Can my analytical people help me out on the value of my prospective DVC purchase.

Nelson Rodriguez

Madd_Hatter
Joined
Aug 4, 2020
Hello Everyone,

I would first like to say thank you!
Thank you for existing to help answer my questions.
I don't think I would have looked at DVC so seriously if this board was not available.
So thank you very much!

I am looking at DVC for VGC resale.

I am trying to build up my charts and graphs for total value of a VGC purchase.
My main comparison points are:
Grand Californian (Deluxe view room) vs DVC 1 bedroom suite.
Chart over the 40 years we have on the contract with yearly increases on both room rate and
230ish points @213 a point is my guess. (Is this a good deal? I don't know...)

Does anyone have any good chart templates I can start with?
Has a value calculator been created yet to help jumpstart this process.

There are TONS of different factors to this including:
1) Relative price of same vacation retail vs DVC.
2) Slow inflation of the DVC point purchase?
(VGC @$214 a point pretty high, is there any room for the point value at VGC to increase?
3) How much can yearly dues increase by? You think they can cap it? 5% year over year is a huge.
4) How much can point increase go up by. Is there any time where you think 230 point isn't enough?

I know a lot of this is a gut reaction to love we all have for disney, but I would like to put a qualitative "Value" to this problem.
(Mainly because my wife is asking for the "value" proposition) :)

In my "gut" I know this can save me money, but I would like to put a value to it.

THanks,
Rodriguez Fam.
 

Sandisw

DVC Forums
Moderator
Joined
Nov 15, 2008
Point charts for the entire resort can not change but can be adjusted. However if they raise one part it must be offset elsewhere.

Dues increases can go as high as 15% increase but never have and still need to be based on expenses so it would be something really unique to ever see a year like that.

When I bought I looked at only what it would cost me to own vs paying cash with a 30# discount..standard at the time. We did 5 nights then and a studio saved us after 7 years and a 1 bedroom would amount to about what we were paying but for a nicer room.

I did not consider resale value or time value of money. I know others do.
 
  • sethschroeder

    Registered
    Joined
    Feb 24, 2013
    3) How much can yearly dues increase by? You think they can cap it? 5% year over year is a huge.
    This was my biggest hesitation before I bought in. What I realized is that MFs are just for keeping up the resort. What that means it that Cash prices are always going to outpace MFs increases because Disney is not going to want to make less money per night in profit.
     

    CastAStone

    Model Citizen. Math and business nerd.
    Joined
    Jun 25, 2019
    Does anyone have any good chart templates I can start with?
    I know my name was mentioned but what have to compare to hotel stays is very WDW focused; there isn't a really good place to pull Disneyland hotel prices from, and the point chart time periods are different at DLR vs WDW. I would suggest instead comparing to the cost of renting points, which is already more cost-effective than staying in a hotel, and is much simpler to compare to.

    Essentially, there are 39 years left for VGC (2060 you don’t get points). If you assume you would make an average of x% after accounting for inflation by saving money and pulling money from your savings to go on a trip, then each year is worth roughly x% less to you now than the year before it. So for example if You thought you’d make 6.5%, which is roughly what a typical retirement account makes over the long run, then each year is worth .935 of the prior one, and in sum you are buying the current equivalent of 14.27 years of DVC stays ((.935^39)-1)/(.935-1).

    So each point is costing you 230/14.27=$16.12 / year plus $6.60 in dues = $22.72 / point / year in today’s dollars

    Renting VGC points is currently $20/point through the largest broker.

    This assumes that point rental costs and dues inflate at similar rates, which, who knows. Trying to predict the future trends for aging timeshares, a business that is notoriously volatile, particularly at DLR where they are quintupling the timeshare capacity in the next 3 years, is futile. That’s why I think it’s important to make sure it makes sense today. I don’t think VGC does.
     

    davidl81

    Mouseketeer
    Joined
    Aug 12, 2008
    I know my name was mentioned but what have to compare to hotel stays is very WDW focused; there isn't a really good place to pull Disneyland hotel prices from, and the point chart time periods are different at DLR vs WDW. I would suggest instead comparing to the cost of renting points, which is already more cost-effective than staying in a hotel, and is much simpler to compare to.

    Essentially, there are 39 years left for VGC (2060 you don’t get points). If you assume you would make an average of x% after accounting for inflation by saving money and pulling money from your savings to go on a trip, then each year is worth roughly x% less to you now than the year before it. So for example if You thought you’d make 6.5%, which is roughly what a typical retirement account makes over the long run, then each year is worth .935 of the prior one, and in sum you are buying the current equivalent of 14.27 years of DVC stays ((.935^39)-1)/(.935-1).

