DECISION TIME! Why I'm prob going to pass on buying into DVC

[disneynutz]

Something else that I've been curious about is comparing buying at Saratoga Springs (low entry cost and low maintenance fees) versus buying at AKL or Boardwalk where lower point room options are offered.

I'm especially interested to find out if paying more per point for an AKL contract is better than paying less at SSR when you factor in the greater likelihood of getting a value studio at AKL for 8-10 points less than any other studio for a week.

Disney is a luxury vacation and worrying about getting a less expensive room doesn't make sense to me. Booking at your favorite resort is more important so I bought where we love to stay.

I have also found that many DVC owners go through changes. After a couple of years of Disney vacations, rushing to the parks and crowds becomes less appealing and you begin to start enjoying your room and resort more.

We had a 10 day stay last year where we went into Epcot for about 2 hours, that was our only park time.

Bill

 

[DougEMG]

Anyone who goes to WDW less than twice a year and owns DVC is making a bad financial choice. Yes there are other factors to consider but for me, I'm not going to let those other factors lead me to a bad financial choice. Studio, 2 bedroom villa, etc...it doesn't matter what kind of room you select or which resort you choose. Renting points to stay in those rooms is a far better use of money then buying into DVC....unless you're going to WDW multiple times a year.

Have to disagree with you here. The number of trips you make doesn't matter, all that matters is that you use your points, you could go just once every three years by banking and borrowing and still can make it worth while owning DVC.

If you're happier renting that is great too.

 

[DougEMG]

Something else that I've been curious about is comparing buying at Saratoga Springs (low entry cost and low maintenance fees) versus buying at AKL or Boardwalk where lower point room options are offered.

I'm especially interested to find out if paying more per point for an AKL contract is better than paying less at SSR when you factor in the greater likelihood of getting a value studio at AKL for 8-10 points less than any other studio for a week.

Here's what it would take in points to stay in a studio for Sept 01-30
Points
285 AKV - value
314 BWV - standard
314 OKW
335 AKV - standard
372 SSR
422 AKV - savanna
422 BLT - standard
443 BCV
443 BWV - preferred
443 VWL
509 BLT - lake
517 AKV - concierge
583 BLT - MK


Here's what the average per night cost would be in MF if you owned and stayed at the resort you owned.


$MF/Night
55.77 AKV - value
57.87 OKW
61.74 SSR
63.24 BWV - standard
65.44 BLT - standard
65.55 AKV - standard
78.93 BLT - lake
82.58 AKV - savanna
86.24 BCV
88.49 VWL
89.22 BWV - preferred
90.41 BLT - MK
101.17 AKV - concierge

I've done this for a bunch of other months, months that I'm interested in going when I'm retired and the ranking workes out pretty much the same.

Here's the total increase in MF for the resorts in the last 5 years
14.32% SSR
15.89% BWV
17.21% OKW
17.62% BCV
18.95% VWL
20.49% AKV

15.61% BLT (in 2 years)


So if you want the cheapest option possible, buy SSR resale, book SSR at 11 months and then try and switch somewhere else at 7 months. AKV value rooms are the cheapest, but there isn't many of them and they are in high demand because of the low point costs, so odds are not good of getting that room unless you own AKV; AKV has higher resale costs and MF than SSR.

You can run numbers all you like, what is it that you are comfortable doing? Don't buy if you think you are wasting your money.

When I ran the numbers I just wanted to make sure that I knew what I was getting into and how it compared to what we had been doing (staying at moderates).

Good luck with your decision.

 

[theguda]

I come out with the same numbers a 7 year payback. It assumes no interest earned on the upfront costs and for me I compared to renting a hotel room direct from Disney at going rates. My numbers were for Disneyland though not Disneyworld so there its either pay for a Disney hotel as renting.Dvc there is difficult with vgc being so small. The other option is paying high rates for nearby motels.

