DVC Reasoning

[daneenm]

Hi Gang!

I know there is a whole DVC board on the DIS, but since this is where I 'hang out' I thought I would ask you, my PodCast friends. I hear lots of folks discuss DVC and many are totally thrilled with their choice to buy in to it. I like the idea of it too but, must admit, that when I run the numbers, I cannot see a cost benefit. The things I am considering are...

• GCV would be my choice, since we live in CA and get to DL much more often than WDW

• I like to stay for 4-5 nights in DL, but if I went to WDW, I'd stay 10-12 nights (due to the distance we would travel to get there)

• We typically travel in summer months or on school holidays, due to our children's school schedules

• I was looking at resale points running at about $99/point (understood the GCV are so new there are not many resales available, I was just looking for a price point to play with)

• It seems like with the buy in + annual fee, I am better off staying at the GCH rather than buying DVC

So, what am I missing? Please note, i am not at all critical of you who have found it to be a good deal for your family - I am looking for your insight. I would love to be able to argue in favor of buying in to it and am trying to approach it from an angle that, perhaps, i have not thought of.

 

[exwdwcm]

hmmm, i haven't priced out GC since we travel to WDW mainly. However, the kicker for us was just the fact that we plan to come back at least every 2 years, if not every year (at least while our DS is little). I've never stayed in a value (but hope to!) and we typically stayed in the mods. However, on the last few trips, we experienced AKL and WL. DH said he was never going back- he loved the deluxes. So any future trip was going to be deluxe.

I don't think DVC is worth it unless you typically prefer the deluxe accommodations (or multiples rooms elsewhere for larger families). Knowing my passion for the parks, DH bought in for our 10th anniversary for me! We bought 200 pts at BLT. AKL was a second choice. We chose BLT because we like the proximity to the MK since we have a toddler (and hope to have another child next year or so), love the monorail access and like dining at the monorail resorts, so it is convenient for us. The decor isn't our style at all, but all the other things won over for us and the location. We know our son will grow up and being so close to the MK won't be a big deal, but i love MK, so being close is great no matter the age. And again, we like the dining options on the monorail loop. Hopefully we will get to try out the other resorts- i can't wait to try out Y&B clubs if i can ever get in there. I know they say to buy where you want to stay, since getting somewhere else is never guaranteed, especially during busy seasons. So we bought BLT knowing we would love staying there no matter what. But hopefully we can wait list for the other popular ones and try other resorts down the road too. I think we will try and get in an epcot resort for next October, which i know will be super tough with F&W. But worth a shot!


If you buy GC, will you be happy with whatever you can get at WDW since you travel at busy times - i know SSR is probably the one available the majority of the time. If you are okay with that, then that works, but if not, buy where you really want to stay. however, since you do DL more often, you have to consider that too. tough call!

The maintenance fees are not too bad. I think we paid like $600-700 this year. We plan to pay off our contract in full by end of this year, so all we have going forward is that maintenance fee, which is manageable.

It is a huge expense overall, and certainly not an investment in the traditional sense. The thing that got me was now i always have another trip to look forward too!

i am a newbie to DVC, so my opinion doesn't mean much. heck, i am still learning something new everyday. talk about confusing. I don't even bother to explain the whole points thing to friends anymore.

 

[OKW Lover]

Caution, illogical ravings of a recovering accounting major to follow:

We've owned DVC since 1995 so our economics are vastly different than yours considering we paid somewhere around $65/point. But even then I never based the decision on a pure cost/benefit analysis. I just looked at it as pre-paying my future Disney vacations.

Some other items you may want to factor into your analysis;

• Once you buy your points, they don't lose value in future years. (ie, it won't cost you more points per night) while a hotel room will most likely cost more. [To get technical, Disney can re-allocate the needed points so your stay may require a few more or less points, but it shouldn't be a deciding factor.]
• There are DVC discounts that are available from time to time. However, you can't count on any particular level of discount. Right now its not uncommon for DVC members at WDW to be eligible for discounts on meals at some restaurants.
• There may be a discount on park admission. Currently, DVC members can get $100 of a WDW AP, or $125 off a WDW PAP.
• A portion of your annual membership fees may be tax deductible.
• The interest on your DVC mortgage may be tax deductible.

 

[gkrykewy]

I'm not sure what numbers you're looking at, but it seems likely that if you intend to stay at the GCH regularly and pay cash, DVC would in fact save you money. The rule of thumb is that if you stay on property every year or two in deluxes, it's essentially a slam dunk.

