Cost Analysis......hmmmmmm

[canoe86]

BTW,

THANK YOU!!! To everyone who has replied and given me their perspective. I love reading these responses for the insight on how other people view this.

In response to the poster who mentioned analyzing every aspect.......I have a Chemistry and Math degree so I am VERY guilty of trying to find a single unified DVC theory.

Also, as another poster has mentioned, I don't want a point in the future to exist, where I look back on things I did not do, and find regret. Our memories as a family of our Disney trips are unforgettable. Even though Disney trips for our family tend to be expensive in real $ terms, the return on that money in fun and memories as a family is high.

 

[crisi]

Also, as another poster has mentioned, I don't want a point in the future to exist, where I look back on things I did not do, and find regret. Our memories as a family of our Disney trips are unforgettable. Even though Disney trips for our family tend to be expensive in real $ terms, the return on that money in fun and memories as a family is high.

Here is the thing with regret....with or without DVC will you look back on the money spent on your vacations and regret them? If this is your motivation - do a "regret ROI" - if I spend X over X years to get DVC vacations - how many years is X before my financial investment has been paid in emotional terms. But you probably won't regret the tickets, or the food, or the airfare....so how much "regret" is built into the timeshare purchase? Don't worry too much about dues or inflation or the value of points here or there. Whats the experience worth to you measure dollars to emotions? (all this assumes you are financially in a place where small dollar amounts like "tickets" and "airfare" will not later be regretted. )

Now, what is the likelihood that you will take those X vacations (or go to Disney those X years)? If you are looking at your place in life and saying "really likely - finances are sound, love Disney, can't see any reason - barring tragedy - why we wouldn't keep going" AND THE PROGRAM AS CONTRACTED WORKS FOR YOU - its a no brainer. If you look at X years and say "Well...we are looking at a probably reduction in income, and college for the kids is around the corner, and we think we will get bored of Disney" - then it isn't a good deal no matter how the numbers work.

For some of us, the day we sign the contract it became worth every penny. For us, we figured it was about three trips - every other year - or six years into our contract. Over on the "direct sales thread" I've said that we've past the point (after not quite ten years) where our initial investment has paid for itself in terms of value - and if I get $1 off eBay when I sell, this will have still been a "good deal" for us. Granted, I'd like to get more than $1, but I can't complain.

DO, however, UNDERSTAND THE PROGRAM. DVC is a TIMESHARE. A lot of people loose site of that in the pixie dust. You are more likely to regret in emotional terms if you thought you bought something you didn't (even if it was a good deal on paper). We've seen that over and over again here. Seldom, does anyone come back and say "I'm not happy with the way the numbers work" - although sometimes we get people who can no longer afford it (or couldn't when they bought, but gave it a go). More often, people are simply disappointed because they thought this was something it isn't.

 

[canoe86]

Well,

I will say this........the MAJORITY of the cost wrapped up into a contract is the yearly dues. Obviously.

SO, the question is when comparing BLT and OKW is, what is the value of OKW versus BLT over the same time period??

200 points contract.

Over the next 32 years.....OKW costs approx 11.63 per point if my initial buy in is at $60.

Over the next 32 years......BLT costs approx 11.22 per point if my buy in is at the current discount rate of $115!!!!!!!

SO, theoretically, at the end of 32 years, BLT seems to be the better value. Then, at the end of the 32 years, what stops me from just not paying dues and giving it up? (not that I would do that....just interesting comparison)

 

[JWG]

Maybe I am in the minority when worrying about the cost. I bought what I could afford and will/may add on when the budget allows.

DVC cost to our family...money

DVC return to our family... great family vacations!

My in-laws neighbor just passed away Sunday at the age of 63. I don't know when my time will come, but when it does, I want my wife and kids to know that they will always have memories of great times, and not a memory of a father/husband who was too worried about what things cost more so then what they actually gain!

Yes.

 

[crisi]

Well,

I will say this........the MAJORITY of the cost wrapped up into a contract is the yearly dues. Obviously.

SO, the question is when comparing BLT and OKW is, what is the value of OKW versus BLT over the same time period??

200 points contract.

Over the next 32 years.....OKW costs approx 11.63 per point if my initial buy in is at $60.

Over the next 32 years......BLT costs approx 11.22 per point if my buy in is at the current discount rate of $115!!!!!!!

SO, theoretically, at the end of 32 years, BLT seems to be the better value. Then, at the end of the 32 years, what stops me from just not paying dues and giving it up? (not that I would do that....just interesting comparison)

BLT will cost you how many more points to stay in though - if you go that direction you need to do it as "dues by room night."

