Calculating price per point for each stay?

[TimCee]

I'm in the process of buying my first DVC at SSR, still waiting for ROFR but I have a question; how do you calculate cost per point for each resort stay? i.e. If I'm using 10 points per night at SSR, how much money am I spending per night? Thanks!

 

[AstroBlasters]

I'm in the process of buying my first DVC at SSR, still waiting for ROFR but I have a question; how do you calculate cost per point for each resort stay? i.e. If I'm using 10 points per night at SSR, how much money am I spending per night? Thanks!

I believe that you take the cost of your annual dues divided by your total number of point to come up with your annual out of pocket cost. Then take the total price you paid per point divided my the number of years left in the contract. Add those two numbers together.

So, an example:

1) Aulani is 9.11 annual dues pp.

2) I paid $96pp upfront with 39 remaining years.

3) $96/39 = $2.46pp

4) $9.11+ $2.46= $11.57pp

If an Aulani Ocean View Grand Villa is 157 points per night then the cost is 157x $11.57 = $1,817.49 + any applicable Hawaii specific tax.

 

[TimCee]

I believe that you take the cost of your annual dues divided by your total number of point to come up with your annual out of pocket cost. Then take the total price you paid per point divided my the number of years left in the contract. Add those two numbers together.

So, an example:

1) Aulani is 9.11 annual dues pp.

2) I paid $96pp upfront with 39 remaining years.

3) $96/39 = $2.46pp

4) $9.11+ $2.46= $11.57pp

If an Aulani Ocean View Grand Villa is 157 points per night then the cost is 157x $11.57 = $1,817.49 + any applicable Hawaii specific tax.

thanks!!

 

[zavandor]

Another possible way is calculating the opportunity cost of renting the points. The points you're using are not monopoly banknotes, they have real value. If you could rent your points for $19, then your 10 points night would cost you $190 (minus taxes on the rental income), still pretty good for a Disney resort, but worst than just calculating the costs only.

Or do as I do: don't think about it. I bought the points to enjoy them. I would not pay even rental prices for Disney deluxe resorts. I rent out the points I cannot use, but I don't think about the points I use.

 

[Minniesgal]

I believe that you take the cost of your annual dues divided by your total number of point to come up with your annual out of pocket cost. Then take the total price you paid per point divided my the number of years left in the contract. Add those two numbers together.

So, an example:

1) Aulani is 9.11 annual dues pp.

2) I paid $96pp upfront with 39 remaining years.

3) $96/39 = $2.46pp

4) $9.11+ $2.46= $11.57pp

If an Aulani Ocean View Grand Villa is 157 points per night then the cost is 157x $11.57 = $1,817.49 + any applicable Hawaii specific tax.

That doesn’t take into account the time value of money

 

[AstroBlasters]

That doesn’t take into account the time value of money

Oh, sweet Jesus, Mary, and Joseph. If someone wants to get that specific then they can do a search for other threads OR build their own spreadsheet and determine if they would actually invest the money (as opposed to to having it spent somewhere else) and what they want to use as an assumed rate of return.

I suppose we could then calculate if they were fully maximizing 401(k), HSA, FSA, IRA (pre-tax, Roth, or backdoor Roth) and 457 deferred compensation plan and the potential tax deltas between now and retirement, but I think they might be a bit overkill for a very simple question.

 

[dwg]

As a member since 1999 I can tell you that I never went into DVC thinking of it as an investment. I always felt it is just a a way to prepay vacations (at least the room). Also I am staying in deluxe rooms that I would have never stayed in without DVC. I gave up long ago trying to figure out where my break even point was. I originally looked at the cost of what a room in a deluxe resort would have cost if I was paying cash and felt at some point I broke even and never looked back. Without DVC I definitely would not have taken a vacation as often as we have over the years we have been members and I am grateful for that.

 

[DonMacGregor]

Oh, sweet Jesus, Mary, and Joseph. If someone wants to get that specific then they can do a search for other threads OR build their own spreadsheet and determine if they would actually invest the money (as opposed to to having it spent somewhere else) and what they want to use as an assumed rate of return.

I suppose we could then calculate if they were fully maximizing 401(k), HSA, FSA, IRA (pre-tax, Roth, or backdoor Roth) and 457 deferred compensation plan and the potential tax deltas between now and retirement, but I think they might be a bit overkill for a very simple question.

Doing all that eats into the “value of MY time in money” and therefore, I don’t bother thinking about it.

 

[StoweFoSho]

The cost basis is different for everyone. Yes, you can use the formula like above, and I have a spreadsheet with my costs to run the data, but it‘s honestly not worth it. Points are points and their value changes both in real and emotional amounts. Also, if you resell after a period, you’d recoup most or all of the initial purchase price.

I would say the same thing for trying to calculate how much you save on each booking- honestly not worth it to figure out because the prices fluctuate. Some people compare to the rack rate, some the discounted rate, some the rental rate.

 

[gmi3804]

Oh, sweet Jesus, Mary, and Joseph. If someone wants to get that specific then they can do a search for other threads OR build their own spreadsheet and determine if they would actually invest the money (as opposed to to having it spent somewhere else) and what they want to use as an assumed rate of return.

