Curious? Do you factor in buy in costs to figure out how much each DVC vacation cost?

[edk35]

On another thread this was discussed and I asked the OP if she would mind if I posted this. She did not mind and she said I had her blessing. We don't do this. Our DVC is paid for. Sure we have our MF but I don't include that in my vacation totals. It is just something that gets paid. We just figure out how much we need to for airfare, food/dining/ park passes and extra spending moola. However she factors in the vacation cost by her initial purchase cost. So it got me thinking that maybe many DVC folks do this. So I am throwing this out there to see.

She explained it to me when she wrote this. Buy in is the amount that the initial purchase cost, so for us with our contracts of 360 points we are at $39,000 CDN (exchange fluctuations put us at this amount). Then, you have to add in yearly dues, so to get a total cost for each vacation, we add our buy in amount (you divide the totals by the amount of years on each contract), plus our yearly dues = total vacation cost. Our contracts are paid for, so the buy in amount doesn't come out of our pockets each year, but we feel it's important to include as it's the only way to see how much each vacation truly costs.

Maybe I am in the DVC minority with this. Thanks

Here is the other thread for reference: http://www.disboards.com/showthread.php?t=2474140&page=5

Start at about post #62 to get the background. You can also read her first post, but then I would skip all the others until you get to 62.

LET"S GO!!!

 

[Starr W.]

Hey Denise

What I did when we first purchased our DVC points in late 2006, was run a financial analysis of it. Yes I got very MBA ish with cost of capital(since DH and I are both MBAs), using time value of money, cost of capital, actual rack rate of a 2br at SSR(I'm a condo/villa vacation girl, we always had rented those types of accomodations).

I would post my spread sheet but it was on the laptop that died.

I used a fairly high cost of capital and a fairly aggresive rate of increase on MF's. Luckily DVC MF's have been increasing at a fairly reasonable rate compared to my Starwood TS. That's a .

I was in a positive cash flow by year 6-7 in my analysis. If I didn't get that sort of payback I wouldn't have bought.

 

[cseca]

For each accommodation cost I always factor in everything. Means, initial buy in and annual dues. That's how I justify our ownership...
Food, transportation, kennel, airport parking, souvies are additional costs that'll be there regardless of where we go. So I don't count that against specific DVC ownership.

Annual Pass/park tickets are the gray area. If we go somewhere outside of disney we won't have to buy AP. BUT we most likely will have to get other attraction tickets. May it be aquarium tix, museum tix, etc. . That's why it's gray.

edited:
The more I think about it the more I feel the need to clarify.
It depends on what is the purpose of the calculation.

I will include initial buy in for these purposes:
1. Figure out the WHOLE cost of the trip
2. Figuring out if DVC ownership is still worth it.

I will not include it if all I wanted to do is figure out how we could do a disney vacation as cheaply as possible.
Since I can't get back the initial cost without renting my points. Which means I will be out of points, can't stay on a dvc resort, have to stay in a regular resort and that just defeats the purpose of owning dvc...

 

[acourtwdw]

Honestly, we didn't put that much thought into it. We wanted it- we bought it. We love Disney and DVC is the perfect way for us to vacation

 

[jodifla]

Nope. Paid mine off 10 years ago. It's a sunk cost, and I don't factor it in. And in fact now that it's paid for, I consider it an asset. At this point, I don't even factor in member dues, although I keep an eye on them. They are built into our budget.

I just concern myself with how much money I need to come up with to take my next trip: transportation, food, tickets.

 

[chalee94]

yep - i want to know what value i'm getting, so i take the initial cost into account.

i start with total points over the next 30+ years divided by the cost of the contract in 2007 and get $2.69 per pt in 2007 dollars. then i factor in an assumed interest rate to roll forward the cost of the pts into 2010 dollars and add that to the 2010 annual dues to figure out my cost per night.

 

[Starr W.]

To continue.

