DVC Financial Analysis

[Chili327]

A very simple breakeven calculation to make is how long do you have to rent out the points before you get your money back.

I use this all the time when comparing contracts even if i don't plan to rent them out.

Agree, keep it simple, the rest hurts my head. lol

 

[TheDailyMoo]

The over analyzing financials of what is supposed to be a fun to use purchase was a bit much for me.

I looked and saw that I could basically spend on DVC what I was paying to stay in a moderate (or heck less than one of those AOA family suites, and that was before they went up even more post skyliner!) and bump up to nice deluxe resorts. There is no "saving" with DVC really for us, we will end up spending more most likely vs not having it. The room is only a minor part of a WDW vacation when you are going to spend a lot on park tickets, food, merch, travel, etc as a part of it.

I agree DVC is not saving me money it is making me spend WAY more on Disney trips than I ever would've...

And our whole family is happier because of it. Money well spent. End of my calculation.

 

[tx911]

I agree DVC is not saving me money it is making me spend WAY more on Disney trips than I ever would've...

And our whole family is happier because of it. Money well spent. End of my calculation.

We're going to Disney way more frequently and spending way more money than we ever would have without DVC. And loving every minute of it!

 

[NerfHerder99]

You mean beyond the lively debate we’ve been having for the last 20 years? ;-)

I happen to like the MouseSavers take:
https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

This is super helpful. Our family currently owns a traditional timeshare that we purchased on the resale market (or should I say, paid nothing since we were patient and waited to find somebody looking to unload it) so when I spoke to a DVC person when I stayed at Aulani last week I was a bit confused on how the DVC points system works. The link was super helpful in explaining how they function and also what happens if I were to go the resale route on what I'd be missing.

 

[intamin]

A very simple breakeven calculation to make is how long do you have to rent out the points before you get your money back.

I use this all the time when comparing contracts even if i dont plan to rent them out.

That's not a bad approach, I would probably add a little bit extra on top of that amount just to account for times when you wouldn't have gotten you exact dates/resorts/room category that you wanted if you hadn't owned. Just like how I wouldn't expect an AUL/AKV owner to be renting out hotel rooms/value studios for their fair value price but otherwise that's a good simplified method

 

[Cfabar1]

While I hear the comments about renting points, for some of us we are unlikely to ever rent/transfer points as a guest. That really undermines the value there.

 

[kanerf]

In the end does owning DVC and walking into your resort make you smile? It does for me, that is all I need.

 

[intamin]

While I hear the comments about renting points, for some of us we are unlikely to ever rent/transfer points as a guest. That really undermines the value there.

That too, I don’t trust random renters and paying to do it through a third party adds to the cost. Also the hassle of it and uncertainty of getting the rooms you actually want which is why like I said I’d probably tack on a little but more than the straight up rental price.

 

[Sprinkles&Sprints]

In the end does owning DVC and walking into your resort make you smile? It does for me, that is all I need.

I’m in this camp too. I did a pretty thorough breakdown prior to buying (so I already have a rough guess as to when I’ll break even)…so from here on out I just want to enjoy it and not think about the math…unless I’m buying more points!

 

[DKZB]

We're going to Disney way more frequently and spending way more money than we ever would have without DVC. And loving every minute of it!

Can’t agree more. We NEVER used travel.When we bought DVC (2021) we started traveling 3 times per year. This February will be our second time in Hawaii in 3 years and I’m taking my dad who has cancer for his first time. We are saving $15-$20k vs rack rate and $10k vs the Marriott next door which is not as nice! Was it worth it, 100%!

That said, I’ve come to enjoy buying and selling DVC contracts as well as renting DVC points. I’ve bought direct, resale and foreclosure. I rent points out multiple times per year and have sold contracts myself. I’ve made money on it so far. Now Im staring down a few contracts that are at a loss. I could just hold them but I’m trying to reduce points so understanding how much of a loss I’m taking is helpful.

 

[HyperspaceMountainPilot]

Can’t agree more. We NEVER used travel.When we bought DVC (2021) we started traveling 3 times per year. This February will be our second time in Hawaii in 3 years and I’m taking my dad who has cancer for his first time. We are saving $15-$20k vs rack rate and $10k vs the Marriott next door which is not as nice! Was it worth it, 100%!

