Breaking even with DVC spreadsheet

[Honeymooner04]

I'm creating a spreadsheet to help me determine when I'll "break even" with our recent DVC purchase. My initial plan was just to take the cost of our initial buy-in and then subtract the going rate for the room we used. Then I started getting all analytical and thought maybe I should also add in the annual dues each year. And THEN I got really crazy and thought maybe I should add in park tickets, food, airfare. Do any of you fellow DVCers have a spreadsheet like this? If so, what method did you use and why? Thanks!

Patty, who *sometimes* overanalyzes

 

[Granny]

I've never put together a spread sheet, though many have. You can drive yourself nuts trying to figure in every angle.

But for sure you need to just compare what you pay for DVC with what you would pay for rooms otherwise. Don't start throwing in food, tickets, etc!! Sure you can save money with DVC on those things, but if you want to do this, you will find it hard enough without complicating it with non-accommodation financials.

Some would compare to the same DVC rooms rack rates...well, that will get you a real fast break even!!

Others would compare to a moderate or deluxe resort room rate. But that's tough too since discount rates bounce up and down.

And don't forget the time value of money of plunking down the large payment up front vs paying cash throughout the years.

Like I said, it can drive you nuts. Those who care about such things will tell you that they break even somewhere between 5-12 years depending on how they calculate it.

 

[Dean]

There are many variables and you must decide which are applicable to you and which you want to consider or ignore. Personally, I'd use the upfront cost, lost return on investment, interest paid if financed, yearly dues assuming about a 5% yearly increase, inflation at 3-4% compared to where you'd normally stay at a discount price (not rack rates). Then I'd do the same comparison for your likely DVC accommodation, also at a discount price but not rack rate. IMO, DVC needs to save you about 20% over discount price for the same option (minimum) to be justified. And at least be a break even compared to a moderate for the number of rooms your family would need.

 

[DisDaydreamer]

Don't have a spreadsheet. We have done some basic calculations and know we're on the better side of the cost curve long term. What we really understand without having to do any calculations though is that had we not done this 8 years ago we would have missed out on about a dozen wonderful vacations and short trips. We (DW & I) frequently acknowledge to each other how glad we are to have bought into DVC.

 

[browniemtb]

I compared apple to apples......no airfare. park tickets, or food was included. These would be things you would have to spend on anyway. DVC is basically a room, so compare room to room and yes dues would be a part of. So waht I did is take the purchase price added it to the dues over the course of the contract....but I did not take into account any dues increases with this calculation...Now you get 1 big number and then divide by the number of years left on the contract...this will give you a rough number on the per year expense. So in my little spread sheet I post the going rate for the rooms we stay in verses the cost of DVC. Example...most will break even in 5 to 7 visits and that would be including dues as long as you compare a stay at the same resort. So don't compare the cost of the All Stars resorts if your staying at the Beach Club.
Brownie

 

[salmoneous]

As you can see, lots of people do the calc and there are many different approaches - each giving a different answer - none of which is "right".

Others have hit the two big questions that make a difference - the assumed cost of the non-DVC room and the interest on upfront costs. The other big factor is the resale value of your DVC.

I like to assume you can sell your DVC for 50% of what you paid for it anytime in the next 10 years. Makes a *big* difference.

Oh, and one small thing, be sure to include closing costs (if any) in your calc.

Have fun,
Sal

 

[browniemtb]

As you can see, lots of people do the calc and there are many different approaches - each giving a different answer - none of which is "right"

In one respect they are all right.........everyone calculates their Disney interest differently. Also I can't really say putting a resale figure into the question would make any sense.......since most buy with no plans on selling. Assumed costs have to be associated into your figures since there are no definitive costs in the market for future cash stays. Interest, yes, only if you are borrowing to pay DVC, closing cost, yes, thats if you are going resale......but I think Disney is now charging closing cost as well, not sure though. As I said all the answers you get are correct to a point but the big one is don't "assume" a resale...take that figure out of it. If you use todays cash ressie figures for comparison....well, they are only going to go up...shortening your breakeven. I'm sure what ever your doing makes sense and is more than likely is correct + or - a few dollars.......Good Luck
Brownie

 

[1000th happy haunt]

My husband is keeping a spreadsheet. He actually adds in the amount of money we would have earned/lost from our Fidelity account (where we took the money out of to make the initial DVC purchase).

 

[prez65]

The way I feel about it is....I spent the money buying DVC now its gone. I was financialy able to do it without feeling it to much. I now will be able to take 2 vacations a year in a 1 bedroom and just pay the flights. If ever there is a financial change in my life for the worse...at least I know I will still be able to take my Family on Vacations...and if I ever fall way back financialy at least I know I can sell my DVC.

I have not tried to fiqure out if it is worth it financialy or when I will break even...all I know is now it has become real easy to take a Vacation....and that was worth the price.