    So each point is costing you 230/14.27=$16.12 / year plus $6.60 in dues = $22.72 / point / year in today’s dollars

    Renting VGC points is currently $20/point through the largest broker.

    This assumes that point rental costs and dues inflate at similar rates, which, who knows. Trying to predict the future trends for aging timeshares, a business that is notoriously volatile, particularly at DLR where they are quintupling the timeshare capacity in the next 3 years, is futile. That’s why I think it’s important to make sure it makes sense today. I don’t think VGC does.
    While comparing cost of owning versus renting is a good metric, I would not let that be my determining factor. Since in your case it is close, now the op has to depend on rental points being available, and IMO there Is a lot of value in the long term of controlling your own reservations instead of renting every year.
     

    sethschroeder

    Registered
    Joined
    Feb 24, 2013
    Awesome! Thanks I am building my own but its hard to get an apples to apple comparison.
    I also don't know how many fees, etc I have to keep in mind to make the comparison.
    The only future costs would be MFs which you pay yearly. Everything else would be external to DVC like tickets and food.
     

    Nelson Rodriguez

    Madd_Hatter
    Joined
    Aug 4, 2020
    I know my name was mentioned but what have to compare to hotel stays is very WDW focused; there isn't a really good place to pull Disneyland hotel prices from, and the point chart time periods are different at DLR vs WDW. I would suggest instead comparing to the cost of renting points, which is already more cost-effective than staying in a hotel, and is much simpler to compare to.

    Essentially, there are 39 years left for VGC (2060 you don’t get points). If you assume you would make an average of x% after accounting for inflation by saving money and pulling money from your savings to go on a trip, then each year is worth roughly x% less to you now than the year before it. So for example if You thought you’d make 6.5%, which is roughly what a typical retirement account makes over the long run, then each year is worth .935 of the prior one, and in sum you are buying the current equivalent of 14.27 years of DVC stays ((.935^39)-1)/(.935-1).

    So each point is costing you 230/14.27=$16.12 / year plus $6.60 in dues = $22.72 / point / year in today’s dollars

    Renting VGC points is currently $20/point through the largest broker.

    This assumes that point rental costs and dues inflate at similar rates, which, who knows. Trying to predict the future trends for aging timeshares, a business that is notoriously volatile, particularly at DLR where they are quintupling the timeshare capacity in the next 3 years, is futile. That’s why I think it’s important to make sure it makes sense today. I don’t think VGC does.

    I am not sure of the scope and scale or the rental market.
    My aim is to find the point of intersection between DVC vs Retail of a similar room at the Grand californian.
    That point is where we can find value, and the point where Retail pricing outpaces DVC.
    Even at $211 a point, it will only take ~4 years until DVC starts starts to save money.
    As time shares go, that is a really short window of value.
    I am wondering if I am missing something in my calculation.
     

    Nelson Rodriguez

    Madd_Hatter
    Joined
    Aug 4, 2020
    While comparing cost of owning versus renting is a good metric, I would not let that be my determining factor. Since in your case it is close, now the op has to depend on rental points being available, and IMO there Is a lot of value in the long term of controlling your own reservations instead of renting every year.
    I am planning on owning not renting...
    I agree I would like to guarantee a disney trip til I am old and grey!
    Maybe my kids would like to use it with their children.
     

    vacay77

    Earning My Ears
    Joined
    Oct 24, 2017
    I am planning on owning not renting...
    I agree I would like to guarantee a disney trip til I am old and grey!
    Maybe my kids would like to use it with their children.
    That’s one of the reasons I decided to go through with it. Even if my husband and I aren’t able to eventually go, my son will be able to take his friends with him, or even his own family someday. If not, I have no doubt we will be able to rent out our points for the years we aren’t able to go.
     

    jbreen2010

    Mouseketeer
    Joined
    May 19, 2020
    Hello Everyone,

    I would first like to say thank you!
    Thank you for existing to help answer my questions.
    I don't think I would have looked at DVC so seriously if this board was not available.
    So thank you very much!

    I am looking at DVC for VGC resale.

    I am trying to build up my charts and graphs for total value of a VGC purchase.
    My main comparison points are:
    Grand Californian (Deluxe view room) vs DVC 1 bedroom suite.
    Chart over the 40 years we have on the contract with yearly increases on both room rate and
    230ish points @213 a point is my guess. (Is this a good deal? I don't know...)

    Does anyone have any good chart templates I can start with?
    Has a value calculator been created yet to help jumpstart this process.

    There are TONS of different factors to this including:
    1) Relative price of same vacation retail vs DVC.
    2) Slow inflation of the DVC point purchase?
    (VGC @$214 a point pretty high, is there any room for the point value at VGC to increase?
    3) How much can yearly dues increase by? You think they can cap it? 5% year over year is a huge.
    4) How much can point increase go up by. Is there any time where you think 230 point isn't enough?

