Break Even Point

Doesn't it make sense to compare how points are actually used against a discounted rack rate for the same accommodations when looking at a break-even point? Feels like you are then comparing apples to apples, so to speak.
Each owner should compare against their preferred alternative accomodations. Without DVC, we would never stay deluxe. We would however stay at Riverside, so that's my comparison. We also would never rent points, due to the lack of flexibility, so no point using that in my comparison.

You also need to decide if you compare the exit sale cost in the mix. We had a BLT contract for 4 years and rented out two years of points, and used two. We then sold to buy RIV direct. Without going into details, the sale money plus rental money, minus all spent monies (orig purchase price, dues, broker fees etc) was exactly equal. Making the trip we took absolutely free for lodging.
 
Your break-even will take longer if you're comparing to renting points. If you're comfortable renting points, you will want to analyze your purchase much more carefully.

I like control of my reservations and the lower risk of loss if we need to cancel. Renting isn't something I'd chose to do even with the cost savings, so my calculations were based on how we typically stay (what we would normally pay out of pocket for our room) vs what the room would cost with DVC with simple math (purchase / #yrs + dues). So, for us it was what our moderate room including the available discount at the time would cost vs DVC.

We did not even figure in yearly escalations. It's a guess anyway. Regular room rates go up and so do dues.

We didn't figure in time value of money. We buy in small chunks that are vacation dollars regardless (investing is not an alternate use of the money)

We didn't calculate resale value. We hope to keep until the end (or that our kids will).

We did immediately take advantage of a DVC AP at the time and calculated that into our comparison.

FWIW, our initial purchase of BWV plus AP's for 4 cost less than $13K. The 2 initial trips we were already planning on taking were going to cost something like $7000 (I've long since thrown away the spreadsheet so I might be wrong). So, for $6000 plus dues we were getting 25 years of accommodations. I didn't need to do much more math.

Of course, we continue to add-on as our Disney trips change and ummmm..... expand.
 
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The question I have is would you have actually paid those prices if you didn't own DVC? If so, then the math makes. But if not, then I think using rack rate for those rooms isn't quite fair.

We own BWV and BLT. Usually when I'm doing off the cuff math on what value I get from DVC I look at what I would have paid instead. For my Sept 2022 BWV standard studio I look at what a 4 night stay at Swan/Dolphin would cost...because that's what I would pay if I didn't own DVC. For my dates it's right around $300/night including resort fees. The same nights at BWI are north of $600. While it might make me feel better that I'm getting $2500 in value....I'm really getting $1200 in value. I will say BWV is a nicer hotel than the dolphin so there is some added value for more deluxe accommodations, but I've never really factored that in to my values.

I do acknowledge post pandemic prices are nuts and many ARE paying Disney's asking price. So if you/others are in that camp DVC really is a no brainer in many cases.
My accommodations before were staying at my parent’s 20 minutes away from the park. Between the pandemic and an inheritance that paid for our VGC contract, we now own DVC and get to enjoy it even after my parents pass. Aulani was from me working many extra jobs during the pandemic and I previously never thought about staying in Hawai. I’m a teacher and the last three years about broke my family. Aulani will be that slowed down time we need away from school.
 

I would caution on the use of 35% off of rack rate (at least in the short term). Those deals have been few and far between in a post covid world and normally just for pass holders etc. You would think they will come back more in the future, but that’s an assumption. I think discounting rack rate by 20% at most is fair (and remember to add in the taxes)
 
For me I think it makes sense to compare the price to what you would be paying if you didn't have a DVC. I would never pay rack rates from Disney and then at some point the rental price will probably end up being out of the range I would be comfortable paying. So we would either cram 4 of us into a room at Pop or French Quarter or stay offsite.
 
I agree that you should compare to what your own personal alternative is so break even is different for everyone. My family paid cash for deluxe hotels pre DVC. I looked for discounts as well, I think the last one before we bought was about 20%.

Just for kicks, I sat down a few days ago and figured out what each point actually cost us over the length of contract. With what we paid in dues plus point cost, our stays since purchase average out to just under $300/night. We almost exclusively stay in one bedrooms. A random night next January has a CCV villa for $800, so say $640 if you can find a discount.

The kicker is we go more often now sooo… well I just won’t think about that.
 
I agree that you should compare to what your own personal alternative is so break even is different for everyone. My family paid cash for deluxe hotels pre DVC. I looked for discounts as well, I think the last one before we bought was about 20%.

Just for kicks, I sat down a few days ago and figured out what each point actually cost us over the length of contract. With what we paid in dues plus point cost, our stays since purchase average out to just under $300/night. We almost exclusively stay in one bedrooms. A random night next January has a CCV villa for $800, so say $640 if you can find a discount.

The kicker is we go more often now sooo… well I just won’t think about that.
Yeah.. having 900 points now when we started with 180 means never breaking even!
 
We were a family who often stayed off-site. My MIL wanted to take her grandchild for one big trip to Disney. With her being a in scooter, we narrowed between BLT and BCV to be able to scooter to a park. We ultimately ended up at BLT and the cash she spent for just that trip would have been half of our first contract. We were hooked. I keep spreadsheets galore to track what we have done. I have areas I track, rack rate/discounted rack rate. We have gotten annual passes and discounts galore for 8 years now and I figure that as icing as this point. It took us roughly four years to break even but prices were much lower. I agree with others, it is really break even on what you would have done but for us, once we got hooked, we didn‘t want to go back. Of course now we have been AP for nearly 10 years (before even DVC) and go a few times a year so we are certainly going more. We also just purchased our first direct contract and nearly double of what we paid for our first resale just 8 years ago.
 