 

[U2FanHfx]

Hi,

I posted mine a while ago and I used the method of invest vs. purchase. It's a debate that friends of mine always brought up with me and I wanted to prove them wrong. I took the average increase of dues and room rates over the past couple of years to get the increase.

Check it out here....

Regs,

CJM

 

[tmt martins]

I know that when I financed it I was looking at the monthly payment + dues for the entire year.

I came up with a price I was payin to stay at the Mods for the week we normally go + a 4 day at a mod for our fall/winter trip and came up with a number a bit higher then that. So I'm really only paying by month what I would be paying a lump sum and just paying off anyhow.

Now I also get a few extra weekdays or as well so that a bonus as we wanted to start going down anyhow.

My break point will be 7 years as thats when I will have it paid off if nothing extra comes in that I can put on it.That money was being set a side for vacation anyhow but we would have half and charge half then pay it off as the year went on and start all over again.

I'm more looking at 7 years down the road when I can go down for 3 weekday trips of 5 days each trip just on points and only paying maintance fees for that.

You will never get anyrate anywhere near that.

 

[mikayla73]

The way I feel about it is....I spent the money buying DVC now its gone. I was financialy able to do it without feeling it to much. I now will be able to take 2 vacations a year in a 1 bedroom and just pay the flights. If ever there is a financial change in my life for the worse...at least I know I will still be able to take my Family on Vacations...and if I ever fall way back financialy at least I know I can sell my DVC.

I have not tried to fiqure out if it is worth it financialy or when I will break even...all I know is now it has become real easy to take a Vacation....and that was worth the price.

ITTA ... although I have wondered about when we'll be "breaking even." I also think there is more than one way to breakeven, get your money's worth etc ... the pleasure and happiness we will get from our trips will more than make up for the cost IMHO. We would be spending money on vacations anyway, might as well make it a nice one (Geez that sounds corney I hope it makes sense )

Before we bought our DVC we had only stayed off site at DL, and hadn't been to WDW yet (we kept talking about going) and now we are staying at the DLH and planning a trip "home" to WDW, both in 2007

Maybe someday when I have some extra time ( yeah right cause I will be on the DIS with all my extra time ) I will try to put some numbers together and figure it out I do think it would only be fair to compare the cost of the room you actually booked and stayed in with your points, not where you would've stayed (off site in my case), leaving out the airfare, food, and tickets because you would have to buy those anyway. IMO that is comparing apples to apples. Maybe a spreadsheet to figure out how much DVC discounts saved you is where the food and tickets could go, but that would be an even bigger headache!!

Good luck with your spreadsheet!

 

[drakethib]

This is a easy speadsheet to build.

Cell one : Can I afford it?
Cell two: Will it make me happy?
Cell three =(if cell one + cell two = yes,then buy)

 

[cruisinpenguin]

COLOR=Green]Well put!! Well put!![/COLOR]

 

[browniemtb]

This is a easy speadsheet to build.

Cell one : Can I afford it?
Cell two: Will it make me happy?
Cell three =(if cell one + cell two = yes,then buy)

You hit the nail on the head....and just think how easy that spreadsheet will be to build in Excel.

Brownie

 

[bobbiwoz]

It was only because we were thinking about buying DVC that we found this board. Sometimes we were sent a postcard with a discount or found a discount on the WDW site, but for the most part we paid rack rate. So, I suppose that we would compare our savings to rack rate, if we ever wanted to do a analysis.

Very late in our before DVC years, we found that the S/D gave wonderful discounts to Teachers, so that helped our budget then. Those aren't as plentiful as they once were.

Bobbi

 

[corpcomp]

This is one of the few purchases in life (other than Krispy Kreme donuts) that will probably make you happy.

Cost - Yes

Happiness - Priceless

 

[byoung]

I include the dues on mine. Subtract the rack rates of the rms etc.

 

[Sammy]

When we first were looking to purchase DVC, I drove myself crazy creating the "perfect" spreadsheet to calculate DVC cost over the years vs. getting regular rooms. After all was said and done, I figured out that 5 of us being able to spread out in a 2 bedroom villa....with a jacuzzi.....and a full kitchen....etc., etc., was priceless (and it really wasn't costing us any more than renting two rooms at a mod).

PS. On my spreadsheet, I did include the total cost of purchase (did not finance), and a calculation to accommodate a yearly increase in dues.

 

[drakethib]

I go back to my other post.

If you can afford it and it will make you happy buy it.

If you think for one second DVC will save you any money, I don't think it will.

Here is my reason. You will make more trips to WDW or since you now have more money to spend since you "saved" money on your room, you will blow it elsewhere in the park. YMMV. I hear this phrase all of the time from my family "we saved so much on the room lets do blah blah" And that is ok.

My wife and I own 200 points. I don't look at as an investement. I look at it as disposable income which will bring our family some joy. The money we spend for DVC is gone and I will never see it again unless I sell.

DVC is one of the best purchases that our family has done. Would I do it again? Yes indeed.Will it cost me more money then I proably would have spent had I stayed at other Disney resorts/ Probably