Convince me DVC isn't a money pit

[javamom]

You can only bank the points for one year, and you have to bank them before the banking deadline. If you wait too long to bank, you cannot bank. Once you have banked points or borrowed points, you cannot reverse the transaction. They must stay banked or borrowed into whichever use year you moved them to.

The max you could use at any one time is 3 years worth as follows: Previous use year's points banked forward, current use year's points, and next use year's points borrowed into current year.

You can bank your points every year, but you will have to use them by the end of the use year that they were banked into.

As to whether 150-160 points will be enough, I am not sure because it would depend upon when you wanted to stay. You will need to consult a points chart to be sure. Do you have a link to one? There's one here at the DIS http://www.wdwinfo.com/resort/dvcpoint.cfm

 

[AdamsMum]

Money Pit? I guess...but WDW was already a money pit for us when I decided to buy my first points in 2007.

I was talking about it to 2 friends at work and they were exclaiming over how much I spend at WDW. One of my friends owns a rather large boat; we're talking renting a berth at marina, insurance, gas, maintenance, taking it out of the water for winter. I was getting into defending my addiction, when my friend stopped and said "It's your boat!". I said "Exactly". Ever since then its been known to us as "my boat".


Yes its a money pit but a really satisfying one.

 

[crisi]

So would 150 - 160 at AKV, alternating 1 bedroom and 2 bedroom every year for a Sunday - Thursday stay be enough over the course of ownership. Also, how long can you bank points and can you keep banking and banking? For instance, let's say I need to use only 100 for a 2009 trip, but I have 100 banked for 2008. Can I use the 2008, and bank the 2009, and in a sense maintain a surplus.

It takes a little planning and thinking. Open up a spreadsheet and the point charts and run through five years of "potential trips" - by the end of that - with the rules in mind that you have to use banked points the next year, you'll get the hang of it.

If you always run a surplus, eventually you'll need to use or lose points. You can take an extra trip or a longer trip, bring guests, rent them, give them away, or use them to do something non-DVC. But you can keep moving a few more points from year to year if the surplus is small for a long time before the burden of an extra trip comes up.

 

[chalee94]

I think you missed my initial point. My point is once I buy the initial set of points for a five night vacation, will I have to keep buying more and more points in the future to continue that because of point increases?

...would 150 - 160 at AKV, alternating 1 bedroom and 2 bedroom every year for a Sunday - Thursday stay be enough over the course of ownership?

it depends.

if you travel for 7 nights at a time and are flexible in what time of year you travel, i would say "point increases" would not be an issue. DVC can't raise point costs for the resort as a whole - an increase here has to be offset with a decrease somewhere else.

but since you are focused on sun-thurs stays, i'd say it's a little more of a concern. DVC could decide that too many people are avoiding weekends and continue to even out the cost between weeknights and weekends. (OKW used to cost 7 pts/night for a studio - now the minimum is 9 pts/nt...but that did take place over 2 re-allocations around 15 years apart.) but it is very possible that this management team will decide to push weeknight costs up over the next 4-5 years or so (the max increase is 15% per year, IIRC).

Also, how long can you bank points and can you keep banking and banking? For instance, let's say I need to use only 100 for a 2009 trip, but I have 100 banked for 2008. Can I use the 2008, and bank the 2009, and in a sense maintain a surplus.

if you have a 160 pt contract, you can bank up to 160 current year pts. so if you use 110 pts one year and bank 50 pts...the next year you can use the 50 banked pts and 60 current pts, and bank 100 pts...and so on...but you could never bank more than your 160 current pts.

(also, it is very difficult in practice to maintain a surplus... )

 

[crisi]

60 current pts.

(also, it is very difficult in practice to maintain a surplus... )[/COLOR]

No, it really isn't. We have a small contract and have been in that "we have to take a trip, extend a day, or take guests" position more than once in less than ten years. But our needs are for infrequent trips at low point times of year. And the "big trip" we were hording points for got postponed, which put us in an "extra trip" position.

 

[BWV Dreamin]

Thought I would share the experience I have from some clients. This scenario is not for everybody and only recommend for a small few. I have some clients who buy (pay cash) double the points they want to own, rent out half of them (typically not through the disboards as they feel they can get $12 to $13 elsewhere), and they plan to sell after they use for 10 years.

