Can someone help me with the numbers?

[KSR0330]

I'm trying to figure out if buying DVC is worth it for us. I just turned 50 and love Disney. DH tolerates it. My 2 grown boys and their significant others also love it. We've only starting going each year for the past few years, as we really couldn't afford it until then. It's about a 3 hour flight for us. So excited to be welcoming a grandbaby this winter! The 2 bedroom villa (at OKW) looks perfect to take the whole family down every year. I estimate I would need 200 points, so at let's say $95 per point that's $19,000. On top of that is the MF of about 1,500 growing to about 3,000 per year by the end of the 1942 contract. That's the part that kills me- the MF. I can rent points for about $2,800. I know that amount will increase, but will it increase that much that it's not cheaper in the long run to to just rent and not buy? Thanks for your input. I'm new to this and just trying to figure it out!

 

[bwvBound]

Buying vs Renting is not about saving money if one chooses to Buy. More likely, we choose to purchase to:

• Maintain full control of our own reservations; never worry that the party we are renting from might scam us or leave us without the promised reservation.
• Maintain options for cancellation. Most rented reservations come with a "no changes; no cancellations" policy.
• Enjoy the feeling of ownership and the shared camaraderie with fellow owners/members.
• and other reasons

 

[crisi]

The second one is probably the most significant. Members still have difficult cancellation policies that you should understand (for instance, if you borrow points for a reservation and need to cancel it, you can't "unborrow" the points), but when you start traveling with family, being able to change the reservation at least a little, and being able to put down the basis for being able to change the reservation is important. As I just posted - jobs get lost, babies get made, people get sick, and marriages fall apart.

Keep in mind that with young adults (if you just turned fifty, your kids probably are just young adults) their lives tend to have less flexibility - a new job can mean giving up vacation. A college friend getting married across country can use up all their vacation funds and vacation time for a year. Their isn't a lot of disposable income at that age, and airfare and park tickets can be a big cost to young adults.

Maximum flexibility comes from booking cash through CRO - where cancellation policies are the most liberal. Minimum flexibility regarding changes comes from renting points. Owning is in between.

 

[Disney Dad ADL]

If you are comparing renting vs owning the exact same accommodations, and you assume things will continue as they have been (Disney remains popular and Disney gets more expensive over time), then owning will be cheaper. You don't have to run any numbers.

However, it's still a risk to own, mainly because:

1. Disney could lose popularity one day - this would make their hotels cheaper and therefore your DVC ownership less valuable.

2. You could lose interest in Disney

3. The parks could get so expensive that you can't afford Disney vacations anymore even with DVC.

4. Annual Dues increases - as you mentioned, this may be a problem. However, as long as Disney's popularity holds up, I don't think it will be a problem. The value of DVC points will continue to increase along with the annual dues increase. Keep in mind that the cost of renting DVC will also likely increase if annual dues increase. If brokers do not increase their prices enough to keep up with annual dues increases, then they will not have any owners willing to sell points through them. But again, this all hinges on Disney being a desirable place to go.

5. Something happens to your finances where you can't afford your annual dues anymore.

 

[gharter]

There are calculators that you can find on the web to help you see financially if it makes sense.
However, in general DVC members tend to :
1. Make more freqent trips to Disney. Many DVC members travel more often then before joining.
2. Stay in a nicer room. We originally stayed at moderates, then moved to Deluxe resorts. With DVC, we started in studios, now love the 1 BRs. This isn't true of everyone, but reading from the board is a clear trend.
There is a lot of information in the stickies about DVC. Take your time and read through it to really understand it. We joined after 50, have 2 contracts and love it. YMMV.

 

[KSR0330]

Thanks for everyone's input. Definitely a lot to consider!

 

[MICKIMINI]

Another strategy may be shopping really hard...for instance there is a current listing OKW September UY with 280 points for $81 pp. Total is $22,680 plus closing. There is a savings of $14 pp ($3920) with 280 points for 2019 and 2020. If you have excess points (80 as you said you needed 200) you can rent them for about $1080 to offset MF's. You will likely find you will actually use all those points or you can bank and get a Grand Villa (we've done it with family several times)! As others have mentioned actually owning has its own satisfaction and you do have greater flexibility.

