Anyone look at DVC as a possible investment?

[ccc002]

It shouldn't be viewed as an investment but it can return you money if you play your cards right. Here is my scenario: I will be adding on around 1000 points with the intention of renting those points and maybe some of my existing points. Lets assume dues of $4.50 per point and also assume I will rent for $11 per point. That is $6.50 per point profit or a return of 6.5% on my money...

Actually, the return is worse that than that because the 6.5% is a simple return and not a compounded amount where you can "earn interest on the interest." If you assume holding for 15-years, the 6.5% simple interest is equal to roughly 3.8% compounded and goes down the longer you hold it. You can get 5-yr and 10-yr CD's that are better than 3.8%, and do no work.

So, I agree, that "It shouldn't be viewed as an investment..". However, as a hobby to maximize your family's WDW experience, you could do worse.

 

[BWVNUT]

They are referring to all the rumors in regards to what resort they are adding next as a DVC II property. There is work going on on several resorts so it flames the fire and the guides do not help as they seem to like to play into it a little. Probably will be the same term as SSR.

Oh, OK, gotcha, just rumors . . .thanks!

 

[Plutofan]

People need to realize what there true costs are in the DVC. If you hold it to maturity then your true costs are your yearly dues, amortize your up front costs over the number of points remaining on the contract and add in your mortgage interest or if you paid cash the lost earnings on the up front costs if you put the money in a CD. For my purposes I use 5% return on my up front costs. Based upon that some people will be surprized to find out that from a true economic stand point their true costs in the early years is probably at least $10 per point if not a lot more. Thus you need to be careful thinking of DVC as an economic investment if you hold on to it for the long term.

 

[dianeschlicht]

I was wondering this myself. We love Disney - WDW and DCL. We are not likely to take a family vacation there every year (although DS and I would love to do that).

So, if I would not use the points every year but rent them others would it be good if we have the cash?

Does anyone wish they could stay at other resorts (I know you can but it kind of wastes points doesn't it). Also does using points for a cruise waste them also?

I know Disney says you are prepaying your vacations for years to come but can't they raise the number of points it takes an then you feel like you have to get more and don't really end up being cost free?

Thanks for the info. I'm new at this.

Points can NOT increase for DVC properties. They might change the dates around, but the points needed for a stay will be the same 35 years from now as it is now.

Now if you are talking about exchanging points for stays in non-DVC resorts, yes, those points can and do increase, because the cost of staying in those resorts increases. In DVC, the only increase you will see is not in points, but in maintenance fees.

 

[Caskbill]

....I know Disney says you are prepaying your vacations for years to come but can't they raise the number of points it takes an then you feel like you have to get more and don't really end up being cost free?

Thanks for the info. I'm new at this.

The TOTAL points for a DVC resort for the year cannot go up, and is fixed. DVC can reallocate points if usage and demand are not balanced correctly.

For example, if units are being booked M-F and not Sat-Sun, they might lower the Sat-Sun point requirements, but raise the M-F requirements to get more people to use points on weekends. However in this example, the total points for a 7-day week might not change.

Likewise, if the Premier season is going empty, they may lower points for that season, but then would have to raise points somewhere else.

They can do this as long as the total points for an entire resort for the entire year does not change. This is fixed by resort.

Total points for any given resort are fixed. They cannot for example lower points at BWV and raise points at OKW to make up the difference.

That said, DVC has only reallocated (or rebalanced) points one time, in 1996 at the OKW resort.

 

[Judique]

The TOTAL points for a DVC resort for the year cannot go up, and is fixed. DVC can reallocate points if usage and demand are not balanced correctly.

For example, if units are being booked M-F and not Sat-Sun, they might lower the Sat-Sun point requirements, but raise the M-F requirements to get more people to use points on weekends. However in this example, the total points for a 7-day week might not change.

Likewise, if the Premier season is going empty, they may lower points for that season, but then would have to raise points somewhere else.

They can do this as long as the total points for an entire resort for the entire year does not change. This is fixed by resort.

Total points for any given resort are fixed. They cannot for example lower points at BWV and raise points at OKW to make up the difference.

That said, DVC has only reallocated (or rebalanced) points one time, in 1996 at the OKW resort.

I thought they did something similar at BWV when they created standard view? Or was standard view there to begin with? Memory slipping here.....

 

[Sammie]

That's it? You're usually a man of many words.

Well it could go 2 ways, he is considering your suggestion, or he is wondering who on here works for the IRS now and is starting an audit on you.

 

[dianeschlicht]

I thought they did something similar at BWV when they created standard view? Or was standard view there to begin with? Memory slipping here.....

Standard view was there from the begining. The only thing that changed was they made the Boardwalk preferred view a guaranteed booking instead of just a part of preferred view.

 

[Dean]

I thought they did something similar at BWV when they created standard view? Or was standard view there to begin with? Memory slipping here.....

Originally there was only 1 view and this was true for a time after sales started. Early in the sales process was when they added the standard view points. There's no problem reducing the points as long as they didn't oversell (they didn't).

 

[DrTomorrow]

Well it could go 2 ways, he is considering your suggestion, or he is wondering who on here works for the IRS now and is starting an audit on you.

Well, my intent was to wonder if that poster had just forfeited any moral high ground in future postings. Now that you mention it, though, that username does seem like a FI, MI & Last Name.....

 

[Inkmahm]

I don't consider it an investment, I consider it a purchase of something we wanted. We intend to try to use all of the points ourselves. Maybe even borrow if we have to in some years. If I rent points out in the future, it will be just so we don't lose them, not because I want to make money.

I don't see us ever selling the points, either. If we can't use them, we have nieces and nephews who are soon old enough to be asking for them.

 

[Boas]

investment, no way... there are better places to put your money.

as you do the math, remember... disney has the margins calculated to deter this strategy.

invest in your family / vacation.

 

[DisneyRefugee]

It's an investment, but not a typical one such as stock or property rental.

I put in my upfront costs (i.e., downpayment), my costs of the loan over time, the amount of money I would save by not staying in a Disney resort like I used to for the past number of year (that's the kicker), added in the maintenance costs each year, deducted the property taxes from Federal taxes, etc.

Taking inflation into account and saying if I put money into the stock market instead and got a 10% return, I still had a VERY significant return in today's money by joining.

I was skeptical and looking for a reason not to buy, but based upon how I vacation there, it ended up being a slam dunk!