DVC Reasoning

[jpeka65844]

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

We bought in for an initial investment of around $15K. Our large family trip (12 people in 2 2bdrm villas) would have cost us around $9K in lodging alone. That math alone tells us that DVC is a good idea.

BUT, if you are ok with staying at a value-priced resort and using a room only to sleep and shower, then DVC might not be for you.

 

[daneenm]

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....

Wow! Thanks for the analysis! The summer rates seem to be quite a bit higher, but your approach is similar to my 'simple' approach too. I think, initially, I expected it to be a lot fewer points for high season than it really is - and GCV seems to be higher than almost all of the rest. I have reset my thinking based on everyone's input here.

I wonder what the points will be for the resort in Hawaii. This is what actually got me started on the topic, to be honest. While we would visit DL much more often, it would be nice to visit Hawaii too. Believe it or not, we have never been!

--Daneen

 

[daneenm]

...but it needs to be the right time for us because coming from the UK we need at least 14 days of points.

This is a factor for me too Angie. For us to make the trek to WDW from California, i would want to stay 10-12 days. Obviously, we don't do this often since it is cost prohibitive. We visited in 2007 and hope to come back next summer.

So, I am factoring what it would cost in points for that kind of stay as well as our shorter treks to DL. I must say I am surprised at how many fewer points WDW locations are than GCV.

 

[mjp12831]

You have a family of 4, so it's easier.

I've looked at it obsessively - we have 3 kids, so with a fam of 5 it's harder to figure out/justify.

There are only one or two places where a family of 5 can stay DVC (without moving up to accomodations for 8). So while a family of 4 might be able to buy in at 100 points (resale) allowing them to get an AKV studio in July each year, a family of 5 needs to have 225 points to get into a 1 br vacation home (where you still are kind of cramped). The extra family member means almost having to double your point buy in, and doubles your annual dues each year.

I like the analogy to it being a luxury buy - that's the only way we could justify it for the fam of 5. With 4 I could justify it much easier.

 

[mjp12831]

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.

Resort prices go up on the one side - maintenance fees also go up on the other.

The analysis will also be more favorable to DVC if you can buy it with cash rather than financing. If financing you have to add in your interest costs.

 

[3guysandagal]

I wonder what the points will be for the resort in Hawaii. This is what actually got me started on the topic, to be honest. While we would visit DL much more often, it would be nice to visit Hawaii too. Believe it or not, we have never been!

--Daneen

Here is Aulani's point chart....

http://advc.disney.go.com/media/dvc...intsChart_DisneyVacationClub_AulaniVillas.pdf

 

[Petraman]

dalt01...
You do bring up one of the most important things a person must consider before buying DVC. Is Disney the place you will go on a regular basis? No one should ever buy ANY timeshare if don't plan on using it regularly. So if you are the type that only does Disney sporadically or every 3 years or so, then probably best not to buy. dalt's point is a good one.... the key is everybody is different so really people here may have differing views and none of you are wrong. I would like to try and give a little more clarity to a couple of your points though that anyone looking at buying needs to see...

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..........

Wow!! $920? So you obviously rented points to do that. So let's do the math. I would guess you rented 92 points @ $10/pt to do your ressie. OK, the total cost of "annual upkeep" for those points this year would cost $418. Now if you want to include your original investment in buying points, you could buy 100 points now for around $7000 ... we'll make it $7500 for easy math. If you plan on coming at least 15 times, the cost for each trip from t he original investment would be $500. That simplistic comparative puts your total expense at $918 .... before anyone flames this math, I know it does not include interest, etc. if you had to finance, this is strictly to give you an estimate on how close the costs are. The cost is about the same as renting points, and cheaper than if you booked at the very discounts that are offered in these resorts. They key here is after renting points, you have nothing to show for it. When you use your purchased points for same ressie and similar cost, you still own your points, and they do have a lasting $$ value.

...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..........

Excellent point. If you don't make trips at least every other year, this can become work trying to maintain your points. But people should know it is really not "hard" to do, but if you aren't careful, you could "forget" to take care of them. Banking points is as simple as one mouse click. I personally have never rented out points, and I really don't want to. Everybody says its easy, but it looks like work to me Let me just say though, I bought a reasonable amount of points and so far it have never been a problem. Most years I am "borrowing" a few more points from next year to make this trip great.

...if disaster strikes i dont have to list them on The Timeshare Store and deal with things such as ROFR

Actually, ROFR is a benefit for someone who owns points, not a negative thing. If you need to sell your points, you put them up for sale (let's say you ask for $75/point and someone offers you only $72), then you decide if any offer given is satisfactory to you. Then they have to submit the sale to Disney for their approval. If they look at it and decide that $72 is too cheap, they exercise Right Of First Refusal and they buy the points from you instead of the buyer who offered you the deal. So either way, you sold your points for what you were willing to sell them for. This actually works in favor of owners of points, because Disney keeps anyone from deflating the value of points by dumping them at low prices. ROFR is no biggie at all when selling.... now if you are trying to buy used points, then you don't like ROFR

.....their is never a shortage of rentable points....that alone should tell you something.

