Decided NOT to buy DVC

[PKS44]

Just a further follow up on Lisa P's post and her calculations, now that I have had a chance to look up the points and do some more calculations...those figures are inflated to look as bad as possible for 9 nights in a 2BR:

1)First why stay 2 weekends for a 9 day stay? That is just bad planning, bad point usage. Most airfares are better if you fly mid week, too.
-start the stay on a Sun or even a Wednesday and save-instead of 500 points for 9 nights it is 430 points at the BWV or VWL...

2)That calculation in based on BWV Preferred view, do standard view and the points drop to 370 for 9 nights. Stay at the OKW and drop it to 356.

3) There is no reason for her to pay the $75/point calculated- buy a resale of OKW as low as $65-$68/point or a BWV at $70-$72 and these are conservative...But lets say $71 to be fair-that is a purchse price of 13585(this price includes the closing costs) so that is an added $1359/trip using Lisa P's formula

Add that cost to the maintenance fees on 185 points, let's make it 200 since it is not likely she can find exactly the right resale, and you come up with a nightly cost of the lodgings of $323 for a 2BR at the BWV (standard view)...and that leaves wiggle room on points if the points change, etc...I don't see how 9 nights of standard view at the Poly is going to be less than that. Once you add in taxes it is around $340/night and for much much less. Change it to an OKW reasale and it is a clear slam dunk no matter how you slice it...

maybe she could buy a resale smaller than 200 points which makes it even less...and with her going every two years in the summer if she had the right use year say August, she could bank, and borrow effectively with less to have a trip in July one year and in August 2 years later, etc with occasional point renting as needed....all in all I still don't see how staying at Deluxe accomodations like the Poly every other summer could be cheaper....and again-most of the expense of all of the above is gone after the 10 years and it is strictly maintenance fees after that which go into the equation...I am sorry Lisa P and to the original poster whose name I confess I hav forgotten , but I still like the value of DVC for the situation described...

Paul

 

[Lisa P.]

Posted by PKS44: I see your math but it only accounts for the first 10 years, not the other 31...

Actually, it accounts for the first 20 years (5% per year, 10% per every other year trip). When DVC is under 20 years from the end of its contract, reselling is likely to yield a lower return, and that purchase money is sunk.

Also the original post said that 2 years' of maintenance was the same amount of money as she spent on the Poly for 5 people in a Poly room?

Yes and a single deluxe room at the Poly sleeps up to 5 adults. No need for 2 rooms. With DVC, the 2-BR is needed.

1)First why stay 2 weekends for a 9 day stay?

In the interest of using fewer valuable vacation days from work, most people who pay cash for a 9 night stay would almost always choose to enjoy 2 weekends. The original post stated that one adult was a teacher, but what about the spouse?

2)That calculation in based on BWV Preferred view

Or VWL... which is what some people prefer and what Disney is currently selling. Not everyone considers all DVC resorts equal and giving up their view matters to some as well. Further, everyone says to buy where you want to stay - perhaps that's at a MK resort (like the Poly or VWL). DVC requires a lot of finagling in order to stretch points and I offered a comparison that many would make. If that's the case, a purchase from Disney would be sought rather than a resale. This is not a general comparison for all people... but rather under particular circumstances.

maybe she could buy a resale smaller than 200 points

And own even less than what she needs just to try and force the numbers to fit??? I did that. It was a mistake. I'd never recommend it now. One ought to figure out what they would need to accomplish their goals and seek the best arrangement to do it. I applaud senorak for doing precisely that for her family and their particular needs.

...with occasional point renting as needed....

Another encouragement to buy insuffiently and then end up having to pay more cash anyway. Either it works or it doesn't.

Posted by dbkelly: The cost per point over the 40 years is $1.30 per points ($52/40 years).

You cannot divide your purchase price by 40 years in a linear way. You pay upfront and Disney keeps your money for investing for all those years. There's more loss than the upfront purchase price number, whether you didn't use some of that money in the early years for investing or you paid interest on a loan.