If you're looking at studios, something like 180-200 points would probably meet your needs. Maybe a little less. I've heard that GC is nearly sold out retail, but there should be more and more resale contracts popping up.

 

[daneenm]

Thanks for the input so far. I really appreciate it.

I guess my first mistake was comparing the room price at GCH with points for a 1 BR villa. I should be comparing studio to room. I will go back and do that and see how it comes out.

We are absolutely deluxe resort folks. Primary reason, queen beds. Secondary reason, we don't vacation often so we choose to treat ourselves when we do. This is why I thought I would not be surprised by the cost. Comparing room to studio would be a good start, I think.

Going back to rerun my very simple analysis

 

[tlcoke]

I bought in at OKW this past spring. I never saw myself buying into DVC, but the special $90/pt buy-in with 100 pt minimum buy-in sold me when I looked at it this way - $9000 for 100 pts, I had reservations on a bounceback deal for my pre & post PCC 2.0 stays that totaled $2500. This was money I was going to spend at Disney. I took that money and invested it toward DVC, which was a nice down payment towards my points. Now all my future stays are "paid" for through 2057 with the points I bought.

 

[gkrykewy]

Thanks for the input so far. I really appreciate it.

I guess my first mistake was comparing the room price at GCH with points for a 1 BR villa. I should be comparing studio to room. I will go back and do that and see how it comes out.

We are absolutely deluxe resort folks. Primary reason, queen beds. Secondary reason, we don't vacation often so we choose to treat ourselves when we do. This is why I thought I would not be surprised by the cost. Comparing room to studio would be a good start, I think.

Going back to rerun my very simple analysis

Ah yes, that makes quite a difference. The space isn't a big deal for us, so we always book studios, which are an apples to apples comparison with regular deluxe rooms. It's costing us 137 points for a week in a GC studio starting 9/28; can't wait! I would never have been able to justify paying cash for a week in the grand.

 

[ADP]

After our family crunched the numbers the one thing I couldn't stop noticing was the hedge on inflation. Disney resort prices go up year over year. I kept noticing 4% a year. Make sure you add that into your overall equation.

 

[dpuck1998]

What Aaron said! It may be a push or similar right now, but how about 10 years from now? The price of a hotel stay will only be going up, not down.

 

[simmons_m]

How far in advance can you plan your Disneyland trips?
If it is 8 months out or further dvc may make sense. If it is less than 7 months, it may not.
We own at two dvc locations, and plan on trips every two years. We also plan far enough in advance for the Florida trips, that the "buy where you want to stay" argument works well for us. We bought in via resale, but added on directly via dvc.
We considered GCV, however our trips to So Cal are usually last minute trips, so we would not benfit from the 11 month booking window.
When I reviewed the numbers, i figured that we would break even on dvc after 5 trips. After booking a week in 2 bedroom/boardwalk view, in march this year, I have adjusted the break even to 3 trips based on rack rates. You can play with the numbers, and argue multiple points, but for us it seemed to make sense based on our travel (usually 9 to 11 night trips) and our ability to plan in advance. We also now know that we prefer 1 bdrm accommodations vs a studio, which also impacts the break-even point.

 

[MM32830]

Something else to factor in. You don't pay sales tax when booking your room with DVC points. For a typical $3,000 7-day reservation, with a 15% resort tax, that's $450.00



_______________
Armand

 

[LilGMom]

Like others have said you have to figure in a resort rate increase. When DH & I started going to WDW 2-3 times a year we could get a moderate for $88/night (with tax and during regular season) and now those same rooms are close to $200/night. We were starting to feel the pinch of staying at the Deluxe resorts which is where we wanted to be. The resorts have been increasing, over the last ten years, around 4.5%/year while the increase in DVC maintenance fees has only gone up around 3%/year. Our "break even" point, with increases figured in, is around 5-6 years and after that time we'll be saving money on our trips. We didn't view it as an investment into anything other than our future vacations. It isn't for everyone but we are glad that we did it and only wish that we would have done so sooner.

Plus with DVC we have the luxury of sharing bigger lodging accommodations with others so that they can take a trip that they might not have taken otherwise.

 

[daneenm]

Thanks again to all of you for your insights.

Still considering, but there are a few basics I had not been adding to the equation, like the price of a stay going up every year. Lots to think about!

Last question...are you aware of any downside to buying resale through a reputable company?

 

[dmwang9]

I completely agree with all the previous posters regarding hedging against inflation, comparing apples to apples, and so on. When I was considering my own DVC purchase, I definitely made more than my fair share of spreadsheets as well. (Hey, I'm a math teacher, so it's in my blood.)

