DVC vs. vacation home

[wdwcoltsfan]

Hi! I am new to this board and have a few questions. I went to the DVC presentation this past week on the Wonder and found some of the information intriguing. Dh and I have planned on buying a vacation home in Orlando, but thought we should at least look at DVC. Some questions that weren't answered are:

1. How easy is it to book a room? We usually book for Oct. and could plan on that at 11 months out, but we also like to take vacations on shorter notice(3 mos.). Will we lose flexibility by having DVC? This is my first major concern. We like the idea of being able to vacation whenever we want.

2. Is the only advantage to your home resort that you can book at 11 months out? Are you ever shut out of your home resort if you book at the 11 month window?

3. What happens at the contract expiration? Obviously, if we buy a home we can keep that until we decide to sell. This is a very major concern of mine. I would hate to think I passed on buying a home only to find out that I could lose my ownership when I'm still at retirement age and hopefully have grandchildren to enjoy it with. Has anyone ever asked Disney? I didn't really grasp the expiration aspect when I was there. I was too busy figuring out how many points I would need!

4. How difficult is it to sell? We are also thinking about this, but yet not discarding the idea of buying a house. We would just push the house back instead of doing it now. If this would be the case, I'm assuming SSR or AKV would be the way to go because of the extended contracts.

Sorry if I'm rambling. I feel like I've digested all of this information in a short period of time and now I've got all these questions!

Thanks!


Rachel

 

[JimC]

Welcome

1. Generally it is very easy at 11 months the exception might be a smaller resort for a holiday. October at 11 months should be no problem.

2. Your home resort and number of points determines the dues you pay and gives you a booking advantage from 7 to 11 months out. This is important for certain resorts at busy times of the year and for certain category of villas.

3. Your rights terminate at the end of the contract. The newest resort, AKV has a 50 year contract. That might be sufficient for your needs. It is deeded so you can sell it. DVC has held value and actually increased in value, contrary to most timeshares.

4. Very easy. We have bought and sold through the Timeshare Store. The sponsor of this forum.

The advantage to DVC is that you pay the dues, enjoy the villa and let Disney worry about the care and upkeep. The house would be the way to go if you are looking at an investment that has long term value. DVC is a prepaid vacation club.

 

[Cruelladeville]

You are talking about a huge difference between DVC's cost and a vacation home's cost in Orlando! I have Marriott and DVC both, but all of those don't come near the cost of a home in Orlando. Even the scuzzy fixer-uppers run $80,000, and homes that are move in ready with a pool are in the hundred thousands. You don't have to pass on a retirement home, you just will postpone it a few months or a year, and ultimately, you won't need nearly as many points as the rest of us do, since you will be using DVC as a weekend getaway, or perhaps you will go to Vero for vacation instead of WDW. If you really are serious about a house in Orlando, you need to rethink where your points should be.

 

[bwvBound]

Well ... let's see. We own both DVC and a weekend/vacation home. So far, we keep the home for our family's use and have not asked it to "earn its keep" as a rental property. How do they stack up?

The Vacation Home - PROs

• The house is always ready for our arrival. No competition for scheduling. No blackout dates.
• Our house. Our rules. (18 over for Easter Brunch? Family wants to visit in a caravan of motorhomes? No problem.)
• Bring the pets! We have parrots ... and the house is furnished with large cages for each.
• All our stuff -- exactly as we left it. Everything we need is already there, no need to "pack" just to go to the vacation home.
• Looking for appreciation as the years go by.
• Wonderful neighbors and plenty of community participation.
• The joy of decorating the weekend home. Finally, a place to show off things handed down from my grandmother.
• Always having an excuse to visit Home Depot. (The vacation home becomes a "free pass" for everything we wanted to buy for our primary residence but couldn't quite justify??)

The Vacation Home - CONs

• Every visit has a "to do" list. We are always fixing stuff. (Not always a bad thing -- much of the work is both relaxing and rewarding. Again, repair work means a trip to Home Depot!)
• 3 hours cleaning on Sunday afternoon before returning to the real world.
• Mortgage + Insurance + Property Taxes + repairs/reserve. (Sure, tax advantages soften the impact.)
• Add to the above Pest Control + 2nd set of phone and utility bills, etc.
• Mowing the lawn. (I've really enjoyed the winter break ... but spring and the growing season is right around the corner.)
• The difficulty of justifying vacations elsewhere. (It just seems strange ... and just a little wrong to go elsewhere??)
• Only one location.

