Determining the True Cost of DVC

[Dean]

That is what I'm getting at, Dean.

If what you are doing is speculating - buying DVC contracts in a down market, renting the points, and then flipping the contract for a profit - that's a whole different model than someone who is buying primarily to use at DVC. And that's a different model than someone who is buying to rent points out. And that is a different model than someone who is buying and plans to use their points to trade and cruise. And if you plan on doing a little of all the above, you'll need to take pieces of each model. Then, if your behavior isn't modeled within the model (you'd never take your sister and her kids if you were paying cash, but paying for their room so they can go with you on points sounds like a great idea) then the model is different yet again. A decision to buy against a decision to rent points is a different model than a decision to buy against a decision to buy a Bonnett Creek resale or a decision to stay in a value resort on cash or a decision to vacation somewhere other than WDW.

There isn't going to be a true cost, because each of these are going to bring different variables into the equation in terms of opportunity costs, you'll need to make different assumptions, etc. My own "true" model would have a much higher interest rate than 5% in it, because I don't have investments that return less than that over the long term.

And in the end, they are models. And models merely model reality - imperfectly.

I would add 2 issues, both of which I've stated before. One is that the math must make sense when looked at REASONABLY (including factors I mentioned above) but this is only a starting point and part of the story. The other is another way of saying what I've said above. The psychology of timeshares (both buying and using) goes way beyond, and is usually a bigger factor, than the math itself. Thus anyone who wants to use the math itself and the assumptions that go into the math as the final answer are doing themselves, and likely others, a disservice.

As an add to this the other issue is what do you compare it to. Your room type prior to DVC or a DVC comparable. I have a family of 5 and prior to DVC we crammed into an offsite resort room utilizing 2 queens and a rollaway. When we stay at a DVC resort on points we typically rent a 2 BR It's a much different and better experience but numbers would be hard to run or try and figure out what the comparable would be.

Agree, but I'd point out this is not a function of DVC but of your choices. You have many other choices available to you that you did not avail yourself of. I don't know if you even considered them. Other choices include getting more rooms or a larger room at a hotel (either on or off property), renting condo's or houses, renting off site timeshares, buying off site timeshares, buying other timeshares and exchanging to Orlando and buying DVC. ALL have their place and all are a bad choice at times. I'm presuming cost was a major factor given the way you worded your post. Without knowing your other limitations (planning window, none Disney trips, frequency of Disney trips, etc) it's hard to make a decision as to what the cheaper long term options might be but I'll try to give some directions for consideration.

For a single or occasional trip the cheapest is likely renting a larger off property timeshare or condo last mine. Further in advance is likely the next cheapest option.

For once a year in a 2 BR, buying a cheap off property system is likely best. Either a mini points system like Wyndham or Bluegreen or a weeks system based on Orlando. Buying non Orlando and trading in may actually be as cheap or cheaper at times. This also POTENTIALLY gives more choices for other trips.

Buying DVC will actually be cheaper than renting for every 1-2 years with good choices (more expensive with bad ones) but renting will give you more access to different resorts at the 11 month window and will be cheaper on the short term.

 

[jockotaco]

I would add 2 issues, both of which I've stated before. One is that the math must make sense when looked at REASONABLY (including factors I mentioned above) but this is only a starting point and part of the story. The other is another way of saying what I've said above. The psychology of timeshares (both buying and using) goes way beyond, and is usually a bigger factor, than the math itself. Thus anyone who wants to use the math itself and the assumptions that go into the math as the final answer are doing themselves, and likely others, a disservice. Agree, but I'd point out this is not a function of DVC but of your choices. You have many other choices available to you that you did not avail yourself of. I don't know if you even considered them. Other choices include getting more rooms or a larger room at a hotel (either on or off property), renting condo's or houses, renting off site timeshares, buying off site timeshares, buying other timeshares and exchanging to Orlando and buying DVC. ALL have their place and all are a bad choice at times. I'm presuming cost was a major factor given the way you worded your post. Without knowing your other limitations (planning window, none Disney trips, frequency of Disney trips, etc) it's hard to make a decision as to what the cheaper long term options might be but I'll try to give some directions for consideration. For a single or occasional trip the cheapest is likely renting a larger off property timeshare or condo last mine. Further in advance is likely the next cheapest option. For once a year in a 2 BR, buying a cheap off property system is likely best. Either a mini points system like Wyndham or Bluegreen or a weeks system based on Orlando. Buying non Orlando and trading in may actually be as cheap or cheaper at times. This also POTENTIALLY gives more choices for other trips. Buying DVC will actually be cheaper than renting for every 1-2 years with good choices (more expensive with bad ones) but renting will give you more access to different resorts at the 11 month window and will be cheaper on the short term.