Another thing to consider here might be the fact that (at least for me), I considered DVC a luxury purchase and not an investment. Don't get me wrong -- the financial aspect is definitely an important one -- but with a luxury purchase, an additional question that might be worth asking is, "How much pleasure am I going to get out of this purchase, and is that pleasure worth the money I'm going to be paying?" For me, that's what ultimately made up my mind. I realized that the idea of having enough points to spend 7 - 10 days at WDW every summer between now and 2042 was something that made me _really_ happy. I don't treat myself to very many things, but I decided that I was going to treat myself to this. Yes, I'm going to hit my breakeven point in 8 or 9 stays, but ultimately, the financial aspect wasn't the real deciding factor for me.

 

[dpuck1998]

Thanks again to all of you for your insights.

Still considering, but there are a few basics I had not been adding to the equation, like the price of a stay going up every year. Lots to think about!

Last question...are you aware of any downside to buying resale through a reputable company?

No downside to buying resale. I have on contract resale and the other from Disney. No difference as far as Disney is concerned.

 

[parrotheadlois]

We bought re-sale and were very happy. Happy enough to encourage my sister who will be doing the same.

We're at BCV, she will be at OKW.

It's great being able to invite people to share the Disney joy!

 

[dalt01]

you can rent others points and stay in the same style for a fraction of the cost and no annual upkeep outlay..............i call it DVC by proxy........example, we are staying at OKW (studio) for 8 nites for 920.00 total.... i do not have to send them 6 or 8 hundred each year to mow the grass and paint the rooms..........if i cannot go the next couple years i dont have to worry about disposing of points...renting them out.....giving to the in laws.......losing them..........if disaster strikes i dont have to list them on The Timeshare Store and deal with things such as ROFR.....their is never a shortage of rentable points....that alone should tell you something. if you want an investment in Florida right now buy a property for half of what it is worth and sit on it for 5 years.

 

[Petraman]

daneem...

Not much in the way of a downside of buying used. Only one you need to factor in is closing costs. I know when I bought an addon contract recently, used required you pay the closing costs (around $400) but buying direct there were no closing costs. Also, if you have to finance, if you buy direct you have Disney financing (which I heard was ridiculously high interest rate right now) but if you buy used you will have to find your own financing.

Now to the numbers... I ran some info to give you a comparison. I ran them for October. I know you travel in the summer, but I can't pull up any room costs for next summer yet if you simply stayed at GCH.

I ran 2 comparisons... one staying 5 days Sun-Thu, and one staying 5 days Fri-Tue. The weekend stay will cost more.

Studio stay 100 points or 108 . Current cost then would be $394 / 425.32 ($3.94 per point MF)

Stay 5 days at GCH $1900

If you bought 150 right now at $100 = $15000. Even if you simply figured using it for 15 years then apply $1000 each year, that still makes DVC cost $1394/$1425.32

I realize that is a pretty simplistic way to view it, but it should give you a good sense of the value.

There is one more thing to consider as well. One very good thing about DVC is, unlike any other timeshare I have ever owned, it does retain value down the line. People who bought into DVC 15 years ago can actually sell their points today for equal or greater than what they bought them at. I bought 4 years ago, and by the time you calculate the value of the free season passes, the cruise, etc. my points have only lost a small percentage from what I paid for them. If you buy points, use them for 10 years and get the discounted cost on all your trips, then sell the points, you still will have saved quite a bit compared to staying direct.
Just a thought....

 

[BriarRosie]

I bought in because of the frequency of trips I was making to WDW and the output of money I was putting into the trips would have made sense buying DVC.

I bought pre-construction at Beach Club when it was $75 a point (with a $5 off per point incentive, making it really $70 per point!) I bought the minimum amount of points, but like many DVC owners, I wish I bought around 50 points more. I didn't think I needed more at the time.

When I calculated the amount I spent for points and factored in yearly dues, I figured I was staying at deluxe resorts for value resort prices. I couldn't pass that up.

 

[peanut1967]

We are from the Uk, and were a breathes away from signing on the dotted line. But then realism set in and we may only be able to get across every 2 - 3 years so not really a option for us....BUT...our last stay we stayed at AKL with rented points...this is the way we will go in the future and maybe in the future when I win the lottery I will buy into DVC...reality we really have not cancelled it out, but it needs to be the right time for us because coming from the UK we need at least 14 days of points.
Angie