I will say this, generally few people break even with DVC. You will end up taking more/nicer vacations than you did before, but you won’t save money per say.
 
Newbie here and I know this has been probably discussed a lot but trying to get an idea if I am on the right track or way off. I have been trying to do just simple calculations when I would break even if we bought certain contracts that are listed right now. I did it based off we were to rent the points at $18 per point. Would like to know if it sounds right or if I am way off:

SS- 125 pts, $135 per point- 14 years to break even
SS- 250 pts, $132 per point- 13 years to break even
Poly- 150 pts, $177 per point- 18 years to break even

From what I have read I thought it would be less than that.

You're pretty close but there are a couple caveats:
-If you want to stay in Poly, as your home resort, booking at 11 months, you may have to pay slightly more than $18 per point. Meanwhile, at SS, you may be able to pay a bit less than $18 per point.
-When people talk about breaking even in 7-8 years, they are generally comparing to rack rate, more or less.
-Renting points is a fair but inexact comparison. There are some negatives of renting points versus buying (and some pros as well). I do think it's the best possible comparison.
-The big caveat -- The comparison fails to take into account the residual value of the owned points. Yes, renting Poly points for 18 years would cost the same as buying the points now (more or less). BUT, after 18 years, you'd still own a Poly contract with over 20 years remaining. So after 18 years renting, you'd have nothing. After 18 years of owning, you'd have a valuable contract remaining. Of course, if you invested a lump sum and then rented every year, you might have assets more valuable than a DVC contract.

Where this all points -- For 2042 resorts, where you won't have much if any residual value after 15-20 years, buying doesn't have much of an advantage over renting. For longer contracts (2060+), while it can take a while to "break even," if can still be fiscally advantageous to purchase instead of renting.
 
If you buy, no matter when the break even date is, you will own it. It will have real value in the resale market, how much no one really knows but it will be worth more than another rental bill.
If you try to factor expected resale value into your contract, the "break even point" probably occurs after the first or second trip you take :laughing:. Depending on how loaded the contract is, of course.

I bought my first contract, rented out 2 years worth of points on it, finally used it for a trip, and then sold it for more than I bought it for. I'm not sure when exactly I broke even on that one, but I'm pretty confident that profiting off of your hotel stays at Disney is fairly uncommon when you rent or stay in cash rooms!
 
I think you $20 per point is now not 10 years from now.

Just to add this could be true. My main point is Rentals will keep going up. So if it's $20 now then maybe it's $25-$30 in the next dacade.

In the end increase in cost of rental is something that should be in the math.
 
Just to add this could be true. My main point is Rentals will keep going up. So if it's $20 now then maybe it's $25-$30 in the next dacade.

In the end increase in cost of rental is something that should be in the math.

But dues go up as well, likely largely cancelling out any rental price increase. I actually expect rental prices to rise pretty slowly, the more DVC grows and as more contracts age—- we may hit a glut of point supply.
 
I will say this, generally few people break even with DVC. You will end up taking more/nicer vacations than you did before, but you won’t save money per say.
I know what you mean. Since DVC we're spending approximately 30 days out of the year at WDW. Pre-DVC we were doing one trip of 10-14 days every other year. We love it though and hope that the annual pass situation will work itself out for DVC members.
 
We own at 3 resorts and for each purchase the break even point came at different times for different reasons and as an owner I was able to get rooms that a rental situation couldn’t match.

Akv value studios require more than just home resort advantage. I made it a game to score akv value studios with our akv and our Aulani subsidized points. We’ve been lucky with our value studio stays being mostly in savanna view units so it didn’t take long for those contracts to pay for themselves even over rentals. We usually get bigger units at Aulani for family visits but also love the hotel category rooms for visits with just husband.

Dvc has offered some unique options for owners- our first pandemic vacation was to Hawaii shortly after Aulani opened back up. There was very few hotels even open on the islands- even The four seasons next to Aulani was shut down during our stay. Aulani and other hotel cash rates were ridiculous but Aulani was offering every 5th night free on points for dvc owners who booked with their points. I used my riviera points on that stay and it was pretty easy to honestly say I’d have paid whatever the crazy cash rate was for Hawaii hotels because we desperately needed a vacation. I figured my riviera contract was paid for after a 10 night Hawaii trip (with 2 free nights) and our first Rivera stay last year. I know some owners divide the purchase cost over the life of contract and then add in dues but I found it pretty easy to break even within a couple visits comparing with rates I’d actually been happy to have paid.

I know ap discounts aren’t a given but annual pass discounts have been a tremendous savings over the past several years. Our last ap renewals were done in 2019 so we got those for a little over $600 each. We activated the renewals in December of 2021 under the new system with photo pass included. Really appreciate the shopping and dining discounts too.

Ability to pay just mf’s now is pretty fun. We’re staying at BLT for the first time in a few weeks. We have a 8 night trip over Halloween and into Christmas decoration season at the new gfv units. Dvc has made visits so much more enjoyable and affordable. I know there are aspects of dvc I can gripe about but overall it’s been a pretty early break even and then quite easy to plan a trip knowing it is just mf’s for the rooms.
 



















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