Agree with all stated. I think the difficulty here is for most with DVC travel is better and often times more extravagant. Owning DVC simply changes behavior, in my case for the better. When I did my initial analysis of DVC I did a pretty down and dirty simple analysis. I took my 10 year must do vacations (like that's not going to change) priced them out in today's dollars (picked times of year we would go and included all specials but didn't search for discounts). compared that in cost to DVC purchase and assumed rack rate at hotel and MF's would not change. It turned out for Us DVC made sense.
Current analysis issues:
When we bought DVC we were planning on staying in a 1 BR.... Currently we rent a 2 BR
We're going less but staying in a bigger unit. With kids we tend to eat in saving significant money.
So in order to run the analysis I would need to somehow determine where I would be staying today and would my family cram into one room or book 2 adjoining. Or as you have stated would I rent an offsite condo but do I need a car. The analysis is difficult and based on the assumption I make could come out anyway.
For me and my family I don't need to calculate it. DVC is a luxury and not an investment. It has enhanced our vacations to the point that I don't really care if I could go for cheaper!!!

 

[Dean]

Agree with all stated. I think the difficulty here is for most with DVC travel is better and often times more extravagant. Owning DVC simply changes behavior, in my case for the better. When I did my initial analysis of DVC I did a pretty down and dirty simple analysis. I took my 10 year must do vacations (like that's not going to change) priced them out in today's dollars (picked times of year we would go and included all specials but didn't search for discounts). compared that in cost to DVC purchase and assumed rack rate at hotel and MF's would not change. It turned out for Us DVC made sense.
Current analysis issues:
When we bought DVC we were planning on staying in a 1 BR.... Currently we rent a 2 BR
We're going less but staying in a bigger unit. With kids we tend to eat in saving significant money.
So in order to run the analysis I would need to somehow determine where I would be staying today and would my family cram into one room or book 2 adjoining. Or as you have stated would I rent an offsite condo but do I need a car. The analysis is difficult and based on the assumption I make could come out anyway.
For me and my family I don't need to calculate it. DVC is a luxury and not an investment. It has enhanced our vacations to the point that I don't really care if I could go for cheaper!!!

No doubt there are MANY variables. MOST can be anticipated or at least considered. I must admit that when we bought originally, I didn't do most of the things I now recommend. Not only have our situations and preferences changed, our options have most of all. I know so much more than I did then about DVC, Disney, timeshares and what we plan to do going forward. We now have other timeshare options that serve us better overall than does DVC and often, those still allow us to stay at DVC resorts far cheaper than owning. Financially i'd likely be better off selling all or almost all we have but I haven't made that leap yet for several reasons though we have downsized dramatically.

 

[DVC Dude]

What's the true cost of not having DVC?

the sad mickey is a great pic of NOT having DVC membership

 

[Deb & Bill]

the sad mickey is a great pic of NOT having DVC membership

Looks more like hungover Mickey after he got his dues bill.

 

[Dean]

Looks more like hungover Mickey after he got his dues bill.

Or found about about resale after a retail purchase but past the cancelation period.

 

[jade1]

Or found about about resale after a retail purchase but past the cancelation period.

Or realizing he will now be saying goodbye to cash for every night at WDW.

 

[DVC Dude]

although the posts are slightly off topic, the comments on the sad mickey are golden

 

[mikron]

i think that each individuals valuation is going to be subjective depending on the needs of the valuation - therefore, there isn't a simple way to do it because you need to understand what you are doing in terms of the accounting, why you are doing the accounting in the first place, what you would have done instead of buying dvc (both in terms of what you would have done with that money and how you would have vacationed) -

actually there is a simple way to do the accounting - do you like it + can you afford it = you are good. Everything else is either numbers games (which are fun) or justifications for people for whom the affordability is questionable (which is dangerous).

x2

 

[DVC Dude]

ok, what if the question was stated differently such as:

How do you compare one resale contract to another?

In order to account for location, size, and available points, you need some common method to compute the value of a contract and the best value contracts would be the most desirable.

 

[Dean]

ok, what if the question was stated differently such as:

How do you compare one resale contract to another?

In order to account for location, size, and available points, you need some common method to compute the value of a contract and the best value contracts would be the most desirable.

• A relative value assigned to each resort based on desirability and current prices including resale.
• # of points per year only matters based on your assessment of needs.
• Dues $$$
• The amount of overpayment for dues which almost everyone does resale.
• The real issue is in comparing stripped to loaded contracts and those in between. You simply need to assign a value to each point. I'd use either $10 per point for easy to use current UY or future UY points compared to not having the same points (or dues the buyer pays plus $5 pp). For expiring points, I'd use a much lower adjustment depending on personal variables including who much lead time you had to use or rent them. I'd even adjust modestly for one UY over another.