Respectfully...you have to factor in how much interest you'd earn by investing that money if you didn't purchase. But what's skewing your #'s even more is using Disney's direct pricing as your basis. Renting points decreases the room cost significantly and you can do that whenever you want. A $300 room direct through Disney will cost you a fraction of that amount by renting. This is a prime example of what I've been talking about and others have warned against. A lot of people don't really understand the true cost of DVC. Paying rack rate for a room is like paying sticker price for a car. Your recoup time on your buyin is gonna be more like 14 years, not 7

 

[theguda]

Here's what it would take in points to stay in a studio for Sept 01-30
Points
285 AKV - value
314 BWV - standard
314 OKW
335 AKV - standard
372 SSR
422 AKV - savanna
422 BLT - standard
443 BCV
443 BWV - preferred
443 VWL
509 BLT - lake
517 AKV - concierge
583 BLT - MK

Here's what the average per night cost would be in MF if you owned and stayed at the resort you owned.

$MF/Night
55.77 AKV - value
57.87 OKW
61.74 SSR
63.24 BWV - standard
65.44 BLT - standard
65.55 AKV - standard
78.93 BLT - lake
82.58 AKV - savanna
86.24 BCV
88.49 VWL
89.22 BWV - preferred
90.41 BLT - MK
101.17 AKV - concierge

I've done this for a bunch of other months, months that I'm interested in going when I'm retired and the ranking workes out pretty much the same.

Here's the total increase in MF for the resorts in the last 5 years
14.32% SSR
15.89% BWV
17.21% OKW
17.62% BCV
18.95% VWL
20.49% AKV

15.61% BLT (in 2 years)

So if you want the cheapest option possible, buy SSR resale, book SSR at 11 months and then try and switch somewhere else at 7 months. AKV value rooms are the cheapest, but there isn't many of them and they are in high demand because of the low point costs, so odds are not good of getting that room unless you own AKV; AKV has higher resale costs and MF than SSR.

You can run numbers all you like, what is it that you are comfortable doing? Don't buy if you think you are wasting your money.

When I ran the numbers I just wanted to make sure that I knew what I was getting into and how it compared to what we had been doing (staying at moderates).

Good luck with your decision.

You're the man. I love this information and love your input throughout this thread.

 

[LisaS]

Disney is a luxury vacation and worrying about getting a less expensive room doesn't make sense to me. Booking at your favorite resort is more important so I bought where we love to stay.

I have also found that many DVC owners go through changes. After a couple of years of Disney vacations, rushing to the parks and crowds becomes less appealing and you begin to start enjoying your room and resort more.

I completely agree! The resorts we opted to buy have higher dues than SSR but I looked at it as insurance that we will always be exactly where we want to be each stay.

I prefer to be in control of my own reservation so I can adjust our dates as needed if DH's work schedule changes unexpectedly or to get better air travel options (nonstop flights at convenient times). That makes renting impractical even if it would have been a cheaper option. To me, getting the resort and room type I want and having flexibility is worth the extra cost.

Pre-DVC, we went once or twice a year and stayed in deluxe resorts on AP rates. I ran the numbers and it made sense financially so we decided to purchase. The best thing is not having to wait for AP rates or general room discounts or PIN codes to book our vacation. We love the Epcot resorts but there is no way I would have ever paid rack rate for those rooms!

 

[PCMama]

Respectfully...you have to factor in how much interest you'd earn by investing that money if you didn't purchase. But what's skewing your #'s even more is using Disney's direct pricing as your basis. Renting points decreases the room cost significantly and you can do that whenever you want. A $300 room direct through Disney will cost you a fraction of that amount by renting. This is a prime example of what I've been talking about and others have warned against. A lot of people don't really understand the true cost of DVC. Paying rack rate for a room is like paying sticker price for a car. Your recoup time on your buyin is gonna be more like 14 years, not 7

I realize that regarding the interest rates- I was just being lazy.

As for renting again I'm on the western side of the country so renting Dvc at vgc is near impossible unless you get a 2 br. The rates I compared to for my numbers was a rate I paid in. Oct 2011 for the Disneyland hotel with a 30 percent discount, including hotel tax. I also ran numbers for the offsite motels. So my situation is different. But with Dvc, its really not about numbers. Its more about access to their villas. If I only went to Orlando, yup renting probably work better. At DL, you pretty much need to own to stay at VGC.

