Cost Analysis......hmmmmmm

[jsivigny]

As noted, there are many variables and different ways to look at this issue. IMO, one should look at it as a stand alone financial issue to get a feel for the overall risks and costs though I'm sure we all realize there's more to it than that such as the investment in family. As for the questions above, one should seriously consider the dues. There is a difference in value to many between say SSR and BLT due to the 11 month window's and the difference in expiration, how much then becomes the issue and is it worth the difference to YOU. Here are a few principles I feel one should consider or at least that I would go by.

• I would not finance, no matter what.
• I would not buy owing other debts beyond a reasonable fixed rate mortgage (cars, CC, etc) that was no more than 50-70% of the current home value.
• DVC would need to represent a savings over what I'd spend for similar options and/or a significant upgrade for the same price to the tune of at least a 20% savings taking all reasonable discounts and/or increases into account AND taking into account the time value of the up front money.
• I feel comparing to rack rates is a fools comparison and doubly so using DVC rack rates UNLESS one would routinely pay cash for DVC or suites anyway.
• I would ONLY buy enough points to use at DVC, possibly with a mild cushion of 10-20% depending on specifics. For example, if you're looking at a week in a studio during off season or 5 days avoiding weekends, I'd definitely want a moderate cushion. Not so much if my focus is a week in a 2 BR during Magic or Premier season where you likely don't need a cushion at all.
• Buying to use for exchange options is an extremely poor and risky choice.
• SSR and possibly extended OKW contracts represent the best value at the present time (price vs RTU length and on property).
• BLT vs other dues differential will not last, at least to the degree that it currently is.
• HH & VB are poor choices in spite of the price differentials due to the lack of on property 11 month options, higher dues (esp VB) and risks to those resorts due to mother nature. However, there comes a price difference where the risks are worth it.
• I consider where I want to stay most trips but unless one will stay at a given location around 80% of the time OR one must routinely have a very difficult option (3 BR, concierge, BWV standard, AKV value, etc) it's likely best to buy the least that you're comfortable with which generally is the cheapest WDW option assuming mostly for WDW.
• DVC needs to pay for itself within NO MORE THAN 20 years taking into account reasonable worst case scenarios. Not the bogus calculations ignoring the time value of money and assuming inflation adjusted rack rates.

Anyway, my list (I'll likely think of others) to get you some additional food for thought. I realize these criteria mean that many here would not have bought DVC.

I was going to post, read this and decided that I couldn't have said it any better.

 

[Mississippian]

IMO many don't factor in the most important item. You are committing you and your family to a yearly Disney vacation. For many it can become a "we have to go or lose our points" kind of thing. Even if you pay the higher Disney cash price for a room as a non-member, you don't have to deal with getting rid of your points if you decide to take a year off.

When you add a couple of thousand dollars, (in todays dollars), per year for transportation, food, and admission, Disney and DVC ownership can be really expensive. In the past when and if you decided to sell, there were plenty of buyers and you could get back a good portion of your original purchase price, not so today for many of the members and it looks like it is only going to get worse.

Disney doesn't change much from year to year, after you see and do everything a few times, will you still feel the same Disney magic? Some do, but many don't.

Bill

Actually, you are only committing to a Disney vacation every three years if you bank and borrow with a smaller contract.

 

[crisi]

Actually, you are only committing to a Disney vacation every three years if you bank and borrow with a smaller contract.

Which is one of the reasons to consider inoculating against addonitis. Seems a lot of people follow a pattern.

1 -Fall in love with Disney
2 - Buy DVC points
3 - Add on DVC points so that EVERY vacation can be filled with Disney magic (and often so you can take friends, go more often, get in quickie weekends). Or add on because you want to have a booking window in Epcot for F&W, or they are opening up DVC at the Contemporary and you always LOVED that resort. Or you want to cruise with points.
4 - Get a little disillusioned with Disney (policy change, kids grow up, you find other places to vacation, whatever)
5 - Sell points.

