DVC Financial Analysis

[zavandor]

I also purchased my first contract in 2010. I have a spreadsheet that tracks every night we have stayed on points. I also track the lowest cost Value room, the lowest cost Moderate room, the lowest cost Deluxe room, the lowest cost Villa room, and the cash rate for the villa we actually book. The lowest price rooms are often calculated with a Florida Resident or Annual Pass discount. Since we only stay in studios it is a relatively easy comparison.

• Comparing our DVC Studio stays to a Value resort we will never break even.
• Comparing our DVC Studio stays to a Moderate resort we might break even in 2025 (16 years after first purchase)
• Comparing our DVC Studio stays to a Deluxe resort we might break even in 2017 (8 years after first purchase)
• Comparing our DVC Studio stays to the cheapest DVC Studio resort we might break even in 2018 (9 years after first purchase)
• Comparing our DVC Studio stays to the cash rate for the same accommodation we will break even after our next trip in November (6 years after first purchase)

The first 4 comparisons aren't necessary fair. Comparing a DVC studio to the cheapest room elsewhere. Even comparing a studio at VGF, Poly, etc. to the cheapest Deluxe or cheapest villa (i.e. OKW) isn't fair.

I started to do something similar to this, but I'm not as organized as you and I've stopped. After a few great stays I feel I "broke even" just because of the value I got from it in term of much better accommodation I've stayed in.

 

[bwbuddy5]

I started to do something similar to this, but I'm not as organized as you and I've stopped. After a few great stays I feel I "broke even" just because of the value I got from it in term of much better accommodation I've stayed in.

I couldn't agree more - this is always under-emphazized in all of the analysis posts.

 

[mrsmith9]

I started to do something similar to this, but I'm not as organized as you and I've stopped. After a few great stays I feel I "broke even" just because of the value I got from it in term of much better accommodation I've stayed in.

Booking only studios, I can't necessary say that I have stayed in better accommodations. In many cases I prefer the Deluxe Hotel Room to it's DVC studio counter part.

 

[DisDadDVC]

I couldn't agree more - this is always under-emphazized in all of the analysis posts.

That's because there is no math behind "feelings".

 

[Eric Topp]

Resale with zero financing is the only "logical" way to go! Of course, not everyone is "logical"!

 

[zavandor]

Booking only studios, I can't necessary say that I have stayed in better accommodations. In many cases I prefer the Deluxe Hotel Room to it's DVC studio counter part.

Better than I would book otherwise.
I'm going to DLR in a month and I'm going to stay 3 nights at the VGC. Rack rates are around $600 per night. No way I would pay that! I would book a motel on Harbour blv for $100, which is around what I paid for the MF for the points I'm going to use.

At WDW I would stay in values or offsite, with DVC I've stayed at Jambo House and OKW.

From a strictly financial point of view, I'm not saving a penny, all considered I'm paying more, but I'm getting much much more value for my money.

 

[ell13]

Resale with zero financing is the only "logical" way to go! Of course, not everyone is "logical"!

We could have paid for our resale upfront, but we found financing that was extremely reasonable for this type of loan. 2 years; 5.99%. It keeps the cash freed up for other investments that may or may not beat that percentage.

 

[mrsmith9]

Better than I would book otherwise.
I'm going to DLR in a month and I'm going to stay 3 nights at the VGC. Rack rates are around $600 per night. No way I would pay that! I would book a motel on Harbour blv for $100, which is around what I paid for the MF for the points I'm going to use.

At WDW I would stay in values or offsite, with DVC I've stayed at Jambo House and OKW.

From a strictly financial point of view, I'm not saving a penny, all considered I'm paying more, but I'm getting much much more value for my money.

I agree with this analysis. That is actually what made us pull the trigger on purchasing. One year we had a reservation at All Star, for $115 per night. Then I discovered the Rent/Trade Boards and was able to rent points to stay at a DVC Studio and it cost me $98 per night. I immediately canceled the cash reservation at All Star and used the rented points to stay at OKW. As soon as we returned from that trip, we put an offer on a resale contract. And soon after another contract.

So yes a DVC Studio us MUCH better then an Value Resort room.

 

[Rochester Disney Fan]

Compared to the accommodations I like to stay in ( 2BR), I knew we would save money. I just waited until going a couple of years to make sure it wouldn't be something i'd regret committing to. I also joined to force myself to take a vacation like others have said. After " forcing myself" to take a few vacations I realized it wasn't as hard as I thought to get away. Now I have the best of both worlds ( no pun intended).