Do I sit and budget my "room costs" for each DVC trip? No. I don't really do that for any of my timeshares because I have the MF's budgeted in my yearly household budget(ie travel accomodations) I know when I'll be cash positive on my DVC purchase, to me that is more of a sunk cost. My other TS purchases were resale and purchased for a song so I just consider them sunk costs also and just use the MF's/exchange fees to calculate my room costs.

So I just really angst over airfare, ball park my food budget, debate on a rental car.

 

[nolanboys]

We just bought a resale contract a couple of months ago. DH did the spreadsheet - he's the math guy - and figured in the purchase price along with MF's and compared that to trips every other year rotating between a 2 moderate rooms and then a 2 bdrm dvc room (what our pattern has been). We were even after 8 years. I now come to realize that we can go every 18 mo. with our 200 pts - instead of every other year if I watch how I use our points. Our break even point will be less now.

DH and I are going alone this October. Staying in a 1 bdrm st view at Kindani for 3 nights and then a preferred view studio at BWV for 2 night. I took our points total and proudly told DH that our room was only costing us $522 - a steal. He promptly asked me if I had forgotten about the all the money we dished out for our contract. Oops! I forgot about that!

 

[crisi]

We don't really figure trip cost anymore. I have no idea how much meals cost us last time we went, nor am I busy budgeting for this time - we'll just spend it. I don't even know what my dues were this year - I could look it up.

But, I'm an accountant by training. If you are going to figure trip costs "right" you are going to amortize your purchase price over the years of the contract. Otherwise you don't have any idea what the cost of capital is.

But while there is a "right" way to do this if you were figuring ROI out for a company, there is no "right" way to value DVC as an individual. Figure your costs however it makes you comfortable. Unless you enjoy doing TVM calculations, after you bought, its pretty much an intellectual exercise anyway.

 

[El&Asmom]

Nope. We don't budget much for our trips. DVC is very close to being paid off with 2 years of financing, (no flames please, it still worked out to finance for two years over paying CRO for trips we would have taken anyway).
We find the cheapest airfare we can find, and decide what where we want to eat for TS during the trip. We then go with the flow. We'll bring some lunch stuff to the parks, or eat CS if we feel like it. If we have a TS scheduled and feel like eating in the vila, we cancel our TS ressie and make some pasta for dinner. We have been eating more meals in the villas in recent trips, because TS at WDW isn't as important to us as it used to be. We feel like we have done most that we want to do, and have great restaurants here in Chicago. We just revisit old favorites and try something new most trips.

I don't divide out DVC buy in and MFs on a per night basis. We just decide when we want to go for how many nights planned out a few years in advance. Then we alter it as our booking window comes up. It would drive me insane to budget to the penny. This is vacation after all. If I want a Dole whip, I'll get a Dole whip, even if it's not in the budget.

 

[BEASLYBOO]

I pinched pennies and saved & paid up-front for DVC, I personally didn't want to finance my vacations. The basic DVC purchase of points is paid for and out of the way, I haven't given it another thought since. I didn't buy in because I thought it would save me money, I bought DVC because I loved being on-site and I really loved trying different resorts. I plan each vacation with whatever money I have at that particular time, sometimes it's more, sometimes it's less. I don't add it up or break it down every vacation. In a nutshell, I bought DVC to enjoy myself at Disney w/ my family and friends and to not have to worry about the accomodations, I know those are already covered for years to come.!

 

[kirstenb1]

Nope. DH and I bought in back in 1993 at OKW. At that time, he calculated it would take at most, 7 yrs to recoup our investment, and then just look at annual dues as the cost for accomodations.

Ironically, I'm pretty frugal for someone who doesn't like to closely look over these details. We eat counter service lunches, and just go all day. Then I cook dinner, or we eat someplace cheap offsite. We bring all snacks/beverages, since we drive down.

However, I do try to keep an eagle-view of the overall costs. If dues went up significantly, or park tickets just became crazy, I'd be the first person looking at a possible sell-off.