 

[elfbo]

We stay at a moderate each year, and getting to upgrade to deluxe for the same price is what got my DH on board. Renting is not an option due to scheduling. Using an 11500$ buy in price. Factoring in 10 years of mf and interest we get 17000$ spent on dvc over 10 years. Our discounted room comes to 1750$. So in less than 10 years we break even. 9 years when you factor in the 2012 points. No interest income lost because we are financing. (5 year loan scheduled to pay off in 2 years, rewards points on full purchase. Applying the 3500$ we will spend on rooms this year to the downpayment instead of waiting a year outright still puts us ahead even factoring interest).

This assumes mf and direct room cost increase at the same rate each year even though historically rooms increase more. After 10 years we can sell or just have rooms that are 1/3rd of direct price.

I also did a discount analysis for fun that i didnt factor in because discounts are not guaranteed, but for every year we get them, makes the break even date even earlier. A renting break even date would push us to 12 to 13 years, but after that what do you have? None of your initial money left, no contract worth at least a couple thousand dollars.

Being a youngish couple just starting a family it is easy to see 10+ years of trips in our future.

 

[tjkraz]

I must be a glutton for punishment today...

If I instead take that $10,500, invest it and get a moderate 5% rate of return...I'd have $15,600 at the end of 8 years. Now my recoup time extends to almost 14 years.

This passage from the original post struck me earlier. Later in the thread, you claimed to have a trip planned for "October" (I'm unclear if that's '13 or '14.) So, it makes absolutely no sense for you to imply that the $10500 will be earning a consistent 5% for eight years.

In reality, when you forego DVC ownership you will begin deducting from those monies to pay for your stays on rented points. If you spend the $10.5K, the DVC points will begin to fund your trip. If you remain a renter, you'll have to deduct from that fund for every reservation.

Option A: Continue to rent points and invest your $10K in a high quality bond of 5%. Assuming MFs and rent move together at approx 4% (historical for SSR) on 160 points. At the end of 6 years, your bond has returned $13,400 of cash flows and the cumulative difference between renting and buying is $7,429 netting out at $5,971.

Option B: Buy SSR for $10K. The cumulative difference between renting and buying is still $7,429 and I would think it's a safe assumption that your contract in 6 years time would be worth a net $37.50 PP (after commissions, etc) or $6,000.

At the end of 6 years, there is no difference between renting and buying (ignoring convenience of booking, discount on APs and other perks that DVC owners have listed).

Nicely done!

Since "bisney" hasn't been around to share the details of his math, I threw together a worksheet of my own.

The numbers below represent $10,500 invested at 5%, with annual ADDITIONS equivalent to the approximate DVC dues (instead of paying dues to DVC, those same monies are deposited to this account) and DEDUCTIONS for the rental trips. I think I was pretty generous in assuming rental rates of $12 per point for the next 5 years, and then increasing just $1 per point at 5 year increments.

According to these numbers, the vacation savings account will no longer be able to support future trips by Year 13. But long before that happens, the value of the savings account will have fallen below the resale value of the SSR points.

For comparison's sake, I also listed an approximate value for the remaining years on the SSR contract. The value is shown both in total dollars and dollars per point.

My calculations assume the SSR points will lose about 5% value per year. Seems reasonable for the SSR points to still be worth $35 each in Year 13 (2025) with 29 years remaining on the contract.

 

[AddieAidey]

Totally agree with the post (and quote) above (Dave and Addie). If we didn't own DVC we would NEVER be getting a villa with kitchen, W/D, jetted tub, separate bedroom, etc....not on WDW property. We'd have to book moderates (for 5 of us in a room ) or get a condo type room off property...and we'd only go every 3 years or so. For me, staying on WDW property and eating at WDW dining (at least 1 meal per day...we usually do 2 though) is all part of the Disney vacation. Now, flying in and taking the ME (not messing with our luggage until it's delivered to our villa...sweet!!!) is also part of the Disney vacation. DH is not as sold on the flying in part when he sees airfare costs...our Xmas trip is sending him over the edge .