Remember renting costs will increase along with MF's through the years. There is lots of joy in planning these trips together If you have the extra cash in the bank, why not enjoy awesome, happy trips with your family?

OKW since 1996 30+ trips

 

[Deb & Bill]

Putting the entire family in one space sometimes doesn't work so well. Especially if there is a baby in there. Someone gets stuck in the living room in the sleeper sofa, while someone else gets the king bed in the master bedroom.

 

[KAT4DISNEY]

I'm trying to figure out if buying DVC is worth it for us. I just turned 50 and love Disney. DH tolerates it. My 2 grown boys and their significant others also love it. We've only starting going each year for the past few years, as we really couldn't afford it until then. It's about a 3 hour flight for us. So excited to be welcoming a grandbaby this winter! The 2 bedroom villa (at OKW) looks perfect to take the whole family down every year. I estimate I would need 200 points, so at let's say $95 per point that's $19,000. On top of that is the MF of about 1,500 growing to about 3,000 per year by the end of the 1942 contract. That's the part that kills me- the MF. I can rent points for about $2,800. I know that amount will increase, but will it increase that much that it's not cheaper in the long run to to just rent and not buy? Thanks for your input. I'm new to this and just trying to figure it out!

If you can consistently rent for $14/pt and the cancellation restrictions are not an issue then I'd say that there isn't a lot of reason to purchase. The cost of a 2042 contract to an owner is just a few dollars less than that. Both of those should rise - both rental prices but maintenance fees should too. Owning gives you some more flexibility and cancellation options but not owning also gives you flexibility that you don't get as an owner.

 

[KSR0330]

If you can consistently rent for $14/pt and the cancellation restrictions are not an issue then I'd say that there isn't a lot of reason to purchase. The cost of a 2042 contract to an owner is just a few dollars less than that. Both of those should rise - both rental prices but maintenance fees should too. Owning gives you some more flexibility and cancellation options but not owning also gives you flexibility that you don't get as an owner.

The the trip we took last month (rented points for a studio-Boardwalk view. It was awesome!) I got cancellation insurance. I believe it cost me about $60. There had to be a medical or family emergency to get the credit, but it gave me peace of mind, so it was well worth it.

 

[Frederic Civish]

I'm trying to figure out if buying DVC is worth it for us. I just turned 50 and love Disney. DH tolerates it. My 2 grown boys and their significant others also love it. We've only starting going each year for the past few years, as we really couldn't afford it until then. It's about a 3 hour flight for us. So excited to be welcoming a grandbaby this winter! The 2 bedroom villa (at OKW) looks perfect to take the whole family down every year. I estimate I would need 200 points, so at let's say $95 per point that's $19,000. On top of that is the MF of about 1,500 growing to about 3,000 per year by the end of the 1942 contract. That's the part that kills me- the MF. I can rent points for about $2,800. I know that amount will increase, but will it increase that much that it's not cheaper in the long run to to just rent and not buy? Thanks for your input. I'm new to this and just trying to figure it out!

I'd say you buy the DVC points at OKW (or consider AKL for something perhaps a bit more special, at a slight uptick in price) and don't worry about it. But then I'm an idiot, who bought 8 contracts at 3 different resorts and I want to add more.

If you buy at OKW, DO MAKE SURE YOU BUY AN EXTENDED CONTRACT, so it will expire in 2057 instead of 2042. The Extended Contracts are not going for that much more than the short contracts, and 38 years is a lot nicer than 23 years.

Here are what I consider to be important points to help with your decision:

1. Disney Hotel Rooms are going to keep going up in price. Most likely in about 15 years you will be paying DOUBLE what you pay today. But, once you buy DVC, your increase in price that you pay for your room will be a lot less. You will still have some increase in price because Membership Dues will go up every year. Usually, in the past, they have climbed slower than hotel price increases, but there is no guarantee.