DVC - PROs

• We show up, enjoy the place, leave. (No repairs, no lawn to mow, no irrigation leaks, the plants always look nice, etc.)
• Mousekeeping!
• Multiple resorts w/in DVC ... and a variety of vacation destinations beyond.
• Adjustable "right size" contract. Buy what you plan to use.
• Share costs across a large group of owners.
• Enjoy amenities like full service spa, pool hopping, many restaurants, etc.
• Friendships across a large virtual community here.

DVC - CONs

• Risk of not getting the reservation you wish exactly where and when you want it.
• No pets.
• Pack, lug, unpack ... <vacation> ... pack, lug, unpack. (Although the Owners Locker service really helps on this front!)
• Not my rules ... but I'll abide by them.
• Every visit is wrapped in planning. Scheduled arrival, scheduled departure. Can't simply stay if we want ... and we aren't likely to allow a last minute invitation interfere with our travel.

Both have their joys, risks and rewards. The vacation home is a huge responsibility -- even if you chose to use a property manager to address maintenance, rentals, etc. We'll hope for a corresponding payoff years down the road. Comparatively, DVC is sorta "wash'n'wear" if you know what I mean.

 

[BroganMc]

We have a beach condo and timeshares. The condo was a purchase my parents made back in the 70's when we were kids. It's 2-3 hours away from our home and became the only place we vacationed for the next 20 years.

It's great when we have a last minute short trip in mind. And my mom decorated it with so many nicknacks and pictures it is more like a second home to us. The realestate value has increased 10x the initial investment. All are plusses.

But, it costs the equivelant of a year's of annual dues every month in condo fees. Utilities and maintenance on top of that. We're talking maybe $20k a year just to keep the place respectable. And the one's who clean it are us. Yes, we can and have rented it out but then you run the risk of your renters not treating it well, even if you're dealing with friends of family. (In fact a few years ago enough of my brother's friends used the place it was disgracefully filthy when we got there. We put a ban on any future renters after that.)

Now our timeshares give us the ability to travel anywhere in the world and not worry about the upkeep. In some ways, our timeshare vacations are even better than our beach condo. We've learned to abide by the rules of each (we own Marriott and DVC).

They really are two different things. Keep in mind that a vacation home is a major investment that can hit you with an unexpected bill at anytime. A couple years ago, we were hit with a $10k assessment for repairs to our condo building (new roof and exterior walls). DVC won't do that to you because costs are distributed amongst a large pool of owners.

It really only makes to invest in a vacation home if you expect to occupy it a good deal of time, like for the winter. And even then, I think I'd rather rent an off-site house. Unless you fancy the idea of going into the rental business.

One more thing, if you have a home that's offsite so you'll need your own ground transportation. With DVC, transportation is provided freely, even between the airport and Disney.

 

[macman752]

Two things to be aware of if you are considering an Orlando vacation getaway, homeowner insurance and taxes. The current climate for both is unsettled.

The hurricanes of the past have made finding homeowner insurance difficult if not impossible. So much so that the legislature formed a state run insurance company. Before the hurricanes I had Allstate for 30+ years. They dropped me and I went with another large insurer. That company pulled out of Florida and I was placed in the state run company, Citizen's Insurance. Before the hurricanes my yearly cost for protection was around $800. This year it's close to $4,000.

As for property taxes Florida has something called "Save our Homes" (SOH). This program limits property tax increases to no more than 3% in any one year. SOH is available only to full time, owner occupied, homestead property. Your Orlando vacation property will not qualify. This program has caused a huge inequity between resident owners, real estate investor, second home and commercial property owners.

Until recently I owned a second home in the Orlando area which our son used while he was in college. My property tax increased more than 40% from 2005 to 2006. On the flip side, SOH on my primary residence resulted in a tax increase of less than 3%.

Property taxes will be considered during the upcoming session of the legislature. One proposal is to abolish property taxes and replace them with a 10% sales tax.

DW and I have owned investment property in Florida for the past 25 years. We've liquidated our holdings and are waiting for the insurance and tax issues to settle down.