Thanks for sharing the sentiment! Vacations are suppose to be magic and I'm sure most of us LIVE & WORK to make our kids experiences extra special. We get one shot at this and for such a short time....I would hate to say "what if" years later after having so-so vacations.

In regards to airfare...a little trick we use! We have a US Airways credit card that gives us (2) $99 companion tickets per year. Buy one full price ticket and get 2 round trip for $99

If you apply while you are a flight they give you 40K bonus miles if approved which is enough for 1 round trip in itself. The first years annual fee is waived then its $89 a year. Our Feb round trip air was $600 for 3 tickets from PHX to MCO (and a lap baby).

Alaska Air also has a card that gives you (1) companion ticket for $118 and they fly to Hawaii and the companion ticket is valid for travel to HNL We don't use that but sharing for those that may be interested.

 

[bigvig1130]

What I don't understand is when people say that you will spend extra money on your vacation by going to Disney EVERY time you go. I like the idea of having a place to stay near Disney with the option of either going to Disney or staying at the resort and enjoying the amenities. Also, I can stay at Vero, HHI, or Aulani without the intent of going to Disney parks.

Why did I buy DVC? Knowing that I can go on a vacation with my future grandchildren 30 years from now. I'm not one to do the over analysis of an " investment" into DVC. If we all did this type of analysis for every other facet of our lives, we would all live in Arkansas driving KIAs.

 

[AddieAidey]

I had not made it through the rest of the thread and the "bad financial decision" post before my previous post.

This is getting quite annoying and exhausting . Everyone helped the OP and then he insults practically everyone who has a contract. I commend those who spent a lot of time crunching numbers as a rebuttle but I believe he is set in his analysis and decision. I can't grasp why he is spending so much time vacillating a purchase and on these boards. Very wishy washy. Renting is definitely best for HIM.

I don't know about you but I find it quite odd to see someone exerting so much effort into NOT buying something and talking about it. It's his own logic getting in the way of something that is not meant to be an essential purchase. We buy it because we can, we want to, and get this....we are ALSO investing for retirement. Both can be done. I can either have more money growing or I can enjoy my life now and the time watching my babies LOVE their disney trips. My husband and I value vacations as one of our most important qualities of life for our family. So what if it takes 7 or 14 years or NONE to recoup. We all paid for luxury at a discount off retail whether you bought direct or resale.

As a side note, I was not able to rent when we went in Feb. because it wasn't available. Point shortage. All those irresponsible contract owners are using their bad investment for fun. Now its my turn along with 300K others. Never seen a bad decision with such low supply.

I love these boards because they absolutely helped us. I'm here for the positive and the warm and fuzzies of planning and buying....and this post is getting ridiculous. Catch you guys later in another thread

 

[PCMama]

Thanks for sharing the sentiment! Vacations are suppose to be magic and I'm sure most of us LIVE & WORK to make our kids experiences extra special. We get one shot at this and for such a short time....I would hate to say "what if" years later after having so-so vacations.

In regards to airfare...a little trick we use! We have a US Airways credit card that gives us (2) $99 companion tickets per year. Buy one full price ticket and get 2 round trip for $99

If you apply while you are a flight they give you 40K bonus miles if approved which is enough for 1 round trip in itself. The first years annual fee is waived then its $89 a year. Our Feb round trip air was $600 for 3 tickets from PHX to MCO (and a lap baby).

Alaska Air also has a card that gives you (1) companion ticket for $118 and they fly to Hawaii and the companion ticket is valid for travel to HNL We don't use that but sharing for those that may be interested.

Does USAir fly to Hawaii and are the companion tickets good for that too?

 

[AddieAidey]

Does USAir fly to Hawaii and are the companion tickets good for that too?

They do fly to Hawaii but can only use the companion tickets for continental US.

 

[DougEMG]

I must be a glutton for punishment today...