That said, I’ve come to enjoy buying and selling DVC contracts as well as renting DVC points. I’ve bought direct, resale and foreclosure. I rent points out multiple times per year and have sold contracts myself. I’ve made money on it so far. Now Im staring down a few contracts that are at a loss. I could just hold them but I’m trying to reduce points so understanding how much of a loss I’m taking is helpful.

You mentioned “taking a loss” and also owning at 2042 resorts. I don’t recommend buying purely based on dollars and cents, but it is probably more important when thinking about selling. If you can only get $100 after broker fees for BWV or BRV, I presume you’d be better off getting 18 years of rental income minus dues, especially if you’re renting it directly…but that takes time, effort and might come with significant income taxes. Whether or not it’s worth it to you probably depends on your view about the time value of money and what you might get putting that money into alternative investments. I’m about to get more VGC points than I need and I plan to try out the travel agency exchange program. Depending on how smoothly that goes will probably determine if I sell ~100 points I don’t really need anymore at WDW or if I keep using them as a 10-12% tax sheltered dividend (net of dues) that gets expressly earmarked for other vacations.

One of our goals (ok my goals that hubby reluctantly agreed to) was to prepay a large chunk of our annual travel budget before I downshift at work, so even if it’s not the best possible return on our money, it makes it possible to visit Disney going forward for $100-200/night (of dues) in a deluxe studio instead of $500-800/night cash rates, or $250-500/night in a one bedroom instead of over $1000.

 

[tx911]

Can’t agree more. We NEVER used travel.When we bought DVC (2021) we started traveling 3 times per year. This February will be our second time in Hawaii in 3 years and I’m taking my dad who has cancer for his first time. We are saving $15-$20k vs rack rate and $10k vs the Marriott next door which is not as nice! Was it worth it, 100%!

That said, I’ve come to enjoy buying and selling DVC contracts as well as renting DVC points. I’ve bought direct, resale and foreclosure. I rent points out multiple times per year and have sold contracts myself. I’ve made money on it so far. Now Im staring down a few contracts that are at a loss. I could just hold them but I’m trying to reduce points so understanding how much of a loss I’m taking is helpful.

I can't say I've made any money on it, but I've sure made memories on it!

 

[DKZB]

You mentioned “taking a loss” and also owning at 2042 resorts. ... If you can only get $100 after broker fees for BWV or BRV, I presume you’d be better off getting 18 years of rental income minus dues, especially if you’re renting it directly…

Its actually interesting. Using the depreciation method the 2042 resorts depreciate faster than the market value has seemed to decline. In fact, I think it is reasonable position to periodically re-evaluate the current net Market Value as if it were a new purchase and determine if it is still worth holding. I have sold directly many times so I can save some broker fees there also.

I have seen a few "Spreadsheets" mentioned....Including my own. It would be great if people are willing to share. I will scrub the personal details from my and share in the next couple of days.

 

[E2ME2]

Agree, keep it simple, the rest hurts my head. lol

Yes - KISS principle applies!
Going into year #15, and have gone from 210 to 970 points, and from 7-10 Days to 56-63 Days on-property at WDW per year.
We could not have afforded to do that without buying into DVC, so we are way beyond break-even. We continue to dabble in the market, as we just sold some BCV points, and recouped our original purchase value, so those stays only cost us the yearly MFs. We may choose to add on at an MK/Monorail resort, as that's the only area we don't have covered right now. We tend to hit EPCOT & DHS "on the daily" when staying at WV or BCV. We hit DAK when staying at AKV, and we frequent Disney Springs when staying at SSR. MK is not our favorite area, but with TRON and the expected expansions, we are looking to the future to have that as an option.

 

[Brian Noble]

Here's my preferred financial analysis. It is based on advice I've gotten from a TUGger who used to sell Hyatt timeshares in Key West, FL.

"Timeshares are a TOY. You are buying a TOY. Treat it like a TOY."

In that light, the financial analysis is: Can I afford to buy this thing, pay the annual dues on it, and pay for the other costs of a Disney vacation every year? Do I think the vacations I'd get for that are worth the money? Is that something I want to do more than I'd like to buy a <boat/mountain cabin/beach cottage/etc.>?

