Buying DVC while owning home or renting apt???

[LaneOT]

my husband and I have debated this for 3 years, while deciding on whether or not it was a wise choice to buy DVC. We travel yearly to WDW and love it, but we do not own a home and acc. to him, it isnt the wisest choice.

Do the majority of DVC members own their own homes or rent apartments?

thanks for your feedback,

 

[DVCGeek]

DW & I own our home (well, part of it at least; we owe the bank a lot on the mortgage, so do we REALLY own it? ). However, I don't nessecarily see buying DVC while renting a bad idea; if you can afford it and are saving money on vacations you would otherwise take anyway it can make sense.

Depends in part on why you rent- do you want/need the flexibility relocate regularly? Not want the maintenance and other potential headaches of owning?, etc.

Besides, if already own it, what difference does it make now- are you thinking of selling?

 

[iwrbnd]

If you can afford it then I say go for it!

I wish we had squeezed it into our budget when we were younger and could have enjoyed it for more years! By the time we could really afford it our oldest was 16 yrs old!

 

[vicki_c]

I don't understand the connection between home ownership and DVC ownership, unless you mean that your DH wants to save the $$ you would be spending on DVC every month (whether that's payments from financing or dues or both) and saving towards a house downpayment. If buying a home is a future plan, then I might agree.

But if you don't plan on buying a home and don't need to save that money towards a downpayment, I don't think the two things are related.

 

[speakupjc]

DVC will actually help you save money that you can use for your house down payment.

 

[LaneOT]

I don't understand the connection between home ownership and DVC ownership, unless you mean that your DH wants to save the $$ you would be spending on DVC every month (whether that's payments from financing or dues or both) and saving towards a house downpayment. If buying a home is a future plan, then I might agree.

But if you don't plan on buying a home and don't need to save that money towards a downpayment, I don't think the two things are related.

It was more of a question we asked ourselves than a connection between the two. I am a devout WDW vacationer and thought that it was a wise investment for us since we go once a year. His theology was leaning towards the "most of the people who buy DVC own their own homes"...which I would have to say was one thing the DVC "guy" said to us...in no uncertain terms he said most DVC owners use the equity on their house to buy DVC...ergo thats where DH got his argument from.

 

[bumbershoot]

...one thing the DVC "guy" said to us...in no uncertain terms he said most DVC owners use the equity on their house to buy DVC...

And what a terrifying concept THAT is, to me, a happy renter. To put your home in jeopardy to pay for DVC! Yikes.


We rent, we're happy renting. And as a renter, yes, it feels funny to own DVC when you don't own the piece of land and the wood/bricks surrounding you. But on the other side, after we muscled through our silly feelings, it's just fine. Doesn't feel weird to me now that we've done it.

Think of all the arguments your friends and family have likely thrown at you about getting a mortgage. Rent is "throwing away money"...that's a common one, right? To me, I see their point, but in our lives, all the people who have said that (save one couple) have actually LOST their homes that they "owned", or came within days of losing it, so I'm not so sure that having a mortgage means you "own" anything...

But taking that argument.... if you're already traveling, and putting money towards hotel rooms that you are simply renting...why NOT put it towards DVC and have something that you own, if only for 50 years? We were already spending the money on Disneyland trips, and we knew that the Disneyworld trips would start soon...it just made more sense than renting rooms at POP or CSR, and hoping for good package deals, for those 50 years.

 

[LaneOT]

We rent, we're happy renting. And as a renter, yes, it feels funny to own DVC when you don't own the piece of land and the wood/bricks surrounding you. But on the other side, after we muscled through our silly feelings, it's just fine. Doesn't feel weird to me now that we've done it.

Well put!!

I do also feel it strange to want to be owners of a DVC and not of a home of my own. Coming from our town (NYC), the foreclosure rate is high and we have been leery to buy for some time. So it makes us a bit afraid of buying a home. I dont feel fear in purchasing a DVC as I know it is something we will use over and over again.

 

[crisi]

I suspect most people who own own their own homes. But if you have no plans to own a home (I would't in NYC either), then that information really isn't pertinent to you.

Most people who own DVC probably have children. That doesn't mean it can't be owned and enjoyed by those who choose not to have kids.

 

[supersuperwendy]

We rent our house and own DVC!!! It may seem like an out of whack priority to some people, but oh well....it's our reality!!!

 

[skruggie]

I rent, have no real desire to own a home. Very happy with my DVC ownership and being a long term apartment renter.

I do, however very heavily invest financially into my retirement, something I could not do if I was a homewoner.

when real estate is $400,000 upward for anything remotely decent, that kind of takes the choice away from you.

 

[jlewisinsyr]

We rent and probably will never really own a place because we intend to start globe hopping in my career in the coming years, but we'll always have a place in our heart for Disney, so we will always have the opportunity to be welcomed "home."