We are also not comparing apples with apples.

That's right. One is a fabulous monorail hotel with full services, including daily housekeeping, several restaurants, a beach overlooking the MK castle & fireworks, a boat marina and a room that sleeps 5 (hence, you cannot, unfortunately, compare OKW studio that sleeps 4). The other is a fabulous 2-BR housekeeping timeshare villa with all that space, kitchen, jacuzzi, privacy, sleeping up to 8, lots of family-friendly activities and only bus service to all parks. They are quite different.

But since senorak's follow-up post mentioned their stay at Poly, I did compare it. And I think it's a valid comparison, in that both options are available to a family of 5 and she believes that her family could enjoy either one. Values, moderates (after the youngest is older than 9) and studios are not options at that point. Offsite luxury timeshares (fairly similar to OKW) are also options that she thinks may work for her family.

Again, you've enjoyed good value and that's great! But DVC does not offer that same value to everyone. JMHO.

 

[one_cat]

I know this isn't apples to apples but here is our situation: By June 2002 we will have had DVC for 4 full use years. In that time we will have stayed 25 nights at DVC. In addition we have rented points to people who stayed 11 more nights. Of the 25 nights 12 of those were in a studio, 13 were in a two bedroom. If I assume a two bedroom is equivelent to renting two hotel rooms the total nights stayed on points would be 49 nights. We own 250 points so we pay dues of about 1300.00 per year. (granted we only had 150 points the first year but I won't count that) 1300.00 * 4 = 5200.00 / 49 = 106.00/night that I spent on dues. We spent 17400.00 for our points. divide that by 44 equals 395.00 per year. * 4 = 1580. If add the 4 year accrual of the cost of points the amount per night becomes 138.00 per night. I think that compares favorably with staying at the Poly.

 

[Joe T.]

There are so many ways to calculate the monetary value of a TS purchase, but in most cases the long range return appears to be poor. But only because "Garbage in - garbage out." TS ownership is not always an investment, but a method of pre-paying for vacations 30 - 40 years into the future. It seems inaccurate and misleading to compare the current cost of the TS purchase (even financed that is only 10 years) to the current cost of a Poly room with a rate of increase that will have the basic cost at $500 per night in just a few years. In 2042, our investment will have been expended, but an honest review of the benefits received will be better than any of our investments with very little risk. If one tried to extract the ever increaing cost of Poly rooms from a comparable investment, I believe one would find that the initial sum did not last 20 years, let alone 40. Remember the points are used tax free, but the money spent on the Poly rooms is after-tax. Ther are reasons not to buy a TS, but value or return on equity, particularly DVC. is not one of them.

 

[teri]

5 adults in one hotel room for 9 days? I wish you well. That wouldn't work for me and my DH. I like my private space. Good luck with your decision!

 

[Jeanne]

I hope planning in advance has not been a major turn off for you in this decision making process. My family has had no intention of being in Disney at all this year, the plan was to bank all of our points. In June, my friend and I decided to use some points for a "just the girls" few nights out on the town. Not only was I not planning in advance, we made our initial ressies 5 weeks out, got just what we wanted, I called back, 3 days before arrival and was able to make the changes that I wanted, from studio to 1 bdr. villa. There have been several times that we have not planned 11 months out, and because I am a teacher, we are always going at the busier times of year. This has never been a major problem for us. The great thing about making choices is that the choice is yours, and it schould be right for you.

 

[PKS44]

Well- Lisa I am not trying to pick a fight. Your numbers are correct and may be exactly applicable to senorak's situation. But they might not. I think that your examples stack the deck in a way that is not really a full evaluation of the possible value of DVC over staying at a deluxe resort,

Lisa P wrote:
"Yes and a single deluxe room at the Poly sleeps up to 5 adults. No need for 2 rooms. With DVC, the 2-BR is needed."

Well, yes, but as others have pointed out, that is not ideal or even tolerable for 9 days for many particularly as children get older...this is an intangible, I just through it in as an addtional consideration in the comparison for future years, not just the one year she stayed with 5 in one room...