If you have chosen a long term Disney lifestyle, and it happens, then having lots of DVC points makes sense. If this hasn't been a long term thing for you and your kids are little, tread cautiously. Not everyone ends up picking Disney as a long term lifestyle choice.

 

[normr]

A little over a year ago, thanks to owning DVC, I was able to provide to 19 family members an incredible celebration of my mom's 80th birthday. We had a grand villa and 2-two bedroom units and had an incredible memorable celebration, and now my mom's health has suddenly changed. I'm so thankful that I owned DVC and was able to do this for my whole extended family.

Every morning we gathered in the GV and made breakfast for everyone and at night we made some incredible desserts and great family memories and reminiscing.

Priceless- just like the MC commercial.

 

[Sandisw]

I know this is about cost analysis so I don't want to change the direction of the thread. However Canoe86 mentioned being stuck between BLT and OKW. I recently had a studio standard view for November for BLT that I booked exactly at 11 months at 9 am. Then at 9 1/2 months I wanted to switch to a 1 Bdrm Standard view and none were available. I did waitlist and it came through in 8 days, which I was happy about. However I was still well within the 11 month window and had to waitlist for standard view.

Not sure what numbers or how you will decide to determine your cost, but I agree with what others have said buy where you want to stay. What ever your home resort choice is you should never be disappointed that is where you end up if you can't get what else you wanted.

Good luck!

Which is why we spent an extra $5000 to buy BLT over SSR, resale. We used only a 10 year usage time (although we plan to use it much longer than that) and figured we really spent an extra $500 per year to own at BLT, so we could get those SV rooms for our summer trip.

It was well worth it to know we were where we wanted to stay. Because we travel in Magic season and will until I retire in 9 years, our point costs for BLT, SV, were comparable to the other places we would stay so owning was important.

When doing a complete analysis, I think you have to be realistic in terms of what you would spend as a cash guest vs. as a DVC member. That is what we did. We looked at what we had been spending against what we would and decided the upgraded rooms and the eventually savings was worth the risk of owning.

 

[canoe86]

The last week, we have had a lot of discussions about what we should do.

We have only stayed at Deluxe resorts, or DVC with 1 or 2 bedroom. Now we only travel in the late fall, so we have been getting good rates then, but it is still expensive. Expensive enough that DVC will save us money.

We LOVED OKW. We like BLT and with our small kids, it was nice.

It seems about equal over the life of the contract with OKW in the high 50s vs BLT around 100 considering current yearly dues. BLT gets a bit more expensive at 115, but you get the direct buy benefits.

Now the question has become, we almost never CONFIRM our trip until July or August for a November trip. School schedule, work etc help determine when and if we go. Will BLT have rooms that late if we buy there? We need a 2BR. Or will we end up at OKW....which is our preference.....no matter what?

 

[crisi]

Now the question has become, we almost never CONFIRM our trip until July or August for a November trip. School schedule, work etc help determine when and if we go. Will BLT have rooms that late if we buy there? We need a 2BR. Or will we end up at OKW....which is our preference.....no matter what?

Maybe or maybe not, but there is certainly no reason for you to own at BLT if you cannot book more than seven months out. And - quite honestly, there may be times when there is little available consecutively a mere three months out - you may get a two bedroom at SSR for two nights, a night at OKW, a night at VAKL, and three at SSR in order to make a trip.

The IF we go is also frightening to me. If you can't go, and you haven't banked your points, you'll lose them. If you don't think you can go, and you bank your points, you won't be able to user them. If you pick a good use year for your travel plans, you'll have more flexibility, but travel plans change over time (we used to go in October, now we have middle schoolers and go in August - between baseball and school that is our only window).

 

[chalee94]

i'd agree with crisi. my guess is that you would find DVC ownership pretty frustrating...

 

[Kidanifan08]

You have gotten a great bunch of feedback on this topic. When we purchased in 10/08 we did not spend much time researching the decision. We had a 2-year-old and knew we were going to spend a great deal of time with the Mouse. My brother-in-law, who is a fairly shrewd businessman, bought when OKW opened. He and his family have never regretted their decision to buy.