Yes it should tell you that people have ways to make their points actually earn them money when they aren't going to use them. Cost MF for this year at OKW is $4.87/point. You can rent them for $9-10/point. You will notice there are a lot of people who clearly own points as an investment just to rent them out. There are a lot of points available, and the people who know how to do it, have no problem renting them out.

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.

Couldn't agree more. No one should look at purchasing into DVC as an "investment property". It is not there to make you money. It will not even save you money if ...
....Disney is not your key destination every couple years at least
....you are the type of people who would just as soon stay offsite and save $$ than stay at deluxe resorts onsite


All that said, DVC is simply NOT for everyone and clearly not a value for everyone.
But I promise you it CAN BE a phenomenal value if it fits your needs.

 

[dalt01]

Petraman.............thank you for the comrehensive, logical and if i may say so, diplomatic, counterpoint.

 

[Miss SD]

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.

I haven't read all of the previous posts, but wanted to chime in that we too only travel to DL and usually stay at the GCH. I figure it would take at least seven years for us to break even if we bought DVC. (Comparing studios to hotel room rates since it's just the three of us.) That's way too long for my comfort. Due to our daughter's school schedule, we have to travel in the summer and at Christmas. The points needed at that time seem awfully high.

Also, the DIS boards helped me realize that using DVC points for anything other than DVC units is not cost effective. The DVD that DVC sends out seems to emphasize the program's flexibility. But all research points to the contrary, especially when the points needed for an Adventures by Disney trip, for example, keep increasing.

I can't offer much help in your decision-making process. Just wanted to let you know that there's another NorCal'er out there who wants to see it as a good deal, but just can't get my cheap self to pull the trigger.

 

[crazydisneyman]

We bought ours from the Timeshare Store, a DIS advertised business. They really made it easy to navigate through the paperwork and financing.

We would not change anything. We have already recouped alot of our money because we have stayed in 2BD. The extra space is amazing. We were able to stay in $400 - $700 rooms for basically a yearly maintenance fee. We have also saved alot using the various discounts.

I looked at Deluxe rates at WDW recently and I was shocked how expensive rooms have gotten. $400-$500/night for Contemporary or Poly. http://www.wdwinfo.com/wdwinfo/disney-rates-deluxe-2010.htm#contem Yikes! And these are just normal hotel rooms with a view, not 1 or 2BD. I can go over to BLT and stay on points with no worries about cost cause the points are purchased.

I agree with ADP, do the math factoring in inflation.

I would take the money you would spend on your next vacation, and use it to buy points.

 

[*NikkiBell*]

I just wanted to chime in here as another DVC owner. I'm not into number-crunching on these threads, but wanted to say that purchasing into DVC was one of the best things I have ever done. I have guaranteed trips for years to come and love that feeling. I love, love, LOVE DVC!

 

[Petraman]

Petraman.............thank you for the comrehensive, logical and if i may say so, diplomatic, counterpoint.

Good news! i am not running for office, so everything I said I meant! I thought you made some very good points that often get overlooked.

We Disney lovers all got to stick together!

 

[Petraman]

This is a factor for me too Angie. For us to make the trek to WDW from California, i would want to stay 10-12 days. Obviously, we don't do this often since it is cost prohibitive. We visited in 2007 and hope to come back next summer.

So, I am factoring what it would cost in points for that kind of stay as well as our shorter treks to DL. I must say I am surprised at how many fewer points WDW locations are than GCV.

It is quite shocking when you look at how few points you can get by with at WDW (AKV value is actually very nice IMO). When we first bought, we only considered going to DLC... it is closer and way simpler for us than WDW. So we bought points so we could stay at GCV, Disneyland Hotel, or Paradise Pier. Then when we scheduled our first trip to WDW we couldn't believe how many points we saved! They kind of balance out though, because we always stay longer at WDW than DLC.

It sounds like you folks have the same idea on how you want to vacation at Disney. Whatever way you choose to go, just remember it really is about the Magic of Disney you experience there, and ANY Disney trip can be amazing. We have some amazing memories of Disney long before DVC.... staying at the Candy Cane Inn, or Park Vue Inn. We even took our 5th wheel trailer one year and parked in a trailer park with disney shuttle service! Sat on the roof of the trailer and watched the fireworks. Those were treasured moments for all of us. So in the end, you can't make a mistake in what you choose to do, as long as you still take advantage of these Disney moments in your life. Take what you can do and sprinkle it with Pixie Dust... you won't be sorry

 

[paulasillars]

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

Going every 2-3 years was one of the reasons we bought. We have been members since 2003 and have gone twice since (2005 or 2006 - I forget which), 2008 and are going again in Oct. We bank/borrow to ensure we can easily stay 2-3 weeks at a time on our 160 points.

