on this board has talked to their guide recently and can confirm this (very exciting) rumor.

 

[Caskbill]

Don't know if there is a different thread or if this can be answered here, but I've heard that 150 points value can be allocated differently from resort time to resort time, but that the net effect is zero.

I think what you're asking here is about the possibility of a reallocation of points.

DVC has only reallocated points twice. Once about 1996 at OKW, and once at BWV when rooms were split into Standard and Preferred views.

The TOTAL points for a resort cannot change. If you took all the rooms at a resort, added up all their point costs for the year, you'd get a figure. Let's call it 'X' number of points. This is the figure that cannot change.

What can change is how those points are allocated. For example OKW Dream season a 1-B/R is 20 points/night weekday and 48 points/night weekend, or 196 points for the week.

DVC might reallocate the points to 22 points/night weekday and 43 points/night weekends, or still 196 points for the week.

OR, they may change these so they 're 210 points for the week in Dream Season, but make a corresponding REDUCTION of 14 points somewhere else, perhaps in Adventure season.

They can reallocate points as long as the total number 'X' does not change.

So basically if something goes UP somewhere in the charts, something else somewhere else must go DOWN. The net change must remain zero.

If you were worried that DVC could simply raise the point requirements on an annual basis, like a hotel raising it's rates, NO, that is not allowed.

Again thanks for all the help and info. I think Caskbill must be related to Einstein

Thanks, but when I studied his theories in Advanced Physics classes in college, I definitely KNEW we were NOT related.

 

[gtrist4life]

Caskbill,

Thanks for the clear explanation of the "reallocation" question.
That was exactly what I was asking for clarification on.

I do have one more question. Is there any or info/thoughts on the pluses and minuses of buying new or resale? I"ll start searching this forum. I'm sure there's some threads.

So, pretty soon I guess it'll be up to me and the fam to discuss this purchase against a more traditional equity purchase ( like a condo in the Orlando area ) and weigh the pros-cons of each.

I do love the magic of staying on-site.
Peace
G4L

 

[Dean]

Originally posted by Tinkrbell
I know Disney hasn't released the facts about the new resort yet. But if you were considering buying next year at Saratoga Springs, there's a good possibility that they will change the ending date Lets Hope.

If this becomes true, your numbers will change due to more years!

Maybe someone on this board has talked to their guide recently and can confirm this (very exciting) rumor.

I doubt they'll change the ending date for SS but they might if and when EP comes on board. Stay tuned.

 

[Tinkrbell]

Dean- Is EP the Eagle Pines resort? I thought that one was supposed to be built before SS was? Where was that one going to be built?

 

[Dean]

Originally posted by Tinkrbell
Dean- Is EP the Eagle Pines resort? I thought that one was supposed to be built before SS was? Where was that one going to be built?

It was announced then put on hold when SS was announced. Last I heard it was still tabled.

 

[PamOKW]

Eagle Pines was announced prior to SSR. When they decided to "rebuild" DI as SSR, that was easier than all new construction and was done first. Eagle Pines will be at the Bonnett Creek CC, on the Eagle Pines course. (This is not far from OKW, on the way to the Wilderness campsite).

The plans for EP were very inviting. I hope it still comes to fruition.

 

[Kingzoo]

I did an analysis of buying in at $74 vs renting points at $10 each to see which approach cost more. Only considering the first ten years and ignoring the tax benefits....it is better to buy DVC than to rent points. I used renting because I wanted to compare apples to apples and it is offten cheaper than cash reservations. If taxes are considered, or the analysis extends to 2042, it only get more favorable to buy.

 

[sparkspeak]

Originally posted by gtrist4life
Caskbill,
I do have one more question. Is there any or info/thoughts on the pluses and minuses of buying new or resale? I"ll start searching this forum. I'm sure there's some threads.

Recent postings indicate Disney is buying back many resale contracts for up to $70 per point. Current cost new from Disney is $74/point if discounted for MB ("selling" back your first year's points tp Disney.) So, even if you could get a resale for $70/point, if you add closing costs of approximately $600 (no closing cost if bought direct from Disney,) you will still be paying $74/point (for 150 points.)

 

[ToyStory Fan]

I've actually done the cashflow model for this starting in 2001 (when I bought). I have included changeable assumptions (that apply globally, not to individual years) for variability in the following:
1) interest rates
2) Tax rate increase
3) Maintenance % increase
4) Cost of living (i.e. Cash Paying Hotel Room Rate increase %)
5) DVC Reserve % increase
6) % Points you will Rent out each year (0 if you use them all yourself)
7) Wtd Average number of points used per week for VWL, BCV, BWV (all the same rates for those 3) 123 points per week on a wtd avg basis.

At the end of the day you are hoping that the hotel room rates (which factors on your "savings") rise at a faster rate than the maintenance fees. I will probably modify it at some point to allow for changes year over year to track to actuals, but I'm a little busy at work these days, so it'll have to be late one night in front of the computer when I'm not here or on ClubLexus.

 

[buck4568]

Let's but the money aspect in to true perspective. A one bedroom villa at BWV or BCV or any of the villas is not a hotel room. When we decided to buy into DVC we were on a visit to WDW staying at Port Orleans for a week with our DS & DD. After the tour at BWV I could not get out my money fast enough,LOL. There is alot more to consider than the cost over 40+ years. How often will you be going to Disney for vacations? Do you care if you are on or off Disney property for your lodging?
Will you visit the other DVC resorts that are not at WDW? Will you use the II exchange option or the concierge collection or adventurer collection. And the world passport collection is also available. These are things my wife and I will use down the road when the kids are grown and we can GO BY OURSELVES! Oh my god those days are not going to be here for a while, LOL

I believe the cash price per night is well over $300 per night and up at BWV for a one bedroom villa. Use that number to crunch the numbers and you will see how much you saved buy buying points now. If you don't mind hotels and your not going to visit a Disney resort at least once every two years then you probably should not but into DVC.

There comes a point where you get analysis paralysis and do nothing. Been there done that!

Go for it! If you decide its not for you in five years sell the points. You will get your money back and more!

 

[ToyStory Fan]

Originally posted by buck4568
Let's but the money aspect in to true perspective. A one bedroom villa at BWV or BCV or any of the villas is not a hotel room. ...I believe the cash price per night is well over $300 per night and up at BWV for a one bedroom villa. Use that number to crunch the numbers and you will see how much you saved buy buying points now.

Not sure if this was aimed at my response, but this (your suggestion) was the approach I used...Only comparing apples to apples. I don't think you could even come close to comparing off-property resorts, there are too many "soft" perks that come-along with staying on property. I also ignored the tax benefit because at a certain point they phase out.

 

[buck4568]

I was giving my 2 cents to the original poster. I thought your example was apples to apples.