2. If you buy on the Resale Market, you can get a price that appears to always be stable or going up slowly. Meaning, at any time, you can PROBABLY (ALWAYS so far) turn right around and sell it for what you bought it for. Let's say you bought it at $100 a share and used it for 10 years, and then sold it for $100 a share. You'd be WAY ahead. 10 years of nearly free vacations. And, truthfully, in 10 years, when there are still 29 years left on the contract, the price will probably be up 25%, to $125 a share. Resales means you probably WILL NOT LOSE MONEY. I actually think the value of resale contracts will increase quite a bit more than in the past, once people start to realize that a Riviera or Reflections contract, bought at Resale, will only get you into your home resort, but an OKW or AKL contract, bought at resale, will get you into about 12 other resorts. This will make it more desirable than a Riviera or Reflections resale contract.

3. If you decide you are not going to go, you can rent out your points for a decent amount. This will pay your Membership Fees (the great bugaboo of Timeshare, and the reason that almost all timeshares, except Disney go DOWN in price, dramatically, over time). And Renting might actually return a bit extra to you, just because you DIDN'T take the vacation. It would be like saying, "Hey, I usually take a vacation every year to the Contemporary, but this year I'm not going to do it, and, hey, look what happened! I got paid about 50% or the cost of the room for NOT taking a vacation. Kind of like a farmer getting paid to not grow crops.

I think from a Financial point of view, purchasing DVC should never be done as an investment, but, you are unlikely to every lose your money and very likely to get the benefit of the vacations PLUS all your money back, if you want to quit taking the vacations.

 

[mamaofsix]

This is our exact problem. Have tried crunching the numbers, and no matter how we swing it, DVC is just way more expensive than our usual accommodations (staying offsite in luxury villas with 5 and 6 bedrooms, their own pool, etc.).

I would love to stay onsite, but with a big family it's just so hard to justify when we can pay half the price to have twice the amount of space, more booking flexibility, and still deluxe accommodations by staying offsite...

Good luck with your decision!

 

[crisi]

This is our exact problem. Have tried crunching the numbers, and no matter how we swing it, DVC is just way more expensive than our usual accommodations (staying offsite in luxury villas with 5 and 6 bedrooms, their own pool, etc.).

I would love to stay onsite, but with a big family it's just so hard to justify when we can pay half the price to have twice the amount of space, more booking flexibility, and still deluxe accommodations by staying offsite...

Good luck with your decision!

I think you are smart. DVC only works if you start with "we NEED to be onsite." You might be able to work if you fly and the rental car costs and parking add enough to an offsite rental.....but if you are happy offsite, then any Disney accomodation comes at a huge premium that probably isn't worthwhile.

 

[KSR0330]

I think you are smart. DVC only works if you start with "we NEED to be onsite." You might be able to work if you fly and the rental car costs and parking add enough to an offsite rental.....but if you are happy offsite, then any Disney accomodation comes at a huge premium that probably isn't worthwhile.

I agree. I have friends who are perfectly happy staying off site, and save a lot of money. If that works for you, that's definitely the way to go.

 

[KSR0330]

If you buy at OKW, DO MAKE SURE YOU BUY AN EXTENDED CONTRACT, so it will expire in 2057 instead of 2042. The Extended Contracts are not going for that much more than the short contracts, and 38 years is a lot nicer than 23 years.

Since I'm already 50, I don't think I'd mind buying a 2042. If MF were to get up to $3,000 per year, I'm not sure my kids would want to pay that. They love Disney, but they aren't like me. They like value resorts .

If you decide you are not going to go, you can rent out your points for a decent amount. This will pay your Membership Fees (the great bugaboo of Timeshare, and the reason that almost all timeshares, except Disney go DOWN in price, dramatically, over time). And Renting might actually return a bit extra to you, just because you DIDN'T take the vacation. It would be like saying, "Hey, I usually take a vacation every year to the Contemporary, but this year I'm not going to do it, and, hey, look what happened! I got paid about 50% or the cost of the room for NOT taking a vacation. Kind of like a farmer getting paid to not grow crops.

That's a great point. I didn't think of that!

 

[KAT4DISNEY]

This is our exact problem. Have tried crunching the numbers, and no matter how we swing it, DVC is just way more expensive than our usual accommodations (staying offsite in luxury villas with 5 and 6 bedrooms, their own pool, etc.).

I would love to stay onsite, but with a big family it's just so hard to justify when we can pay half the price to have twice the amount of space, more booking flexibility, and still deluxe accommodations by staying offsite...

Good luck with your decision!