Lisa P wrote:
"In the interest of using fewer valuable vacation days from work, most people who pay cash for a 9 night stay would almost always choose to enjoy 2 weekends. The original post stated that one adult was a teacher, but what about the spouse?"

Again, that assumes a worst case scenario, not a full evaluation...Maybe "most people" do it the way you say, maybe senorak does but could be flexible...what if they save on 5 separate airfares by flying mid week...there would be two big financial reasons to use 3 more vacation days for what senorak says is their big vacation anyway...but if they have to do it with 2 weekends the costs still don't have to be as bad as your example based on preferred view or VWL.


Lisa P wrote:
"Not everyone considers all DVC resorts equal and giving up their view matters to some as well. Further, everyone says to buy where you want to stay - perhaps that's at a MK resort (like the Poly or VWL). DVC requires a lot of finagling in order to stretch points and I offered a comparison that many would make. If that's the case, a purchase from Disney would be sought rather than a resale. This is not a general comparison for all people... but rather under particular circumstances."

Again I see all of this as one possibility but only the most negative one. First, I don't see any excuse to buy from Disney rather than a resale explained in your post here... All 3 WDW DVC are available as resales and for less than Disney. So I don't know why anyone would prefer to buy from Disney if the point size /use year could be found at resale- unless they had to have it close immediately...Further, you assumed a view is important- but that costs extra at the Poly increasing the cost for the stay- and again if staying at the Poly is the main thing, of course DVC is all wrong, but my impression was that the argument was made on economic grounds almost entirely, not on the specifics of any resort, and senorak was not citing any particular feature of any resort, therefore I based my assessment on economics, not intangibles like whether they wanted to be on the monorail, etc, which were not mentioned...(monorail in particular is completely irrelevant to DVC- if you want Monorail- you don't can't find it at all in DVC)


I wrote:
"maybe she could buy a resale smaller than 200 points"


to which Lisa P replied:

"And own even less than what she needs just to try and force the numbers to fit??? I did that. It was a mistake. I'd never recommend it now. One ought to figure out what they would need to accomplish their goals and seek the best arrangement to do it. I applaud senorak for doing precisely that for her family and their particular needs."

Unless they MUST have the extreme situation as you framed it they don't need more than 185 points to do 9 days every 2 years at current point structures, and I would also add senorak was talking about anywhere from 7 to 10 days, so when you take it down to 7 or 8 days the value of DVC is even clearer.

Lisa P wrote:
"Offsite luxury timeshares (fairly similar to OKW) are also options that she thinks may work for her family."

Again this gets into some intangibles and the whole onsite off site debate which is far removed from the economic points I was addressing.

Lisa P wrote:
But DVC does not offer that same value to everyone. JMHO."

Of course- the value will depend on the situation, which in senorak's case neither of us knows for sure. You gave an honest but I felt incomplete and perhaps too pessimistic scenario. I felt it was important to show that there is a plausible alternative that compares very favorably with Deluxe accomodations and still met the general parameters that senorak mentioned. Senorak may not have considered all the possibilities...If she did and still did not find DVC for her, that's okay, too...I was just trying to show the full range of economic breakdowns-leaving the intangibles up to the individual preferences...I don't disagree with your opinion, I am not seeking to put any "opinion" forward here...Just various calculations of value besides the scenario you put forward.

Paul

 

[dbkelly]

I totally agree with your comeback on how I calculated the overall cost of my investment over 40 years. The reason why I did not bring the time value of money into my analysis, is because unless you are a CPA like myself or a business professional, the concept can be very difficult to understand. The other reason why I did not consider the time value of money is because the prices of the Poly is going to increase every year. Disney had a 10% increase last year. This analysis can be very complicated, however I did do it on an excel spreadsheet and I was always a head of the game. I did numerous analyses and my rate of return was always excellent.