While we wait we bought DVC during the recent F&F promotion.

 

[wdwcoltsfan]

Thanks for the replies. This is the type of info I'm looking for. I agree that you can't begin to compare the costs of dvc vs. home. The homes we are looking at are $$$ We already have our 20% deposit plus closing costs in savings. Right now we are working on setting aside 6 months worth of mortgage payments. We have thought about the upkeep costs(mowing, pest control and pool maintenance) and it is a lot to consider. We love the area and this is where we enjoy spending our time.

Then, I go to the DVC presentation on a whim and it really got me thinking. We would only have to use half of our "house deposit" to buy plenty of points to be able to make trips to Disney and Vero Beach. There isn't the monthly mortgage payments and the annual dues aren't even close to property taxes and insurance. UGHHH!

You are all helping because you are showing that people do own DVC and a vacation home. Right now we love being on disney property and make 2-3 trips per year. DVC makes sense from that standpoint. We also love AKL and then I saw that AKL is going be part of DVC. UGHHH!(again) I really appreciate your viewpoints and the things you have given me to consider. Thanks!

Rachel

 

[BroganMc]

You are all helping because you are showing that people do own DVC and a vacation home. Right now we love being on disney property and make 2-3 trips per year. DVC makes sense from that standpoint. We also love AKL and then I saw that AKL is going be part of DVC. UGHHH!(again) I really appreciate your viewpoints and the things you have given me to consider. Thanks!

There are people who buy enough points (or have that goal through years of add-on contracts) so they can spend the winter in Orlando in their retirement years.

It is possible depending on the resort and unit size. For instance, I calculated I could stay around 25 days in a Studio unit at OKW or SSR during the month of January. I have 320 points and my maintenance fees this year was around $1300. For around $5200 or so a year, I could get around 3 months in a studio, 2 in a 1bedroom.

Or you can put the cash needed for DVC, buy some Marriott timeshares (especially resale) and get more weeks. I have 4 weeks of Marriott (that can be stretched to 6 with lockoff options, more with II deposits) that cost me less than DVC would have. And those are owned outright so I can pass them onto my heirs. No termination date. Same offsite transportation issues though as owning a vacation home.

I wouldn't trade our in-state beach condo. It is a second home filled with lots of memories and is close enough to be an emergency refuge for us. (Like the year of the Great MidAtlantic Ice Storm when my house lost power for a week and left me with no heat, lights or running water.)

Timeshares just make it a lot easier for me to have a traveling gypsy lifestyle. That's something you may be wanting to do more of when you retire.

 

[littlestar]

We have a combination of DVC points and a Marriott (permanent deed) timeshare. It works great - on-site visits are taken care of and we also get to stay in the wonderful Marriott timeshares in Orlando.

 

[JimC]

Another dual DVC and MVCI owner. Came to the same conclusion as the others -- DVC for Disney and MVCI for the rest.

 

[tom401]

If you are looking for an investment - do the vacation hoome
If you are looking for a vacation plan (dare I say a better plan for vacations) - do DVC

 

[wdwcoltsfan]

For those of you that do both DVC and Marriott, why not buy enough points in DVC to stay on property and off? I know they have the list of resorts(500?) that can be used. What is the advantage to doing both programs?

Rachel

 

[littlestar]

For those of you that do both DVC and Marriott, why not buy enough points in DVC to stay on property and off? I know they have the list of resorts(500?) that can be used. What is the advantage to doing both programs?

Rachel

DVC is VERY expensive on the dues for the bigger units (not to mention the upfront cost to buy the points). Plus, DVC is right to use, which means every year the value is slowly ticking away down towards the expiration date. Marriott owners get preference over other non-Marriott resorts for trades to other Marriotts. A big advantage when you want to go to high demand places like Hawaii. DVC is a small fish in a big pond when you compare them to some other mini systems (meaning DVC doesn't have a lot of locations in their stable of resorts - Marriott does). DVC is really for the on-site Disneyworld fan and the best value is to use it for what it was designed for (onsite stays).