 

[katied]

We own, and I would not have bought into DVC if it was a choice between spending money on buying a home or spending money on DVC. But, it doesn't sound like that's the case for you.

If you go every year, stay Deluxe, and overall looks like it's a good financial choice, then home ownership is really irrelevant.

My own 2 cents of advice is not to finance the purchase of a vacation (or a timeshare) - so I would not use my home equity, nor would I borrow from Disney to buy. I only made the choice to buy DVC after I had the money to pay upfront. I may be in the minority, but I'm a bit conservative with debt.

 

[CrazyDuck]

The only thing I'd add is; Make sure your income to debt ratio will still be high enough to qualify you for a home that you want to buy, when you want to buy it. When you plan to buy the house it will be easier to qualify if you are not still paying off your DVC purchase. Also remember that your maintenance fees will be calculated as debt so your debt to income ratio will not be as attractive. On the positive side, if you financed your DVC purchase and made all payments on time then that will be looked at as a positive thing. Also you could list your DVC deed as an asset in your loan applications!

 

[hardhead]

If you cannot pay cash for your DVC it doesn't make much sense to buy it the interested will kill you.

 

[hsmamato2]

I think it depends on your plans. Sounds like maybe your DH is thinking about a future home purchase....?
If so,buying DVC is a bad idea,especially if you have to finance it. It;s just more unsecured debt in that case,which can be very bad indeed. technically,it's a terrible idea to think of DVC as a good investment,as it actually saves you nothing. It is just a great way to vacation pretty well,with a large upfront buy in cost and annual fees to upkeep. Financing it just makes the cost bigger.
So, if you want to buy DVC,call it what it is,a vacation plan for the next (x) years of your life,but please don't think of it as a way to save money for a house- or an investment- it's not either of those things.
It CAN save some cash over time (depending how you pay for it ) but I think for the average buyer,financing their way in,it is not a cheaper option.
If it's not an either/or choice for you,then it's a great thing- But if it is,even the littlest bit a choice between quality of life/home ownership and financing expensive vacations upfront for the next 20 years,then you should just vacation at Disney,and use your income for your own home.

 

[bumbershoot]

If you cannot pay cash for your DVC it doesn't make much sense to buy it the interested will kill you.

Uh, OK. Definitely not OUR reality. What kills us is the 20.25% interest on DH's car loan from Chase. That's murder. And that's what you get when you have "neutral" credit...all the bills are in my name, it's just how it worked (DH was living with his mom and then with a friend who had everything in his name before we met), and he'd been CC free since he was about 24 (he bought DVC when he was 37). Compared to that, DVC interest, especially knowing it will be paid off inside of 2 years from taking out the loan (after paying off our car 3 years into a 5 year loan), is a piece of cake.

Not everyone has that perspective, though!

I think it depends on your plans. Sounds like maybe your DH is thinking about a future home purchase....?

I don't think that's where the DH is coming from. It just feels *funny* to own a timeshare when you don't own, for whatever reason, a home. It doesn't sound like the OP is renting just b/c they can't get a house. It sounds like they, like us, are HAPPY renting. Others have posted that they are in NYC, where owning something is a wild expense, and where plenty of people rent (hopefully in rent controlled buildings!) for their whole lives. There are plenty of us out there who are completely happy renting, letting other people carry the risk, letting other people fix our place, etc etc etc.

But I know that if I let my friends and family know that we own DVC, they would think it's weird.



I could go into a long thing about financing (which we did and it was the best choice for us with our vacation habits and situation), but since I don't know if that's what you were planning to do, I'll save it. Short version is...we're financing, paying it off inside of 2 years, and it's the best decision for us, and we'll still break even in a few years, it will still be a savings to us.

 

[jlewisinsyr]

If you cannot pay cash for your DVC it doesn't make much sense to buy it the interested will kill you.

Yes, financing DVC will add additional costs to your total outlay but the actual purchase price and interest if you finance is just a drop in the bucket when you look at the total in dues you will pay over the life of the contract, that is where most of the cost sits and doesn't vary whether you finance or pay up front.

 

[ypv]

We own. I wouldn't recommend buying unless you can pay cash (I actually don't recommend buying anything other than a home or investment property unless you are paying cash). DVC isn't really an investment. An investment is expected to generate income or profit. DVC shoudn't be expected to do either after you consider the initial cost to buy in plus the maintenance fees. DVC is a form of consumption. If you plan to go to WDW regularly, I think you'll find DVC to be a good value (economical form of consumption). I wouldn't recommend it as an "investment".

 

[sissy_42]

I never even considered the fact that I don't own. But for me I don't see buying a house to be a good option right now. Both me and DF are military and living in different states at the moment. We want to wait until one of us gets out and we know we wont have to move for a few years. I did finance but will have it paid off in less than four years. Like PP have said it is not an investment. I kinda look at it as something I wanted so I got it.