For us, having a 1 or 2 BR condo for our Disney trips is key. We just got back from 10 days at Coronado in a standard room. We had a great trip, with great weather, but we both got sick of the hotel room and junk stacked on every surface. On our last trip, we had a 2BR at Kidani for a week, which was fabulous!

If you are considering buying DVC, you obviously love Disney. You posted that you plan an annual trip. I don't think we would go annually if we could not have a condo. My brother-in-laws family loves OKW and we love Kidani. Go with the place where you want to stay on most trips and that will make you happy.

With that said, your 3-4 month booking window may be an issue with BLT and, if that is not going to change, you may want to cut your losses and go with a less expensive option. The maintenance fees will change and are certainly a variable; but it is like having season tickets for a college or pro sport -- if you love it, who cares what the cost is from year to year -- it's the cost of entertainment.

Good luck with your decision!

 

[lesabrowning]

So, you took your kids when they were 2 weeks old?

We did!! LOL

 

[lesabrowning]

So, you took your kids when they were 2 weeks old?

We did!! LOL

 

[rhettreaux]

That is a great way to look at it, Arthur06. An analysis of cost is worthless if you don't consider the value (beyond monetary value) of what you receive. I haven't found any other vacation that makes my kids smile quite so much.

It sounds corny, but I measure the value of pretty much anything in my kid's smiles. If I pour money into something that won't make them happy, then that is a poor investment. My kids are happy, happy, happy at WDW. That is how I know that I am getting my money's worth.

 

[psac]

With your tight booking window, I would buy OKW Resale. You'd save a bunch of money from BLT, and if it's the place you'd end up anyway, you'd be better off not paying double for no reason.

 

[peabody58]

...It sounds corny, but I measure the value of pretty much anything in my kid's smiles. If I pour money into something that won't make them happy, then that is a poor investment. My kids are happy, happy, happy at WDW. That is how I know that I am getting my money's worth.

It sounds corny, but I measure the value of pretty much anything in my wife's smile. If I pour money into something that won't make her happy, then that is a poor investment. My wife is happy, happy, happy at WDW. That is how I know that I am getting my money's worth.

 

[hellerjw]

It's always been an emotional attachment for us, even though its primarily a financial transaction. I look at it like any other hobby, the money is only the means to obtaining the emotional & mental enjoyment I get out of it. We have yet to find a vacation destination that gets everyone manically excited so far in advance and provides so much fun for the money once we are there. For us its the state of mind it puts us in much more than the cost outlay.

 

[LIMOGE7]

I find that it makes me happy to be in disney so cost overall is important but not the end all be all. Tammy

 

[mjc2003]

As new buyers, I went through this constant over-analysis. Finally I figured out that we should be able to make 10 trips over 15 years and stay in 2 BR's most of the time. Our cost over that time will be approx $32,000, including buy in and MF. With the 2 BR rack rate of about $700, we will get about 70 nights, or about $50,000 worth or rooms. (I realize these numbers will not stay the same, I am approximating). Sometimes these rooms will be discounted, sometimes they wont...it will balance out. If we decide to sell at that point, with our kids older and our needs changing, we might get back 50% of our initial buy in cost. Who knows. But we'll get something back. Tack that on to the $15-$18,000 we're saving on rooms, and it became a no-brainer.

I had a hard time looking at this over 30+ years b/c that's not my nature. BUT, 15 years is a clearer window. And if we keep it after 15 years, which we just might end up doing, then it's all gravy.

So look at a shorter window. How many trips will you take in the next 15-20 years? What kind of rooms will you stay in?

Another factor is affordability. We are not financing this purchase. If I didn't have the money to do this in the bank, I personally wouldn't do it. Again, that's just me; and I know people think differently, and I respect individual decisions. We don't spend a penny we don't have; we don't have credit cards (besides Amex) and we are admittedly weird about this!