    I know a lot of this is a gut reaction to love we all have for disney, but I would like to put a qualitative "Value" to this problem.
    (Mainly because my wife is asking for the "value" proposition) :)

    In my "gut" I know this can save me money, but I would like to put a value to it.

    THanks,
    Rodriguez Fam.

    One thing that I just did to help me with understanding which contract to bid on resale was that I put together a spreadsheet that included total cost as of today for the contract (price per point x total # of points + closing costs + management fees estimated out for the life of the contract in today's dollars) / # of points for the contract overall. You'd be suprised something might look like a "good" deal because it's less $$ per point and slightly stripped of points for say this year, but this was helpful to compare a handful of resales.
     

    CastAStone

    Model Citizen. Math and business nerd.
    Joined
    Jun 25, 2019
    I am not sure of the scope and scale or the rental market.
    My aim is to find the point of intersection between DVC vs Retail of a similar room at the Grand californian.
    That point is where we can find value, and the point where Retail pricing outpaces DVC.
    Even at $211 a point, it will only take ~4 years until DVC starts starts to save money.
    As time shares go, that is a really short window of value.
    I am wondering if I am missing something in my calculation.
    Like I said, there’s no good way to pull Disneyland hotel costs without looking up every single day on the Disneyland website, so making a comparison at this point will be very difficult, especially with 2021 prices not available yet.

    If you aren’t familiar with the rental market, I would suggest you have more research to do before you buy DVC.
     

    CaliAdventurer

    To Hunger is to Live
    Joined
    Oct 27, 2014
    VGC is one worth considering resale. Because it’s so expensive and hard to get, later buyers tend to only use those points at VGC which lessens the pain of resale restrictions. If you’re buying VGC at 2020 prices to use at 7 months at WDW, you’re doing it wrong. Try fidelity, they are rare but you can still find a contract for 180, sometimes less.
     

    Nelson Rodriguez

    Madd_Hatter
    Joined
    Aug 4, 2020
    VGC is one worth considering resale. Because it’s so expensive and hard to get, later buyers tend to only use those points at VGC which lessens the pain of resale restrictions. If you’re buying VGC at 2020 prices to use at 7 months at WDW, you’re doing it wrong. Try fidelity, they are rare but you can still find a contract for 180, sometimes less.
    Thank you. VGC is our key purchase!
    Thank you for insight!
     

    RoseGold

    DIS Veteran
    Joined
    Jan 21, 2020
    Worth noting it is possible to get 1BR for a couple nights at VGC if you are flexible on dates using non-VGC points. I had one booked before all this happened with my cheap Saratoga points.

    Maybe not in the next couple years with all these extra points floating around, but it did at least used to be possible now and then.
     

    Deb & Bill

    DVC-Trivia Contest, Apr-2006: Honorable Mention
    Joined
    Mar 20, 2000
    When they say Member Fees can increase up to 15%, that is only operational and maintenance costs. It doesn't include increases in property taxes set by the locality, county or state. Anaheim could decide to make Disney pay for building a new location at DLR.
     

    crisi

    DIS Veteran
    Joined
    Feb 25, 2002
    The variables are going to be subjective.......how much risk are you willing to take - there will be a lot of members out points (and therefore value) over Covid - us included. Even prior to Covid, there was always risk - DVC cancellation policies are far more restrictive than cash, Covid drove home how little control you have. The other variable is that DVC WILL change your behavior. You think you will save money, but DVC wasn't designed by Disney so that its customers would spend LESS with the Mouse. You'll find yourself deciding to add on a small contract you can use at WDW. You'll find studios are nice, but that one bedroom is so much nicer. You'll take friends. Without a room bill, you'll find yourself spending more on dinner, experiences or souvenirs. You'll think that Hilton Head or Aulani look like a place you really want to get to. I think many, perhaps most, of us admit that DVC hasn't REALLY saved us a dime. It has, however, allowed us to bring family and friends, put the kids in a different room so we could enjoy some adult vacation time, travel to our favorite place more often, etc. If saving money is the most important thing, don't buy....buy because you think DVC (and understand the restrictions of DVC and the differences between a cash room and DVC) fits your family and you'll get more value for the dollars you do spend.
     

    Spark65

    Mouseketeer
    Joined
    Sep 27, 2019
    So what defines value for you?

    A) Is it totally on the cost with possible future gain
    or is it
    B) Memories, good times and happiness

    I only ask because I can't put a value on happiness and I always question the cost and money driven reasons for vacationing. To be honest given how expensive it can be to go to any Disney resort I have never seen it to show any dollar value but given the rock I feel lifted off me after any vacation Disney or otherwise that's all the value I need.
     

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