Calling all DVC MATH gurus... Target price per point for all points over remaining life of contract?

[crisi]

The problem with that thinking is you have to use the points at 1 resort exclusively for it to matter. Have BCV points and stay at VGF?, you have really messed up the math.

Yes, but if staying at a resort is really important to you - you will be taking the majority of your trips at that resort anyway. If what you want to do is sleep around, buy the cheapest points and roll the dice with the seven month window.

 

[rubybutt]

Yes, but if staying at a resort is really important to you - you will be taking the majority of your trips at that resort anyway. If what you want to do is sleep around, buy the cheapest points and roll the dice with the seven month window.

Then why even figure out the price per point as was asked? Just buy where you want to stay.

 

[Aussie RJ]

Personally I would try and get CCV resale if buying another contract, a great mix of long contract, low cost and low point chart. Each to their own though.

Geez things change. When I bought CCV direct, the experienced said the dues were to high and the direct price was ridiculous! I agree though, the value is in CCV but only if you lean towards 1 or 2 beds. Studios are too messy to book.

 

[crisi]

Then why even figure out the price per point as was asked? Just buy where you want to stay.

Because some people put a lot of emphasis on getting the best deal. Analysis like this get closer to the actual price for a night - and the delta between SSR and BCV is still significant to a lot of people. Although, honestly, you've hit my nail on the head. Don't do a price analysis, buy where you want to stay. If how much you are spending on this makes a different, you are a really poor candidate for buying a luxury timeshare. If you don't care where you stay, buy the cheapest points - or the cheapest points with the longest contract length - depending how much the extra years mean to you.

But honestly, I'm not a fan of financial analysis at all because I think generally speaking, too many people use them to justify bad decisions rather than make good ones.

 

[Starport Seven-Five]

Amortizing the purchase price over the years of the contract equally is incorrect in my opinion. The value of a dollar decreases every year due to inflation so that $100 spent today is not the same as spending $10 per year over the next 10 years. This isn't as big of a deal when buying direct but it hits hard on the resale market where price per point can be twice as much for some resorts.

The calculation I did assumed I had $xx,xxx to spend and the portion not spent on the DVC contract would be invested/withdrawn over time to offset the dues. It gave some... interesting results. Top 4 using resale price averages were SSR, Aulani, Vero Beach, and Hilton Head.

 

[crisi]

Amortization is where I think most people get in trouble. You should do it to do it right - at the same time its an assumption where a slight difference in what you use for your TVM calculation can give you a wildly different answer - and that assumption is at best an educated guess - and at worst a plug number in order to make the rest of the calculation reach the conclusion you want. That and salvage value - another assumption - is where bad decisions are justified.

 

[LAX]

Interesting data, but completely wrong analysis. You assume linear depreciation in value. You MIGHT be able to make that assumption for the 2042 resorts. But the ones further out will probably appreciate and then at some point in the future start to depreciate. That is if the future is anything like the past. RIV has the highest potential to appreciate due to it not being ROFRd and in active sales currently. When incentives go away and ROFR starts then it should appreciate in resale. I do think before ROFR it will depreciate before it is sold out though. We will see. VGF resale will be really interesting. It will depend on VGF direct pricing in the next few months. I don't see anywhere but up for BLT, AKV, CCV as long as Disney maintains ROFR floor. BCV, BWV, WL all have to start depreciating soon. Even with a favorable point chart.

Did you factor in the resale restriction for RIV? Maybe I am misunderstanding you, but I think one would be lucky to recoup their initial investment after deciding to sell their directly purchased RIV contracts, IMHO.

LAX

 

[rubybutt]

Did you factor in the resale restriction for RIV? Maybe I am misunderstanding you, but I think one would be lucky to recoup their initial investment after deciding to sell their directly purchased RIV contracts, IMHO.

LAX

Here are my assumptions:
1) no incentives after RIV is sold out.
2) Increased cost of points at that time too, or shortly thereafter
3) ROFR will start and will set base on resale
4) ROFR will be more than AKV, SSR, OKW. They are all currently being bought 130s.

Note I said appreciation of resale, not direct ->resale. If you buy direct right now I think you need to hold for quite a while to make it make sense.

I have direct RIV. Its not always about the money.

 

[miTnosnhoJ]

Reminds me of a saying: A Timeshare is a real estate investment for those who can't do math!

 

[Prince John Robin Hood]

I bought AKV direct so I could book the value studios. I knew there was no guarantee I'd get them but I've been able to reserve them for 2 trips already. It definitely changes the numbers as my nightly rate is significantly less then when we stay at VGF.

 

[DougEMG]

But honestly, I'm not a fan of financial analysis at all because I think generally speaking, too many people use them to justify bad decisions rather than make good ones.

My bad decision was buying to many SSR/OKW points (cause they were the cheapest) instead of spending more up front and spreading the points around at other resorts. My excuse will be that things were a lot easier to book at 7 months back when I bought.