Right. And if you’d bought Tesla stock with that same money just one year ago….

 

[peabody58]

I use the example given and it works for my 'need to have a spreadsheet mindset'.

But you can also figure the initial investment as a 'sunk cost' and never think about it again unless you sell. That is one way to really make you feel good about your per night cost at WDW!

But money is money, and the really always in your face costs are the MF's, Park Tickets, Travel expenses, and Food/Souvenirs. These costs keep going up while the original buy in cost stays the same, and may even go down if you sell/rent (2042 resorts may soon be the exception).

Either way, you're a Member now, so just enjoy the product and have fun!

 

[DVCanadian]

I'm in the process of buying my first DVC at SSR, still waiting for ROFR but I have a question; how do you calculate cost per point for each resort stay? i.e. If I'm using 10 points per night at SSR, how much money am I spending per night? Thanks!

Multiply the dues for the points by the number of points.

 

[AstroBlasters]

Multiply the dues for the points by the number of points.

Then I should buy 1000 Grand Cal points because it will only be $8111 a year in dues…. Oh…wait… and a $260,000 upfront buy in…

 

[808blessing]

I went in after a fire sale Aulani rental deal on a four day 2020 Thanksgiving weekend. I thought how can I do this every year for the same cost, the first morning of the trip. Took out the calculator and Voila, DVC! I had never calculated or explored it before but decided to put an offer in within hours just to see bc the math made sense for what I projected would be the future cost. Then I did it (with much more research) after staying at BW. Then VGC. Then Beach Club. Ha! Not so much calculating as wanting it very much and now I am done done tho! Little bit too much Boardwalk but I am sure they will come in handy soon enough.

Calculating the point chart is what makes the difference and the priceless location figures into the "worth it".

When I bargain at international marketplaces, I think what is it worth to me. I've done my own finances since 17 so I usually just know what I want to pay regardless of other factors or opinions.

 

[DVCanadian]

Then I should buy 1000 Grand Cal points because it will only be $8111 a year in dues…. Oh…wait… and a $260,000 upfront buy in…

You certainly could.
The nightly cost is simply due x points.
If you want to get involved with accounting you can spread the cost of the membership buy-in across each year but that's not your cost for a night.

When the full buy-in is paid up front, pretending it was spread over a number of years isn't what happened.

Many DVC owners use accounting or elements of investment accounting to form their base DVC math for pre-paying for that DVC room.

 

[AstroBlasters]

You certainly could.
The nightly cost is simply due x points.
If you want to get involved with accounting you can spread the cost of the membership buy-in across each year but that's not your cost for a night.

When the full buy-in is paid up front, pretending it was spread over a number of years isn't what happened.

Many DVC owners use accounting or elements of investment accounting to form their base DVC math for pre-paying for that DVC room.

Respectfully, I fundamentally disagree with your statement. IMO amortizing the buy in should be a material factor in how you come to the decision about what you are willing to pay for point. Upfront costs are material, not trivial, for people looking to buy in at today’s prices.

 

[peabody58]

These 'How to price DVC' discussions always reminds me of my younger days when I would meticulously track all my junker cars vehicle expenses to figure my 'cost per mile'. Now I realize how off I was because I didn't factor in value of money and amortization costs. Oh and it was all done by hand using a slide rule because, well it was the 70's. Today I;m in tracking heaven with Excel spreadsheets and laptop computers.

 

[AstroBlasters]

I went in after a fire sale Aulani rental deal on a four day 2020 Thanksgiving weekend. I thought how can I do this every year for the same cost, the first morning of the trip. Took out the calculator and Voila, DVC! I had never calculated or explored it before but decided to put an offer in within hours just to see bc the math made sense for what I projected would be the future cost. Then I did it (with much more research) after staying at BW. Then VGC. Then Beach Club. Ha! Not so much calculating as wanting it very much and now I am done done tho! Little bit too much Boardwalk but I am sure they will come in handy soon enough.

Calculating the point chart is what makes the difference and the priceless location figures into the "worth it".

When I bargain at international marketplaces, I think what is it worth to me. I've done my own finances since 17 so I usually just know what I want to pay regardless of other factors or opinions.

I would love to get in on some “firesale” VGC points at $185ish

 

[808blessing]

OOh me too on that VGC!

I used real math for first purchase, then dependent on exit strategy for the rest. I can sleep at night and that's the main thing. #worthit

 

[EYL]

Respectfully, I fundamentally disagree with your statement. IMO amortizing the buy in should be a material factor in how you come to the decision about what you are willing to pay for point. Upfront costs are material, not trivial, for people looking to buy in at today’s prices.

I, too, use (annual dues x # of points). If we use it for all remaining years until the expiration of the contract, when the contract is worth $0, then yes, we spent all the money. But when we think about it, we're in our late-40s now and when PVB and RIV expire, we'll be in our 90s. We would have to sell it or pass it down to our kid somewhere along the way. If we sell it half-way, we *might* be able to get relatively the same amount of money back. So did we spend all our money? Or can we call it "even?" If we pass it down to our kid, it's still "worth" the same amount. All this guessing...I'll just stick to the quick and easy way to calculate it.

It's not fact, it's not accounting...it's just another way to look at your purchase and enjoy it.