Cost per point for BLT, amortized. Not cheap.

[bookswin]

I have figured the cost per point for BLT.

To make the math easy, assume 100 points @ $107. Amortized over 50 years at 6%, it's $56.33 a month, so that's $675.96 a year. Add $367 in annual fees and you are at $1043.

So that's $10.43 per point per year in cost as of today, with maintenance sure to increase.

Similar calculations with good DVC resale contracts, valuing "leftover points" at $10 and noting the shorter contract life, can sometimes get you down around $8 per point per year or even less.

That AKV deal last August when they opened "Doorway to Dreams" was incredible compared to this.

Not sure if I want to jump on this deal if there are no incentives.

 

[Anthony1971]

With BLT one would need to stay there most years to make it worth the buy in etc. If you figure the cost to stay at AK cash and the cost to stay at CR cash you will most likely find CR the better value in the end.
A lot of people put a value on location which is missing from your math.
Yes some may value AKV more than BLT that is a personal choice but in the end Disney has been able to get a huge premium to stay at the 3 resorts near MK over any other. I fell this will be true for BLT as well.

 

[vascubaguy]

I'm not sure I agree with the calculations. Why are you adding in 6% amortized over 50 years? I would only do that if I were comparing it to an financial investment and that isn't why I bought DVC.

Rather than adding in interest, I simply look at the point values.
100 pts at $107 each = $10,700
100 pts per year for 50 years = 5,000 points

10,700/5,000 = $2.14 per point

Rounding up the MFs to $4, you'd be around $6 per point.

For those who finance the purchase, of course they'll have interest to add in too, which could be tax deductible and even complicates the math more.

 

[Mike©]

I have figured the cost per point for BLT.

To make the math easy, assume 100 points @ $107. Amortized over 50 years at 6%, it's $56.33 a month, so that's $675.96 a year. Add $367 in annual fees and you are at $1043.

So that's $10.43 per point per year in cost as of today, with maintenance sure to increase.

Similar calculations with good DVC resale contracts, valuing "leftover points" at $10 and noting the shorter contract life, can sometimes get you down around $8 per point per year or even less.

That AKV deal last August when they opened "Doorway to Dreams" was incredible compared to this.

Not sure if I want to jump on this deal if there are no incentives.

Sorry but crunching numbers usually doesn't involve so much assumeing. At best your numbers are a good "guess".

 

[bookwormde]

There are lots of ways to figure the point cost of DVC points, but the methodology used by Bookswin is one of the most valid I have seen. The only real assumption is the rate of return that the up front money would have made at a zero risk investment. I figure more like 4% (recent historical treasury). If you knock the interest rate down it puts the point cost down to more typical ranges (around $8/pt). For those who finance the cost per point is really high.

bookwormde

 

[keishashadow]

as for me, i just keep thinking how the nearly $450 nightly rate for the MK view @ the CR prevented us from visiting this October

fyi, was able to book same weekend 2 years' ago for approx $100 less via AAA

still crunching my numbers, yet strong motiviation to at least buy & then resale 10 or 15 years down the road (based on our expected usage)

 

[MikeyNS]

Personally if I was worried about the $$$ I wouldn't be buying into ANY DVC right now. Glad I purchased with cash when I did where I did. The memories that DVC provides me and my family are priceless.

 

[bookswin]

I'm not sure I agree with the calculations. Why are you adding in 6% amortized over 50 years? I would only do that if I were comparing it to an financial investment and that isn't why I bought DVC.

Rather than adding in interest, I simply look at the point values.
100 pts at $107 each = $10,700
100 pts per year for 50 years = 5,000 points

10,700/5,000 = $2.14 per point

Rounding up the MFs to $4, you'd be around $6 per point.

For those who finance the purchase, of course they'll have interest to add in too, which could be tax deductible and even complicates the math more.

Because a dollar today is worth a WHOLE LOT more than a dollar will be in 50 years. What did a dollar buy in 1958? This is elementary economics.

You have to discount today's purchase by some amount because the "deal" is over decades. 6% is roughly what it costs you to borrow money for a 30-year mortgage, and so is one of the best proxies. Whether you finance or decline to finance, the money is still tied up for a LONG TIME.

You could also use the rate you could get loaning your $10,700 out safely, the 30-year Treasury bond rate, which is 4.07% as I write.

I don't see how my example has "too many assumptions", either. The only assumptions are the interest rate and the annual fee. Adjust either if you like.

 

[Snurk71]

I have figured the cost per point for BLT.

To make the math easy, assume 100 points @ $107. Amortized over 50 years at 6%, it's $56.33 a month, so that's $675.96 a year. Add $367 in annual fees and you are at $1043.

So that's $10.43 per point per year in cost as of today, with maintenance sure to increase.

Similar calculations with good DVC resale contracts, valuing "leftover points" at $10 and noting the shorter contract life, can sometimes get you down around $8 per point per year or even less.

That AKV deal last August when they opened "Doorway to Dreams" was incredible compared to this.

Not sure if I want to jump on this deal if there are no incentives.

What do you say when not comparing to resales? Using your numbers, let's say you could get 6 nights in a studio on those 100 points. $1,043 divided by the 6 nights is $174/night. That looks like a real good rate compared to what cash rooms are at CR.

I'm analyzing an initial 160 point buy (using a more conservative 4%, across 9 nights), and I get a nightly comparitive rate of $158. That looks like a good deal compared to $300/night regular room rate.

 

[jade1]

the "deal" is over decades.

the money is still tied up for a LONG TIME.

.

Anything can be said at this point. Maybe the deal isn't over decades for many buyers-just look at SSR resales and even AKV resales only 1 year later. What if the economy turns around in 2 to 5 years and BLT becomes incredibly popular, and resale prices increase close to what many on here had heard they would start at ($140 to $180)? What will your elementary economics say then?