I also made an analysis of the people who owned the resale before me. According to their purchase date, I believe they paid $51 per share. They sold the shares for $65 per share, less $6.50 per share for commissions. Thus, their profit on the resale was $1725. Now lets add 9 years of fees which is approximately $6,479. Their total cost (not including the timevalue of money) was $4,754 for 9 years of vacations or $528 per year!

Besides all of my analyses, it was also very important to us that we stay in a much larger unit then a hotel room. The cramped quarters with 5 of us, was not enjoyable on our last trip. I am very happy for any family who can get along in a 300 sq ft something room for 9 days. Actually I am very jealous of a family who could accomplish that goal.

 

[DeeP]

I do not have the time nor the energy to go into all the detailed math calculations on whether DVC is a good value or not---I use the simple method. I bought into DVC 2 1/2 years ago and paid $60.00 a point; those same points are now selling for $75.00 a point, plus we have taken 5 WDW vacations (averaging 9 days per stay) in that time using our DVC points.The only thing we have had to pay was our membership dues. I don't know how others are figuring it out but it has certainly saved me major money spent on WDW rooms and we had first class deluxe accomendations at BWV & OKW! When I add up what I have spent for pre DVC WDW rooms for a 2 1/2 year period and 5 trips it was a lot more money than I have spent since I joined DVC, and some of our previous trips before DVC were at moderate resorts!!!! And we have another 38 years of DVC use left!!
I agree that you can buy a TS off Disney property for a lot less than DVC but I would not even consider staying at an offsite resort (been there, done that, never doing it again), let alone buying a TS off Disney property!! No thank you, maybe ignorance is bliss, but this ignorant person is very happy with my DVC purchase and all the extra money I have in my pocket since my DVC is paid for and I am no longer paying the ever rising high costs of WDW resorts. It definitley works for me!! Now if I could only figure out a way to have my stock investments increase at the same rapid rate that my DVC point value is, I would be set. LOL!!!

 

[senorak]

Wow...didn't realize my simple statement would create such a debate! In all honesty....I loved the "samples" of the v illas rooms I was shown during the DVC presentation (I would never consider buying w/o seeing what I am getting). And yes, IF you plan to use the DVC facilities often (every other year or more), I agree that DVC is a good buy. In fact, I have to be honest and tell you that after meeting with the DVC rep and seeing the villas, comparing the prices and factoring in how often I would like to return to WDW, I am swayed towards buying. HOWEVER....there are some "stumbling blocks" my DH is not a Disney person----he has no desire to return in the next few years. I know, this could lower my room needs to a 1BR and even less points. And yes, I would consider traveling w/o him. The reservations I have...and they may not make sense to many of you.....are several of what Lisa mentioned. The POLY really spoiled us for the ease in getting in/out of MK and Epcot. With 2 children under the age of 6, you can just "zip" right out and be back at the htel quickly. And no, I didn't mind the size of the room...though it was large. And the room we had was concierge...and I enjoyed grabbing a snack or drink whenever we wanted. I know...the villas have full kitchens....but when flying to WDW, I don't have room for packing food....or worse, for bringing the leftover food home. I love to eat at the many excellent restaurants in WDW....so I would still have those high costs. The biggest "block" for me is simply the time I can travel and try to get the most points for the value. I know I can go mid-late Aug. and use less points than the rest of the summer. But that would be about the only time I could go. And to be truthful, while money is not an issue for us, (we could probably buy into the DVC at 200 points and pay it off in a year), my DH is really "hung up" on the maintenance fees and the 40 year lease (our other TSs being deeded forever). I have to sit down and do some serious thinking and planning and ask myself how often I will (truly) be returning to WDW....and if I find that DVC will work for us; then by all means I will buy into the program. I think DVC is great...for those families for whom it works well. I would love for it to work for us....but it is an individual decision. I would hate to buy into DVC and not be able to use it....and then feel resentful or regret my purchase. The other factors I have to add in would of course be airfare. Perhaps what I will do is talk with some of my extended family...and see if they would be interested in "sharing" a DVC purchase w/ me. I thank you all for your opinions....but please try to understand that DVC is not for everyone. I have other TS that I use for trading value and one that I use simply because it is close to our home here in PA and an easy "getaway". DVC is much more (outright purchase) than any of the other TS I own and the maintenance fees are up to 3x as much. I want to make sure I make an informed decision and one that is right for OUR FAMILY.

