Any way to pay off Maintenance Fees?

[Tigger031266]

This is stupid but I hate debt and liabiilities. I own 4 DVC's completely paid off but i HATE paying maintenance fees. Every month another $200 for the next 40 Years?!?!?!

I would love to give or buy a DVC for Kids but who wants to strap kids with fees for 40 years (Thats Sick).

I guess I could setup some kind of bank account to cover fees but you would think Disney would setup a way to pay off those fees for the life of the DVC. How much would it be? (If I put 50K in a bank at 4.5% interest would it cover it?). Lets get it over with....

Another things, how do I get myself a Lifetime Park Pass...That would be cool. What woul dthat cost (400 *40 = 16K)?

 

[CMOORE185]

This would seem impossible to do because MF's are not a fixed cost, they change every year, usually more.

 

[Lynne M]

There's no way to pre-pay MFs for the next several decades, as they're calculated annually. Even DVC doesn't know what MFs will be that far out.

Maintenance fees are the operating costs for the resort. Housekeeping, property taxes, transportation, power, maintenance of the grounds, and lots of other stuff. The costs of those things change every year.

 

[crisi]

Theoretically, you could fund a trust. You'd work with a CPA to figure out the appropriate funding for the trust, have an attorney set up the trust, hire a trust administrator, and have the fees paid from the trust - when the contract life is over, you'd have any remaining funds distributed as you specify. I would think it would be a pretty expensive trust to set up - you'd need $2400 in 2010 dollars in income per year to hold steady, so you'd probably want a fairly safe investment that would give you $7k or so in income - the extra $4k would be put back into the trust to cover inflation. You'd also need to make sure that you have income to pay the trustee. You might eventually end up short if it wasn't adequately funded, so if you wanted to be sure, you'd plan for even more than that. With today's interest rates, you'd need to invest well over $100k to fund the trust. You could also do it with an annuity.

 

[Tigger031266]

And we can't estimate the increases?

I bet the wonderful folks at Disney could dream somethig up to get my money (that I will pay them over the next 40 years) TODAY.

I am sure that I could get pretty close even on my own with a bank account.

 

[BWV Dreamin]

I am in the process of setting up a trust. The trust will pay the maintenance fees thru the administrator (right now that's me and the hubby until death). At that point the beneficiaries will have some of the deeds transferred over to them. These are small and they will be able to afford the MF's. The larger contract will not be transferred over. The beneficiaries can opt to buy it or not. If not, the contract will just go into default. Disney can take it back. By that time there will be only a few years left.

 

[DebbieB]

That would be like calling up the gas or electric company and saying you want to pay your bill for the next 40 years. Your kids would have to pay the utilities when they inherit your house.

 

[Lynne M]

That would be like calling up the gas or electric company and saying you want to pay your bill for the next 40 years. Your kids would have to pay the utilities when they inherit your house.

Exactly. And who can predict how the FL property tax laws will change over the next 30 years?

 

[gpz]

In fact, considering the strict laws and regulations regarding timeshares, it is likely ILLEGAL for them to collect dues in advance no matter what formula they use, even if they are putting the money into escrow.

Do the trust if you are that worried about paying the dues. Or, your heirs can just rent out some of their points each year to cover the cost of the dues so there is no out-of-pocket expense.

GPZ

 

[jlewisinsyr]

Someone mentioned a trust, which is what you'd need or an immediate annuity, but like someone else mentioned, you'd need to fund it with around $100,000 most likely to support the dues for the next 40+ years.

You mention paying $200/month, before you even think of setting up a trust or something like that, why wouldn't you at least consider just paying them in one payment each year instead of monthly, then its just one bill?

This is something that should be noted for anyone looking at buying into DVC, the purchase price is a small part of the overall expense of DVC. Sure the initial amount of buying in seems daunting, but the long term dues is much more of a financial impact. This also debunks the idea that you cannot save money by financing DVC (not everyone uses this reason, but some do), sure it may delay your "payback" period, but it doesn't erase your long term. This is because paying an extra $5,000 - $10,000 in interest is a very small amount in comparison to the overall price (purchase and dues) for the next 40 - 50 years and if that's all that it took to swing the purchase from a "benefit to a loss", it wouldn't make sense to buy in.