Example: Buyer buys two 200 point listings at Saratoga Springs for $68 per point and closing costs of $475 on each one. Total cost is $28,150. The dues on those points for 10 years will say is $17,360 (although that is simply taking 400 points x $5.00 per point so will be more). Total cost with dues is $45,510 (again most likely will be more).

They rent out 200 of the points each year and we say for only $10 per point. This gives them back $20,000.

Their plan is to sell the 400 points after 10 years and expect to sell for same price they purchased (no guarantee they will do that). After you take out the commission they pay along with the $70 to Disney (this may change over 10 years) they then put back $24,410 in their pocket.

Spent $45,510 over ten years and after the 10 years received back $44,410. This people feel they spent around $1,100 total (number for example but could be more and could be less) and were able to use 200 points each year for their vacations.

Again these clients are rare and typically come about because they call and say "my friend is doing this." For those people who want to spend the time to rent out the 200 points each, have the cash to buy double the points at the time of purchase and for those who don't will hold onto the DVC forever. This clients typically think once their children reach a certain age they will then change how they vacation so will sell. Also their is the risk that there is no guarantee how much DVC will sell for in the future.

Also be advised that Disney really doesn't want anyone renting out their points. They really don't want anyone "profiting" from a product they are selling. They would prefer that you simply use the points for your own use so if that bothers you then not for you as well.

Hope that made sense.

Jason

This is exactly what I am doing!! Although when the 10 year mark comes, I'll have to evaluate if I'm going to sell or not.

 

[jar]

I actually think Jason's idea doesn't really work. As another poster noted, spending $45K today and getting back $44K in over 10 years is a big "loss," not merely $1,000. It's all about the time value of money (think about it this way -- if you borrowed the $45K, you'd be paying $2-3K each year, or $20-30K in finance charges over 10 years).

So the question is whether you get sufficient use and enjoyment out of it to cover that loss.

 

[dmoore22]

As the old economists say, "There's no such thing as a free lunch." To our family it was definitely worth it to take the plunge and buy a resale. Then we bought a second resale. We were lucky with our first one which included a years worth of banked points. The second one the seller paid the first years' dues. We originally visited WDW with our kids (all 6 of them) at the Value Resorts. When we purchased DVC we discovered that the cost of our vacations stayed the same but we were staying twice as long. Plus we found another property tax deduction in the form of the year end statement. And then there are the DVC park discounts.

We're not quite an empty nest but, as the kids move out and start their lives, we are staying in smaller DVC accommodations with the ability to take several trips a year to WDW. The DVC discounts for tickets, etc. offsets some of the other expenses.

I'm now retired and my wife will be able to in a short time. We don't look at it as a money pit at all. The return on our investment is not the cash but the pleasure we get each time we visit the World. Can't wait for X-Mas!!!

DVC --- Priceless!

 

[famgel]

As the old economists say, "There's no such thing as a free lunch." To our family it was definitely worth it to take the plunge and buy a resale. Then we bought a second resale. We were lucky with our first one which included a years worth of banked points. The second one the seller paid the first years' dues. We originally visited WDW with our kids (all 6 of them) at the Value Resorts. When we purchased DVC we discovered that the cost of our vacations stayed the same but we were staying twice as long. Plus we found another property tax deduction in the form of the year end statement. And then there are the DVC park discounts.

We're not quite an empty nest but, as the kids move out and start their lives, we are staying in smaller DVC accommodations with the ability to take several trips a year to WDW. The DVC discounts for tickets, etc. offsets some of the other expenses.

I'm now retired and my wife will be able to in a short time. We don't look at it as a money pit at all. The return on our investment is not the cash but the pleasure we get each time we visit the World. Can't wait for X-Mas!!!

DVC --- Priceless!

Maybe this is a stupid question but I believe you were referring to DVC when saying "Plus we found another property tax deduction in the form of the year end statement."? Can you deduct a portion of the property tax on your DVC?
Thanks, just wondering!

 

[Dean]

I think you missed my initial point. My point is once I buy the initial set of points for a five night vacation, will I have to keep buying more and more points in the future to continue that because of point increases? Of course anything and everything beyond the necessities in life is a money pit, but I don't want to end up with something that I am going to have to keep pumping an additional 1000 - 2000 every other year into beyond the maintenance fees in order to keep that amount of vacation. I was wondering if people have to keep adding in additional points beyond the initial purchase.