If the answers to those three questions are yes, buy it. If there is any residual value left, treat it as found money.

 

[thanxfornoticin]

In the end does owning DVC and walking into your resort make you smile? It does for me, that is all I need.

Yes - priceless and somewhat incalculable! And that's why we bought in the first place.... and second place and third place....etc!

 

[Brian Noble]

We're going to Disney way more frequently and spending way more money than we ever would have without DVC. And loving every minute of it!

This is an under-valued aspect of owning a timeshare. Owning nudges you to take vacations, because they are use-it-or-lose-it. I am 100% sure that I spent more money on vacations by owning timeshares than I ever would have just paying as I go. That's because I've taken some vacations with timeshares that I would NEVER have taken otherwise.

A few examples that come to mind:

• An early summer week at Smuggler's Notch in a Wyndham 3BR Presidential with the kids. This condo was larger than our first home. https://www.smuggs.com/accommodation/presidential-owls-17-32/
• A week in a 3BR Penthouse in Lagoon Tower at Hilton Hawaiian Village to celebrate my daughter's graduation from high school. This isn't the one we had--we had the "worst" view, facing away from the ocean/Diamondhead, but the wraparound deck still gave us an ocean view.
• A week in a 2BR BLT Lake View during spring break. (Y'all don't need pictures of that one!

There are plenty of more pedestrian things: A 2BR in Alexandria, VA for Easter/Cherry Blossom; A 1BR at Beach Club for Food & Wine over Halloween; A 2BR in Sedona in late June, combined with an overnight on the South Rim of the Grand Canyon; a week in an ocean view 2BR in Oceanside, CA for spring break; a summer week in a 1BR with my son in San Francisco just off Union Square; lots of other Hawaii weeks on all four islands; frequent trips to the Smoky Mountains; and the list goes on.

 

[Kerry1957]

Although I have degrees in both Economics and in Finance, sometimes a very simplistic view may help you decide. As most of the extensive analyses indicate, DVC probably makes sense if you:

1. Will go to WDW regularly (at least every other year) for the foreseeable future
2. Always stay on property in Deluxes
3. Can plan ahead (at least 7 months)
4. Are able to purchase points without financing

1, 3, and 4 work for me, but I stay at values, moderates, or off property so the decision is easy; DVC is not for me.

 

[enk8fe5w]

This is an under-valued aspect of owning a timeshare. Owning nudges you to take vacations, because they are use-it-or-lose-it. I am 100% sure that I spent more money on vacations by owning timeshares than I ever would have just paying as I go. That's because I've taken some vacations with timeshares that I would NEVER have taken otherwise.

THIS was the killer line from my guide that pushed me into buying. I'm constsntly getting automated emails from my HR department telling me I've hit the cap in PTO time and won't get more unless I start using it. This is going to force me to actually go on vacation.

 

[2010dvcfan]

I justify the value of my DVC every time I check in. I bought in to assure myself vacations, and that's exactly what it has done. If I had to pay $600-$700 a night to stay 7 days or longer at the resort, I don't believe I would do that 4 or 5 times a year. I don't see myself letting go of that kind of capitol on resort rooms multiple times a year. Financially, I might be alright to do it but psychologically I would beat myself up for it. DVC solves that for me.

DVC has allowed us to vacation in a manner that would not have been possible I was a moderate resort traveler at best once a year as a young mother. DVC opened up a level of vacations I probably would never have talked myself into trying no matter my financial means my old frugal mindset would have won out every time.

It also is the tool I used to introduce us to DCL years ago, although I know now not a good use of my points, in the beginning I didn't understand that and would still argue today those 234 points on that first cruise was a "value" if you look at it from the vacation memories we've accumulated in past decade on DCL. We are avid DCL cruises and may not have ever discovered that without DVC offering that option to me to explore as a new member.

When I calculate the break even point of my membership, cost of the points is so far down on the list in terms of "VALUE" it's not even worth mentioning. If I use the contracts till they expire and are worth $0. I believe I still will consider that some of the best money I've ever spent.

Two best gifts I've ever given myself are

1. professional photographs of my child each year
2. DVC

Although both were very expensive to get, they are in my opinion the two things I am most appreciative I spent the money on for myself.