 

[staceymay00]

We are fairly new DVC members and purchased a resale contract without financing, so buy in cost is paid in full. Before we purchased I ran numbers comparing the cost of DVC over the years (buy in plus MFs) to staying on site in a deluxe standard room, with and without a discount, and also staying off site in a condo. We would not have bought DVC if the premium for staying on site in a villa was out of our comfort zone (we like staying on site but typically would never pay rack rate for a week to stay at a deluxe resort, or even in two standard rooms at a moderate resort).

So yes, I feel like initially we did include buy in costs to estimate our true vacation costs. Going forward, however, I tend to think of MFs, tickets and food as our vacation costs because that is what we have to include in our annual vacation budget. I know the true cost is more, but that money is spent and I've already convinced myself that pre-paying what we did to stay on site in larger accommodations with a kitchen and washer/dryer was worth it to us.

 

[dianeschlicht]

On another thread this was discussed and I asked the OP if she would mind if I posted this. She did not mind and she said I had her blessing. We don't do this. Our DVC is paid for. Sure we have our MF but I don't include that in my vacation totals. It is just something that gets paid. We just figure out how much we need to for airfare, food/dining/ park passes and extra spending moola. However she factors in the vacation cost by her initial purchase cost. So it got me thinking that maybe many DVC folks do this. So I am throwing this out there to see.

She explained it to me when she wrote this. Buy in is the amount that the initial purchase cost, so for us with our contracts of 360 points we are at $39,000 CDN (exchange fluctuations put us at this amount). Then, you have to add in yearly dues, so to get a total cost for each vacation, we add our buy in amount (you divide the totals by the amount of years on each contract), plus our yearly dues = total vacation cost. Our contracts are paid for, so the buy in amount doesn't come out of our pockets each year, but we feel it's important to include as it's the only way to see how much each vacation truly costs.

Maybe I am in the DVC minority with this. Thanks

Here is the other thread for reference: http://www.disboards.com/showthread.php?t=2474140&page=5

Start at about post #62 to get the background. You can also read her first post, but then I would skip all the others until you get to 62.

LET"S GO!!!

You are not in the minority. We paid for our DVC years ago (been members for 13 years now), and while we HAD that cost, we no longer have that cost. We "Pre-paid" that cost years ago. Therefore, we consider the maintenance fees and expenses (real cost of trip items) to be the cost of our trips. That means, we take the maintenance fees divided by the number of visits in a use year, and get our initial trip cost from that. Then we can add in food, transportation, and other entertainment costs, and that gets us the cost of the trip.

I can see why some would look at it the other way though if they are making payments on their DVC. Those of us who paid up front maybe don't do that, since that "value" is static to a degree.

 

[dianeschlicht]

Denise, maybe you should have done this as a poll. It would be easier to see real results that way, and folks could still discuss as well. So far, it looks like most do as you do (we do).

 

[Jen_in_NH]

We bought DVC as a way to pre-pay the rooms. I'm still looking to travel as cheaply as possible, and will check airfare constantly, see where I'm going to be getting the best ticket prices, and eat as cheaply as we're comfortable doing. I'm not an accountant, or even any good at math, so no way will I be trying to figure out the value or cost of the room

 

[jakenjess]

I don't figure in room cost. That's the beauty of DVC, I don't have to scour for good room rates and discounts. What I pay attention to is the cost of airfare and park tickets. I like to have a few nice meals when we're on vacation, and we do eat most breakfasts and some lunches and snacks in the room, but it's not a vacation for me if I have to account for every penny spent. Probably not the best way to do it financially, but it works for us!

 

[bwvBound]

Yes, we factor the initial purchase costs into our usage figures.

 

[edk35]

Denise, maybe you should have done this as a poll. It would be easier to see real results that way, and folks could still discuss as well. So far, it looks like most do as you do (we do).

I have no idea how to do a poll. I have wanted to do that before for other questions. I am sure it is relatively easily huh??

 

[ChiSoxKeith]

Nope.

I penny pinch on the air fare, the rental car, and my food while I'm in the park.....but I'm not factoring in my room cost. That is a baked in cost that's already spent.

I look at it is DVC is forcing me to take some vacations. Normally we were only going somewhere or doing something every 3 years and we need to start taking some more "us" time.