Calculating price per point for each stay?

[AstroBlasters]

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.

I understand where you are coming from, I am not factoring potential resale value into the equation. However, I would consider that a much riskier calculation. The only thing you actually know with certainty when you buy a contract is the upfront price you pay and that you are obligated to annual dues.

My way of calculating doesn’t require “guessing” because it assumes you hold to maturity and that dues stay in a range tied to inflation over time. At maturity the contract is worth $0. Based on that I can make a reasonable determination on what I am willing to pay per point for the contract.

I also don’t buy into the rental replacement method because it is riskier, there is no guarantee you can rent the points.

So, for Grand Cal a studio in mid-March is 26 points per night which equates to about $384 per night at $260pp. If the pp was $185, which wasn’t that long ago, it would be about $335 per night.

Your method would make it $211 per night. I just feel that would lead to people overpaying for contracts.

 

[TiggerBouncy]

I just looked at my initial investment as sunk cost. The only thing I really do now is SOMETIMES when I go stay somewhere, I look up what the stay would have cost me retail, my eyes boggle at the $10,000+ rack rate for the stay, and I thank my stars that I purchased DVC because otherwise I would never have stayed at such a hotel.

 

[gmi3804]

I suppose one could consider the "opportunity cost" of their initial investment (taking into consideration fair market value of their points against the price originally paid, and adding that amount to some current annual market indicator) in along with the dues per point when calculating the actual cost of a DVC stay.

I'm a real estate Broker who works with investors, and each year my clients analyze their Return on Investment, and there are many factors to consider (debt service, personal property depreciation, current market value, equity in the property) when deciding to sell an investment property and rollover the proceeds via a 1031 exchange to maximize the earning power of their assets. Certainly timeshares are a different animal, but basic analysis rules could apply if you consider the value/cost of your vacation stay the "return."

 

[AstroBlasters]

Doing the math on this thread just led me to putting in an accepted offer for a 200 point VGC contract @ $225pp. I need to stay off of the “Purchasing DVC” threads…

 

[BaybeeYoda]

I just did the math assuming my principal is worth 5% interest…. And I got to $14.75pp.

So that’s the multiple that I use, which would be accurate if I do not resele my dvc.

 

[808blessing]

If you are looking for ways to justify, assume you will go the cheapest times of the year. For example, calculate 16 pt stays or 9 pt nights. More nights = more ROI.

Moral of story: don't look at the purchasing threads until you are ready

 

[drzeller]

Upcoming trip for 17 days in a 1 bedroom at SSR is 289/night (points+up front) vs 832/night booking it via Disney.

(Over $14K!)

Yikes!