The numbers below represent $10,500 invested at 5%, with annual ADDITIONS equivalent to the approximate DVC dues (instead of paying dues to DVC, those same monies are deposited to this account) and DEDUCTIONS for the rental trips. I think I was pretty generous in assuming rental rates of $12 per point for the next 5 years, and then increasing just $1 per point at 5 year increments.

According to these numbers, the vacation savings account will no longer be able to support future trips by Year 13. But long before that happens, the value of the savings account will have fallen below the resale value of the SSR points.

For comparison's sake, I also listed an approximate value for the remaining years on the SSR contract. The value is shown both in total dollars and dollars per point.

My calculations assume the SSR points will lose about 5% value per year. Seems reasonable for the SSR points to still be worth $35 each in Year 13 (2025) with 29 years remaining on the contract.

I agree with your numbers and results...one thing that would improve the results is that the OP had 320 points in his first year instead of 160, so he could rent out 160 immediately and reduce his starting costs right away.

In either case there comes a point were your saving/investments run out while on the other hand you still own the resort which does have value. It's all about a trade off with DVC, you get higher up front costs for lower long term cummulative costs. I (and my daughter) want to own my contracts till they expire so I'll have them long enough to get those long term savings. If I was only planning on 5 years of use, then no way would I buy. If it had of taken me 10-15 years to break even I don't know what I would have done.

 

[goNDmay9]

You are not confused, that is what I posted about, and was ignored, OP is very analytical and wanting to make the right decision for himself but has no concern for the contract he is holding against the seller.

Yea. It was your post that I remembered. Thought maybe I was getting boards confused or something.

 

[babesboo99]

We were thinking of buying into one of the resorts that didn't cost as much. but then my Dh and I said let's buy where we are going to stay most of the time and that'as why we bought into the BCV.

 

[Fan of Figment]

This thread has gotten pretty crazy. Its good to look into a big purchase and think it all over, but this is overanalyzing if you ask me.

Bottom line is if you buy the amount of points you need and keep the contract for the full term, you WILL save money. Buy!

If you usually stay at a value resort or only go every 3 plus years, you will not save money. Don't buy!

For those of us that like going often and know the contract will get good use, it's win win.

 

[theguda]

. If it had of taken me 10-15 years to break even I don't know what I would have done.

Judging from your posts I suspect you'd pass on buying if the break even point was 10-15 years. You seem to be able to separate your feelings from your money.

 

[theguda]

I had not made it through the rest of the thread and the "bad financial decision" post before my previous post.

This is getting quite annoying and exhausting . Everyone helped the OP and then he insults practically everyone who has a contract. I commend those who spent a lot of time crunching numbers as a rebuttle but I believe he is set in his analysis and decision. I can't grasp why he is spending so much time vacillating a purchase and on these boards. Very wishy washy. Renting is definitely best for HIM.

I don't know about you but I find it quite odd to see someone exerting so much effort into NOT buying something and talking about it. It's his own logic getting in the way of something that is not meant to be an essential purchase. We buy it because we can, we want to, and get this....we are ALSO investing for retirement. Both can be done. I can either have more money growing or I can enjoy my life now and the time watching my babies LOVE their disney trips. My husband and I value vacations as one of our most important qualities of life for our family. So what if it takes 7 or 14 years or NONE to recoup. We all paid for luxury at a discount off retail whether you bought direct or resale.

As a side note, I was not able to rent when we went in Feb. because it wasn't available. Point shortage. All those irresponsible contract owners are using their bad investment for fun. Now its my turn along with 300K others. Never seen a bad decision with such low supply.

I love these boards because they absolutely helped us. I'm here for the positive and the warm and fuzzies of planning and buying....and this post is getting ridiculous. Catch you guys later in another thread

Sorry you feel offended. That wasn't my intent. I'm surprised you couldn't find points in Feb. A quick look on the rent board shows probably over 100 posts from those irresponsible dvc owners looking for people like me to rent them. Maybe you didn't know that board existed? Next time give it a try...you'll be able to rent any amount your heart desires.