Before we bought in at SSR, we'd only stayed onsite at AS Music once, immediately after 9/11. Prices dropped to a price we could afford for onsite, otherwise with the cost of the long haul airfares ($ thousands) onsite was just an extra expense we couldn't justify.

We decided for the followings reasons to buy in -
1) it reduced our currency exchange risk year to year, we can easily afford the dues even if the exchange rate is rubbish
2) we own a piece of the magic
3) we can use it elsewhere if we choose, even here in NZ, we have resorts we could go to on the rare occasion we couldn't go to Disney - we'll probably never do it but its an option
4) we want to stay onsite in a nice hotel but are too thrifty to pay their prices - now we can
5) We always book at the 11 month window - we usually plan trips 18 months out so thats not an issue for us

Love DVC!

 

[DrMomof3]

We've been on the fence about DVC for almost 3 years now. We're a family of 5 and have been averaging 1-2 trips to Disney during that time frame. Our issue has been trying to avoiding financing a "luxury." We have enough $$$ to pay for our trips but not enough cash to "pre-pay." While I have no doubt that DVC would save my family money in the long-run, we're reluctant to take on this type of debt.
And then there are my snob-factor issues like daily housekeeping (yes, I know you can pay extra for it but, man, it's pricey!).
I know many happy DVC members at work and I think that we will eventually join them! (And I smile whenever a non-believer tries to convince me that my kids will eventually outgrow Disney. DH and I haven't yet!)

Amanda

 

[Petraman]

....While I have no doubt that DVC would save my family money in the long-run, we're reluctant to take on this type of debt.
And then there are my snob-factor issues like daily housekeeping (yes, I know you can pay extra for it but, man, it's pricey!).

Well spoken. I really don't like not having a cleaned up room when I come back from the parks, but I am WAY tto cheap to pay extra for it.

I know many happy DVC members at work and I think that we will eventually join them! (And I smile whenever a non-believer tries to convince me that my kids will eventually outgrow Disney. DH and I haven't yet!)

Amanda

Man, we can't wait for our kids to outgrow Disney so we can do Disney all by ourselves! We will cruise every year..... woohoo!!

 

[daneenm]

And then there are my snob-factor issues like daily housekeeping (yes, I know you can pay extra for it but, man, it's pricey!).

Glad to see you point this out. I thought I was the only one who would be disappointed without daily maid service on vacation. It is on my list of cons in my comparison. It is the little things, you know? I do maid service for 4 every day of the year and look forward to someone else doing it (and coming back to a nicely made bed) when I am on vacation.

 

[angelmav]

We have been on the fence too, almost bought twice, but there is a different reason we havent been able to pull the trigger. Home prices have absolutely crashed in Florida, and when I look at buying a vacation home versus points for a fairly similar investment, well, it is hard to justify that in my mind.

 

[MM32830]

We have been on the fence too, almost bought twice, but there is a different reason we havent been able to pull the trigger. Home prices have absolutely crashed in Florida, and when I look at buying a vacation home versus points for a fairly similar investment, well, it is hard to justify that in my mind.

While vacation homes in Florida are substantially less expensive than they were a few years ago, they are still way more expensive than buying into DVC unless you plan on staying down here for more than a couple of months a year.

Not only do you have a mortgage, but you still have all the expenses of a typical home. Utilities, insurance, property taxes, etc. etc. On top of that, most homes down here are in either a Homeowners Association or Condominium Association, so you have to add in those fees.

Florida real estate is a real bargain right now and if you have any plans on retiring down here in the future or at least becoming snowbirds, then this is a great time to buy. Just make sure you buy into a nice neighborhood with great neighbors. If you aren't living here full time, your neighbors can be your biggest asset.



__________________
Armand

 

[DrMomof3]

Glad to see you point this out. I thought I was the only one who would be disappointed without daily maid service on vacation. It is on my list of cons in my comparison. It is the little things, you know? I do maid service for 4 every day of the year and look forward to someone else doing it (and coming back to a nicely made bed) when I am on vacation.

This is why I don't enjoy "renting a house" for vacation. My DH is a bit of a slob baseline and it gets worse on vacation. Add in 3 small children and vacation can turn into more work than being home! Daily maid service is definitely one of the things I look forward to!!!
I love the DVC properties. I love the extra space. But I don't want to be the only one cleaning up.

Amanda