Yes, the numbers have never worked and I can’t see that thy ever would if you didn’t 1) have to stay onsite and 2) want to stay in a deluxe resort. You might come out even if you normally do moderates and would have an upgrade in accommodations. They’ve done some nice updates with the though in the past few years so it may not be that big of a difference in some cases especially if you want 2 real beds in the room.

 

[Lclark5678]

I'd say you buy the DVC points at OKW (or consider AKL for something perhaps a bit more special, at a slight uptick in price) and don't worry about it. But then I'm an idiot, who bought 8 contracts at 3 different resorts and I want to add more.

If you buy at OKW, DO MAKE SURE YOU BUY AN EXTENDED CONTRACT, so it will expire in 2057 instead of 2042. The Extended Contracts are not going for that much more than the short contracts, and 38 years is a lot nicer than 23 years.

Here are what I consider to be important points to help with your decision:

1. Disney Hotel Rooms are going to keep going up in price. Most likely in about 15 years you will be paying DOUBLE what you pay today. But, once you buy DVC, your increase in price that you pay for your room will be a lot less. You will still have some increase in price because Membership Dues will go up every year. Usually, in the past, they have climbed slower than hotel price increases, but there is no guarantee.

2. If you buy on the Resale Market, you can get a price that appears to always be stable or going up slowly. Meaning, at any time, you can PROBABLY (ALWAYS so far) turn right around and sell it for what you bought it for. Let's say you bought it at $100 a share and used it for 10 years, and then sold it for $100 a share. You'd be WAY ahead. 10 years of nearly free vacations. And, truthfully, in 10 years, when there are still 29 years left on the contract, the price will probably be up 25%, to $125 a share. Resales means you probably WILL NOT LOSE MONEY. I actually think the value of resale contracts will increase quite a bit more than in the past, once people start to realize that a Riviera or Reflections contract, bought at Resale, will only get you into your home resort, but an OKW or AKL contract, bought at resale, will get you into about 12 other resorts. This will make it more desirable than a Riviera or Reflections resale contract.

3. If you decide you are not going to go, you can rent out your points for a decent amount. This will pay your Membership Fees (the great bugaboo of Timeshare, and the reason that almost all timeshares, except Disney go DOWN in price, dramatically, over time). And Renting might actually return a bit extra to you, just because you DIDN'T take the vacation. It would be like saying, "Hey, I usually take a vacation every year to the Contemporary, but this year I'm not going to do it, and, hey, look what happened! I got paid about 50% or the cost of the room for NOT taking a vacation. Kind of like a farmer getting paid to not grow crops.

I think from a Financial point of view, purchasing DVC should never be done as an investment, but, you are unlikely to every lose your money and very likely to get the benefit of the vacations PLUS all your money back, if you want to quit taking the vacations.

I too am seriously considering buying resale. Your post is essentially the reason that I want to. Based off of history, I can sell this thing in 10-15 years and come out on top. It just doesn’t seem like a huge financial risk to me, despite having to put so much money down.

One thing hat has me nervous, is what resale value will do with the 2042 contracts ending. My gut tells me that with inflation, you can probably still sell for what you bought for... maybe even 20 years from now.

Any thoughts?

 

[Deb & Bill]

I too am seriously considering buying resale. Your post is essentially the reason that I want to. Based off of history, I can sell this thing in 10-15 years and come out on top. It just doesn’t seem like a huge financial risk to me, despite having to put so much money down.

One thing hat has me nervous, is what resale value will do with the 2042 contracts ending. My gut tells me that with inflation, you can probably still sell for what you bought for... maybe even 20 years from now.

Any thoughts?

Twenty years from now, the 2042 resorts will only have three years left on the contract. You'll be lucky to get $10-30 a point for them.

 

[Mickey of the Villages]

If you buy an OKW resale please consider getting one with a 2057 end date. The price is likely the same or close to 2042 and you get 15 more years of value. As for renting vs. buying . . . if we assume you can sell your contract at some point in the future then it is possible that if in 10 or 15 years you tire of going you could sell the contract and recoup part or all of the cost.

 

[Lclark5678]

Twenty years from now, the 2042 resorts will only have three years left on the contract. You'll be lucky to get $10-30 a point for them.

I agree with that, definitely. I was referring to the value of those with 2057 or later expiration dates