DEB

 

[Diznut84]

I have two points to make:

1) In comparison, DVC has much more flexibility than most other timeshare options.
a) How many timeshares allow you to choose the number of nights that you wish to stay? Answer: Very few (not Marriott).
b) How many timeshares allow you to make an internal exchange for free? Answer: Very few (not Marriott).
c) How many timeshares allow you to cancel a reservation outside of 60 days without any financial penalty or loss of trade value? Answer: Very few (not Marriott).
d) How many timeshares allow you to exchange into many different locations without holding membership in a major exchange company? Answer: Very few (not Marriott).
e) How many timeshares will allow you to make reservations during any time of they year, even if you own a period different from the one you are requesting? Answer: Very few (not Marriott).
f) How many timeshares let you bank and borrow your ownership interest (with no penalty) to accomodate your vacation needs? Answer: Very few (not Marriott).

My point: Although Marriott is a great timeshare company, they are nowhere near as flexible as DVC in their core timeshare offerings. DVC remains an industry leader in the flexibility it provides its members.

2) When calculating the total cost of ownership, don't forget to estimate the different decline in value of other timeshares relative to DVC. Try purchasing a new Marriott week from the developer. When a resale market becomes available, you may only get 60% of the value or less on your resale. Many original DVC members can sell their timeshare purchase for the original purchase price or even higher. Thus, their true costs would only be the maintenance fees and the loss of using that money elsewhere. The calculation changes significantly when comparing to the total cost of other timeshares...

In my opinion, DVC is usually a GREAT value for those who insist upon staying on Disney grounds. Of course, if you don't mind staying off grounds, you can always save a bunch of money, but that is true with the regular resorts as well as DVC membership. To each their own!

 

[PamOKW]

I wonder if DVC dues are higher because they make a conscious effort to build the reserve funds? It's true we have some additional expenses such as the buses/boats and maintaining high quality resorts but the reserve may factor in. I have heard of timeshares leveling special assessments when a new roof, new pool, etc. are needed. DVC is trying to plan for all future major maintenance by budgeting a certain amount towards this fund every year. The likelihood of special assessments is very small.

 

[Dean]

senorak, I'd be cautious in buying in the situation you've described. You can always looke for deals at the Poly or similar resorts and/or rent from a DVC member when you need to. The dues are high because it's Disney, Orlando area, quality and the flexibility in the system. Good luck with your decision.

 

[deerh]

maintenance fees are up to 3x as much Senorak said..

You have got to stop and think about this. YES, you can stay at another TS for a lot less main. fee, but, what is the condition of the resort? I have seen the resorts with Low main. fees, and no thank you, they are not in the class with disney. Marriott is not cheap either, just look on the web for resales of Marriott in Hilton Head or other places. I think you get what you pay for IMHO.......
deerh

 

[JonHM]

Welcome back! I agree that you should take this decision very slowly and deliberately and fully consider whether it is right for you and your family or not. That said, I wanted to make a few comments:

Remember your 'safety valves' that exist should you not be able to take a trip in a given year: You can always 'bank' or 'borrow' the points, can use them somewhere Non-DVC that might be closer to home or easier to drag your DH to , OR you can always rent out your points for a particular year if you need to.

As far as being spoiled by the quick access from Poly to MK and Epcot, remember that BWV has very easy access to both Epcot and MGM, and that VWL has very easy access (via boat) to MK.

Personally, I think too many people get hung up on the end date of the program. Here is my take on it: I look at it as comparable to buying a car. It's in the same price range, and we will have our DVC purchase paid off within 10 years. At 10 years, most cars are either long since retired, or on their last legs. In 10 years, however, I will still have over 30 years worth of vacations for merely the cost of the maintenance fees! Again, this has to be right for YOU, but for DW and myself, this was *tremendous* value.