As asked, DVC cannot increase the points. What they can do is rearrange them which could result in a modest change and this has happened a couple of times over the years including this year. S-F went up as much as 20% for some but others had a comparable decrease. Those looking at full weeks stays saw very little change in most cases. I've always recommended buying a cushion of around 10% for those looking mostly at less than a week, smaller units and lower seasons.

To boil it down to the basics, Disney is a money pit in general. DVC is a money pit if it doesn't fit your needs or use patterns (mostly weekends for example) or you would otherwise stay off property. For those that stay in a moderate and not go heavy on weekends, DVC is likely to be break even at worst and you'll get more for your money in the long run. For values, it'll be more but may still be worth it from a value standpoint. OTOH, one can stay off property is resorts as nice or nicer than DVC for pennies on the $$$ compared to buying and in many cases, can trade into DVC through RCI for much less as well.

Maybe this is a stupid question but I believe you were referring to DVC when saying "Plus we found another property tax deduction in the form of the year end statement."? Can you deduct a portion of the property tax on your DVC?
Thanks, just wondering!

You can deduct all of the taxes portion.

 

[famgel]

OK, thanks I don't think DH knew that and I can assume we get a statement from DVC at end of year, or do we have to request it?

 

[javamom]

OK, thanks I don't think DH knew that and I can assume we get a statement from DVC at end of year, or do we have to request it?

I believe that it shows the amount of taxes that you paid in your annual dues statement that DVC sends each January-ish.

 

[FindTheMickeys]

Not only that, but if you financed through DVC as I did, any interest you paid on the loan - it is considered a second/vacation home - is also tax deductible I get a 1099 at the end of the year showing the interest that I paid. NOW, since I have paid off my loan, I have lost that deduction but it was great while it lasted

 

[dmoore22]

Just getting back to the old CPU. I see that other DVCiers have answered the original question regarding property tax deductions, interest deductions, etc. Did anyone mention the interest deductions if financed using a home equity loan? Isn't it wonderful? Dare I suggest that we DVC members are the Imagineers of tax deductions (totally legal) when it comes to rationalizing our memberships?

 

[wildernessDad]

Yes, it is receptacle for your money.

It forces me to go on vacations.

We just went to Kidani and saw the Okapis and red river hogs! Those little guys were cute, running around! This December, we're going to VWL with our grand daughter (and her mom's coming too).

So, while you will spend money on food and tickets, the money you spend on purchasing the DVC membership does not go immediately down the tubes. You can sell at a future date. You may lose money on the sale, but it probably won't go to zero, but if it does, then you've probably used it enough to get the worth out of it.

 

[dmoore22]

Having a daughter who has changed her major three times, going on year six in college, no end in sight -- now that's a Money Pit! DVC, a Money Pit? Not as much.

 

[ToddyLu]

DH and I jumped into the pit back in June. We love it down here and think the accomadations are awesome. One man's boat is another man's Rolex...a luxury purchase that pit is.....hope we never have to come out of it and would love to "live in it all the time". Infact MIL and BIL are jumping into the pit with us tomorrow.


I'm outta here, leaving for AKV in 15 minutes for 9 nights.....woooohooooo...

 

[Dean]

Just getting back to the old CPU. I see that other DVCiers have answered the original question regarding property tax deductions, interest deductions, etc. Did anyone mention the interest deductions if financed using a home equity loan? Isn't it wonderful? Dare I suggest that we DVC members are the Imagineers of tax deductions (totally legal) when it comes to rationalizing our memberships?

While it can be deductible, it's not necessarily for everyone. Having it as a home equity loan should make the interest deductible in most situations. For example, I don't believe that those that financed through Tammac were deductible. And those that own a second home likely cannot deduct the DVC interest in many situations.

 

[rentayenta]

Having a daughter who has changed her major three times, going on year six in college, no end in sight -- now that's a Money Pit! DVC, a Money Pit? Not as much.

 

[normr]

My belief is that members forced DVC to reallocate the points by staying Sun-Thurs. and checking out on Friday and Saturday and staying elsewhere for cash and then coming back on Sunday when points dropped again. There were probably alot of empty rooms on weekends.

This is just my opinion.