So to get the same number of room nights at BLT, you'll pay more in dues - even using OKW points.

Also, it isn't uncommon for resort dues to be somewhat lower during the active sales period and see a bigger than normal adjustment once sold out. BLT has cheap dues (but in terms of dues per night, it isn't that much of a bargain), but those cheap dues may not be maintained long term.

 

[canoe86]

BLT will cost you how many more points to stay in though - if you go that direction you need to do it as "dues by room night."

So to get the same number of room nights at BLT, you'll pay more in dues - even using OKW points.

Also, it isn't uncommon for resort dues to be somewhat lower during the active sales period and see a bigger than normal adjustment once sold out. BLT has cheap dues (but in terms of dues per night, it isn't that much of a bargain), but those cheap dues may not be maintained long term.

Hmmmm, going to look into this raising dues at different rates.....didn't see that but wasn't looking.

I agree, BLT would cost more points per night, but if the initial cost is about equal, wouldn't buying BLT be a better idea for the flexibility of staying there?

We are between BLT and OKW btw.

 

[crisi]

Hmmmm, going to look into this raising dues at different rates.....didn't see that but wasn't looking.

I agree, BLT would cost more points per night, but if the initial cost is about equal, wouldn't buying BLT be a better idea for the flexibility of staying there?

We are between BLT and OKW btw.

If that is where you want to stay, that is where you should buy. If you are buying OKW to stay at BLT, you may discover that someday Disney restricts you to your home resort. Also, you shouldn't count on anything other than lake views being available 7 months out - so if your analysis is on value points at BLT, you'll pretty much need to own there (and even then, people have been getting shut out of those value rooms early).

 

[rutgers1]

I never did the math. Not interested in doing the math.

From a monetary standpoint, Disney is making out MUCH better than me. If I didn't own DVC, I'd probably go to Disney every other year, perhaps every third year...and in time when my kids were older, maybe every fourth year. I probably would have never stayed in anything but a moderate. My other vacations would have been cheaper, too, as I probably would have gone to the beach and local cities for the most part....Meanwhile, Disney not only gets my up-front money, but they also get all of the money I spend on park tickets, food, and other things. That is a lot more than I'd spend in most other venues.

On top of that, because I am now hooked (I admit it, lol), I am even taking the family down after I run out of points (borrowing ahead, paying cash, etc.)....which leads to more park tickets, more Disney food, more "other" costs.

BUT...................and this is a big BUT..............I really can't put a price on the times I have been having with my family. They have truly been magical. It has been worth every cent. I know that my kids are going to look back on their childhood and hope that they too can treat their kids to so many great times. For me, that is worth it.

I enjoyed going to Disney so much with my family that I took my wife there for my honeymoon. We enjoyed the honeymoon so much that we took our kids as soon as they were old enough to go. That trip was so good that we decided to go again, and again and again and again. Now, it's just who we are. It makes us happy ---- money well spent.

 

[khmiller]

We enjoyed the honeymoon so much that we took our kids as soon as they were old enough to go. That trip was so good that we decided to go again, and again and again and again. Now, it's just who we are. It makes us happy ---- money well spent.

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

 

[Sandisw]

If that is where you want to stay, that is where you should buy. If you are buying OKW to stay at BLT, you may discover that someday Disney restricts you to your home resort. Also, you shouldn't count on anything other than lake views being available 7 months out - so if your analysis is on value points at BLT, you'll pretty much need to own there (and even then, people have been getting shut out of those value rooms early).

I think this is very true and one of the reasons we did buy BLT, even though it was more, is that we wanted to be able to book at 11 months and pretty much give ourselves the guarantee that we would be able to book BLT.

In our case, the SV rooms are comparable points wise to where else we would stay in the summer (BWV, VWL, BCV) so having home resort advantage is key.

Matter of fact, I just made an Oct reservation, about 8 months out and SV rooms for that weekend were gone.

I agree that if someone wants to stay at BLT but buy elsewhere to possibly save upfront, they do need to use the points configuration for LV rooms. But in the end, as you said, they should buy where they want to be as it prevents disappointment in the membership, IMO, if things don't work out at the 7 month mark.

 

[mdsd8700]

Matter of fact, I just made an Oct reservation, about 8 months out and SV rooms for that weekend were gone.

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!

 

[crisi]

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!

Actually, I think that's really pertinent to the idea of cost analysis. If you don't understand the availability scenarios, it makes sense to think "I'll buy cheap points, with low dues, then I'll stay at BWV in a standard view room - or BLT in a standard view room." But as those that follow availability threads know - that is going to be a recipe for frequent disappointment. It might work sometimes, but very often you'll find yourself at seven months being able to stay MANY places - but the bargains will have been booked.