 

[crisi]

My bad decision was buying to many SSR/OKW points (cause they were the cheapest) instead of spending more up front and spreading the points around at other resorts. My excuse will be that things were a lot easier to book at 7 months back when I bought.

Staying at a resort you'd rather not be at is not worth a few thousand dollars. Not when you are talking about the amount of money that goes into Disney vacations.

 

[E2ME2]

Staying at a resort you'd rather not be at is not worth a few thousand dollars. Not when you are talking about the amount of money that goes into Disney vacations.

Staying anywhere on property is worth the price of admission for us,
and when we luck out at the 7 Mo. window, that's just a bonus!

 

[perchy]

But honestly, I'm not a fan of financial analysis at all because I think generally speaking, too many people use them to justify bad decisions rather than make good ones.

Ouch.

 

[perchy]

(Here is my justification ... lol.)

I like to do the math. For the full disclosure. I'm not buying the cheapest or the best value or the longest contract. I buy where I want to stay, going all in on the cost, whatever it is. And I want to understand what that is.

I have no interest in SSR.
Cabins tempt me but not enough to want to buy CCV.
I love RIV. Part of me thinks I wouldn't mind owning there with restrictions.
By the end of this year, I'll own OKW (2042) and HHI. Clearly, neither were value plays.

The only "investment" I know I'm making is in my ability to vacation every year. I do no-park trips every few years pre-DVC. I love the resorts in general and want to experience more of them. DVC is cheaper than cash stays always. Still, it's nice to be aware of what I'm actually spending.

Some people like to over analyze.

 

[mustinjourney]

Amortization is where I think most people get in trouble. You should do it to do it right - at the same time its an assumption where a slight difference in what you use for your TVM calculation can give you a wildly different answer - and that assumption is at best an educated guess - and at worst a plug number in order to make the rest of the calculation reach the conclusion you want. That and salvage value - another assumption - is where bad decisions are justified.

based on my recent failures in day trading, I'm better off spending the money now than trying to invest/gamble in the stock market.

 

[Disneynewb0001]

I initially dove into an offer last month deliberately without modeling everything out. There are so many moving parts to creating a model that going with ones gut might be the best approach. After my BCV contract was taken by Disney yesterday, I decided that I'll play around with modeling some of this out for kicks prior to deciding if I am going to go after another contract.

Doing this brings up all of the moving parts that have been discussed here in trying to create a model. Assumptions on maintenance fees and their annual increase, current/future point charts, cost of alternatives (rental cost per point and the annual change in this), discount rate, salvage value, how often you take trips to WDW, does one use all of their points, lose some, or rent some out, etc. Many moving parts that cannot be very accurately assumed as many factors can influence these assumptions. Not to mention the qualitative side- the value one places on 11-8 month booking window, not having the hassle of renting points, pride in owning vs renting and white card vs blue card, etc.

For folks who have developed their own models, what assumptions are you making about the cost to rent points as an alternative to buying? I'm using $18 per point with an assumption of 1% annual increase in the cost to rent. Not sure if this is consistent with what folks with more DVC experience had have seen over time.

Using the most recent November data from the forum sponsor on direct and resale rates as well as information on MF's and assumptions around MF annual increases and an overall discount rate of 8%- I don't show much of a case to buy IF the plan is to hold until the properties expiration. As mentioned prior, there is a lot of sensitivity based on the discount rate used.

The case somewhat changes if one doesn't plan to hold until expiration and makes some assumptions on the salvage value (price you can sell your points at and at what point in the future). Assuming that folks plan to take frequent trips and use their points up, the salvage value seems to be one of the main factors in making a determination. Disregarding TVM and opportunity cost, and some of the qualitative factors aside, the simple way to look at it here seems to be if you can sell your contract in the future for the same or greater amount than you paid (including commission and other costs to sell) in initially and your MF cost is less than your cost to rent points would be, this is a win.

All of this is to say, assuming you will take frequent trips and utilize your points, a simple way to think about your own decision on DVC may simply whittle down to what you think the salvage value of your contract will be and when you will sell.

 

[RoseGold]

My calculations show that of the WDW DVC contracts, Copper Creek is the winner from a price per point over the life of the contract perspective (without RIV incentives)

RIV expires 2070 and CCV 2068. It's not possible to get 2020 or 2021 points anymore, so these have less time than your chart. This doesn't change the math really, but RIV doesn't give you 49 years of points anymore.

 

[RoseGold]

To directly answer the OP, I bought my resale contracts around $10/pt/yr. There are still resale contracts on the market around $11.

If you're buying for pure math, I'd buy BLT right now. I think it has room to run and there are some bargains on the market. But any of the top 5-6 can flip the math when you get a motivated seller and some "free" points.

 

[JETSDAD]

RIV expires 2070 and CCV 2068. It's not possible to get 2020 or 2021 points anymore, so these have less time than your chart. This doesn't change the math really, but RIV doesn't give you 49 years of points anymore.

Every direct sale right now would include 2021 points.