 

[NewYorkMom]

DVC Financial Analysis


The first tab is for VGF and the second tab is for PVB. You plug in:

• Number of points
• Cost per point
• Closing fees
• Equivalent number of nights in a Disney hotel
• Disney hotel rate (be sure to include taxes)
• Initial annual dues per point
• Assumed rates of increase for annual dues / hotel
• Discount rate – what you would expect to earn if you invested the money

The third tab covers the case of buying points only to rent them. The internal rate of return (IRR) is calculated. You’d compare this to would you would expect to earn over the long run by putting your money in a diversified stock fund.

All the numbers in the yellow cells are meant to be changed by you to reflect your own situation. It's just a model.

Please set your own realistic expectations for the annual dues increase and the discount rate for cash flows, as the figures in the spreadsheet are just placeholders. In terms of the discount rate, pick a ROI that you could actually achieve year-over-year.

While this is an interesting intellectual exercise, The bottom line DVC equation for me is:

family + good times + Disney = Happiness

DVC wasn't a financial decision for me.

SHARED VIA MICROSOFT ONEDRIVE

Here is the same Excel spreadsheet on Microsoft OneDrive:

https://onedrive.live.com/redir?resid=1623A8FF28DE8E30!27793&authkey=!AM1KD0MXwCsnwvo&ithint=file,xlsx


SHARED VIA GOOGLE SHEETS

Here is the same Excel document on Google Sheets.

https://docs.google.com/spreadsheets/d/1B_bhq8-DObziJcxdo7f22igEZwyA9rqUu34jM4A6Iro/edit?usp=sharing

I tried using the spreadsheet but it's VIEW only and will not allow me to change anything in the highlighted cells?

 

[DisBuckMan]

I tried using the spreadsheet but it's VIEW only and will not allow me to change anything in the highlighted cells?

You need to download it from that page, then open it up in Excel.

 

[NewYorkMom]

You need to download it from that page, then open it up in Excel.

THANK YOU!!

 

[Gillyrose779]

I'm a controller and my husband is a senior financial analysts so we love spreadsheets. We always look at the numbers and create spreadsheets with any high dollar purchase. That being said we will talk ourselves into anything if we both want it- financially sound or not. Gotta love emotions!

 

[mort1331]

Disclaimer - I'm an IT guy, not a financial guy, but I do love spreadsheets.

I bought DVC purely as a way to make going to WDW more affordable. We bought our first contract in 2010, more in 2011 & 2012 and our last one in 2014; all were resale. Prior to owning DVC we (2A+1C) would stay in a moderate, usually with free dining. For every single contract I looked at how long the pay back period was for me to break even, comparing it to what we were doing and comparing it to renting points. My comfort zone was a 7-8 year breakeven time period.

Based on my calculation, in 2016 I will hit my breakeven point.

If resale prices ever drop back down to what they were like in 2011-2012 I'll buy more points. At todays prices, they are more than I care to spend.

Maybe a little longer with the way the Can dollar is now, yikes

 

[Wanna be Ariel]

Wow this is really helpful. My DH is a number guy and I just want love Disney and want to buy in. We are looking at doing resale for BCV how can I make this spreadsheet work for me in that case?

 

[jerseyduke]

Nice work mike!

One thing that becomes hard to account for is DVC contracts and their future value. When does the direct price per point top out?

There are people who have bought Direct and can resell their contracts for a profit (not taking time value of money into account). What did OWK sell for, like 45 a point?
Now it goes for like 90. Granted it has been 25 years, and doubling money in 25 years is nothing to be happy about. My sister bought a BLT contract 2 years ago, and with the jump in resale prices, can probably sell it for a 5K profit. 5% return on the purchase price, plus 2 years of dues < 5,000, or at worst right about 5k, meaning 2 years of accommodations were free, if she were to sell it.

Eventually Disney will hit a ceiling on their direct price, but when?

Also, as a PP eluded to, many small business owners and work-a-holics can go years without taking a vacation. A timeshare in a way forces them to do so, and there is some value in that, albiet non monetary.

 

[jerseyduke]

Also just noted on the Poly page, the year 49 projections, assuming 4% inflation, a week in the Poly hotel will cost 22,500$ Maintenance fees will only be 6130.

That has "when i was young, you could get a whole month there for half that!" written all over it...