 

[crisi]

Hmmmm, going to look into this raising dues at different rates.....didn't see that but wasn't looking.

I agree, BLT would cost more points per night, but if the initial cost is about equal, wouldn't buying BLT be a better idea for the flexibility of staying there?

We are between BLT and OKW btw.

What you are looking for (and three resorts have opened since I've done my analysis) is a bigger than average gap for a year or two as the resort sells out. It doesn't ALWAYS happen, but dues starting out are estimated, and its in Disney's best interest to estimate them low when active sales are happening. Then they do a little catch up (although they still might remain comparatively lower) before leveling off to have similar increases to the other resorts.

 

[mdsd8700]

It might work sometimes, but very often you'll find yourself at seven months being able to stay MANY places - but the bargains will have been booked.

I never thought of it that way and I think that is an excellent point. Although we purchased BLT for the location, not really taking into the consideration the value accomodations anywhere vs. cheaper points however if someone is coming at it from that angle then this is definately something that should be considered.

 

[crisi]

I never thought of it that way and I think that is an excellent point. Although we purchased BLT for the location, not really taking into the consideration the value accomodations anywhere vs. cheaper points however if someone is coming at it from that angle then this is definately something that should be considered.

We are BWV owners who have spent several years in Standard View rooms over F&W. We don't own many points - but we don't need to - we usually book bargain rooms at during low point seasons. Not owning many points = lower buyin and cheaper dues vs. owning more points for more expensive units.

If you like OKW, you can get OKW dues, their large rooms, and their low points and be a happy camper - but if you own OKW and love BLT - don't count on those SV rooms being available.

 

[Dean]

Sitting down tonight to really look at the TRUE cost of DVC.

I know a bunch of you have done spreadsheets, so I have a couple of questions/comments.

First, shouldn't a true analysis take into consideration rising dues? I tried to do this by raising mine ROUGHLY 4% a year over the life of the contract, then adding that money back on to the original purchase, then divide by total points for a cost per point of the life time of the contract.

Second, shouldn't the value of the points be taken into some sort of consideration? ie 200 BLT points get you less than 200 SSR. I tried to address this by cost as percentage of BLT, using comparable room type point cost. I used BLT since that is the one Disney is currently pushing.

Of course I'm making an assumption of ownership until contract expiration.

Hmmmmmmm

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.

 

[Jason@dvcstore]

I want my wife and kids to know that they will always have memories of great times, and not a memory of a father/husband who was too worried about what things cost more so then what they actually gain!

Jason

 

[katied]

Maybe I am in the minority when worrying about the cost. I bought what I could afford and will/may add on when the budget allows.

DVC cost to our family...money

DVC return to our family... great family vacations!

My in-laws neighbor just passed away Sunday at the age of 63. I don't know when my time will come, but when it does, I want my wife and kids to know that they will always have memories of great times, and not a memory of a father/husband who was too worried about what things cost more so then what they actually gain!

I did the same sort of "analysis." We had to money to pay upfront when we first bought in, and again when we added on BLT. I know there are less expensive ways to visit WDW than thru DVC, esp. since I only book 1 or 2 bedrooms. But what I'm getting are priceless family memories (in the comfort of a condo vs. crammed into a single hotel room). Plus, I used the money inherited from my mom for our first DVC purchase (and WDW was her favortite place in the world, and the last vacation I took with her before she passed away. I know she would be thrilled that I'm passing her love of Disney on to her grandchildren - and DVC gives me the ability to have my sister and brother join in on trips at times, or so on their own trips with their families).

So - mine was an emotional decision, not a rational decision. I know and understand that, but the key for us was it was a luxuary we could afford.

 

[perfectparanoia]

The key for me was comparing it to what I would have been paying for anyway. When we bought in, there was no way to not stay in the same room as your kids except with a DVC purchase (there are now all star suites though staying at the all star is not my idea of a vacation). I don't want to sleep in the same room with my kids (I tolerate my husband).

So, we would have been paying cash for a 1-br at OKW at minimum. It doesn't take a lot of assumptions for us to break even vey quickly when even discounted, the room costs 1961 in the low season (2413 without the discount).

ETA: the discounts aren't going to last forever. The great recession will end.

 

[FindingFigment]

the discounts aren't going to last forever. The great recession will end.

I haven't been around long enough to know what it was like before the recession and before all of the room discounts and free dining, but I've read many comments like this here on Dis and it's part of what helped me decide to buy now. I do like the discounts. But if it's possible they will thin out, then I'm happy to lock into a price now.