Keep in mind, you don't have to 'cook' to take advantage of the kitchen. You could bring leftovers from all of the fantastic restaurants 'home' with you, and enjoy them again at a later meal. I know we found it very frustrating staying in GF this June that we could not do that. We either had to eat more than we wanted in many cases, or see it go to waste. But you don't have to think of the kitchen simply in terms of staying in and cooking things from scratch. It's also great for quick in-room breakfasts before heading out to the parks.

Several last points: are you REALLY sure that all of the companies who own your other TS's are still going to be in business in 40 years? Or that they will truly keep the resort in the same condition that it is in now, 40 years from now? From that standpoint, the 'lifetime' deeding can be a misleading concept.

To me, the biggest issue for you is your non-Disney DH. I would suggest starting a thread asking about non Disney spouses who have been 'converted' over the years... I bet that you would get a LOT of stories...

Again, good luck with your decision, take it very slowly and deliberately, and be sure to post ANY questions that you have to the board. Take Care!

 

[senorak]

I love your well thought out responses, Jon. Am taking your advice and posting a new thread re: Non Disney loving spouses. Thanks for the idea.

DEB

 

[Zimbubba]

I read this entire thread with great interest focusing on value of DVC. We go every other year and have since 1985. Beginning in 1989 we stayed at the CBR. It sold us on Disney hotel quality at a then very affordable $69.00 MKC rate. The selling point for us was price stability for quality accomodations. Look at what the CBR costs now. In 1995 we locked in those costs, avaiability, and quality. We bank points every other year allowing for a 10 day stay in the middle of summer. There is real value here.

I do agree that some things are disappearing. I believe we will all be surprised when we get the new member handbook. Publishing yearly allows for some Disney flexability as many people will simply discard previous editions. I think more "perks" will disappear.

I believve member services needs to keep up with membership. Long gone are the days of calling in and not being put on hold. They do not give consistent answers and some lack basic skills. These may be growing pains but also panic ensues when writers and readers of this and other boards make people feel they need to call all the time. (The suggestion was recently made to call every day (until all days are booked)for summer reservations---simply not needed!)

Overall it is still high quality--high value.

 

[Lisa P.]

Originally posted by deerh
You have got to stop and think about this. YES, you can stay at another TS for a lot less main. fee, but, what is the condition of the resort? I have seen the resorts with Low main. fees, and no thank you...

This is not really relevant if one is buying outside overbuilt Orlando and trading into the area. There are MANY brand new (newer than DVC OKW) Gold Crown & 5 Star resorts with big, fun, feature pools and other terrific amenities. DVC is not the only timeshare company to offer REALLY NICE resorts in the area. Trading in is pretty easy, with a little advance planning (needed with DVC too).

 

[senorak]

Thanks, LisaP, I agree w/ you....the timeshares I have are 4 and 5 star and have traded into 5 star resorts which are just as spacious, comfortable, up-to-date, etc. as DVC villas. You have to admit that when you compare that I spent less than $7k buying my 3 other TS (resale totals for all 3) and their maintenance fees (combined) are less than $700...it does make me (and mostly DH) hesitate about DVC. For DH, he doesn't care whether we are in WDW itself or nearby (tho yes, he does admit that you can't beat the convenience of being "on property") and he does prefer the "wilder" theme parks of Universal/Islands of Adventure, Busch Gardens, etc. So, that is a major sticking point for me. Again, I'm glad DVC works for so many people.....I'm just trying to decide if it will work as well for us...or if we're better off sticking with our "traditional" TSs and just trade into the Orlando area and perhaps stay a few nights on property in WDW resorts at discounted rates.

DEB

 

[Dreamfinder2]

Senorak, I've been real interested in this thread just because we're dealing with some of the same questions you are. I appreciate the responsiveness of the other posters. Just wondering -- where else do you own, since you don't seem to have had much trouble trading into the WDW area?