 

[wdwcoltsfan]

DVC is VERY expensive on the dues for the bigger units (not to mention the upfront cost to buy the points). Plus, DVC is right to use, which means every year the value is slowly ticking away down towards the expiration date. Marriott owners get preference over other non-Marriott resorts for trades to other Marriotts. A big advantage when you want to go to high demand places like Hawaii. DVC is a small fish in a big pond when you compare them to some other mini systems (meaning DVC doesn't have a lot of locations in their stable of resorts - Marriott does). DVC is really for the on-site Disneyworld fan.

Okay, that makes sense. I keep learning new things! Sometimes I think I understand it and other times I feel totally confused.


Rachel

 

[CarolA]

My thoughts

1. I tend to book late. I find that if I am flexible about where I can stay I generally have success. No, I won't get BC, but I can usually get SSR or OKW

4. I have sold two contracts, both sold very quickly. One in one day, one in two weeks. I expect that as it gets closer to expiration date that may change.

I would not do a vacation home. I looked into it for Orlando. IMHO housing prices are high, rental market is over saturated so getting rental income is not at all guranteed, and then you either spend you vacations doing upkeep or spend MORE money paying someone. (It's Florida, high humidity, hurricanes, ect.... lots of things to keep up!)

 

[Didney Daddy]

First off, I love BWVbound post. A lot of folks should take the time to read it. Great post!!!!

We own a second in Winter Park, CO. BWV summed it all up. As far as economics, DVC wins hands down. When you do a discounted cash flow analysis of owning a second home, you will be surprised how bad the returns are and in fact may be negative. You have to all your expenses in todays dollars hoping for the future value return when sell less real estate commission.

Most analyses shows that you have to earn 6-7% per year on a home to even break even given the present value of all dollars you sink into a home.

Having said that, homes are emotional. We love our place in Colorado but we also love the mouse. DVC has a few imperfections but given the economic benfits compared to second homes it is a nice complement when we do not want to go the mountains.

 

[Kickapoo Joie Juice]

Well ... let's see. We own both DVC and a weekend/vacation home. So far, we keep the home for our family's use and have not asked it to "earn its keep" as a rental property. How do they stack up?

The Vacation Home - PROs

• The house is always ready for our arrival. No competition for scheduling. No blackout dates.
• Our house. Our rules. (18 over for Easter Brunch? Family wants to visit in a caravan of motorhomes? No problem.)
• Bring the pets! We have parrots ... and the house is furnished with large cages for each.
• All our stuff -- exactly as we left it. Everything we need is already there, no need to "pack" just to go to the vacation home.
• Looking for appreciation as the years go by.
• Wonderful neighbors and plenty of community participation.
• The joy of decorating the weekend home. Finally, a place to show off things handed down from my grandmother.
• Always having an excuse to visit Home Depot. (The vacation home becomes a "free pass" for everything we wanted to buy for our primary residence but couldn't quite justify??)

The Vacation Home - CONs

• Every visit has a "to do" list. We are always fixing stuff. (Not always a bad thing -- much of the work is both relaxing and rewarding. Again, repair work means a trip to Home Depot!)
• 3 hours cleaning on Sunday afternoon before returning to the real world.
• Mortgage + Insurance + Property Taxes + repairs/reserve. (Sure, tax advantages soften the impact.)
• Add to the above Pest Control + 2nd set of phone and utility bills, etc.
• Mowing the lawn. (I've really enjoyed the winter break ... but spring and the growing season is right around the corner.)
• The difficulty of justifying vacations elsewhere. (It just seems strange ... and just a little wrong to go elsewhere??)
• Only one location.

DVC - PROs

• We show up, enjoy the place, leave. (No repairs, no lawn to mow, no irrigation leaks, the plants always look nice, etc.)
• Mousekeeping!
• Multiple resorts w/in DVC ... and a variety of vacation destinations beyond.
• Adjustable "right size" contract. Buy what you plan to use.
• Share costs across a large group of owners.
• Enjoy amenities like full service spa, pool hopping, many restaurants, etc.
• Friendships across a large virtual community here.

DVC - CONs

• Risk of not getting the reservation you wish exactly where and when you want it.
• No pets.
• Pack, lug, unpack ... <vacation> ... pack, lug, unpack. (Although the Owners Locker service really helps on this front!)
• Not my rules ... but I'll abide by them.
• Every visit is wrapped in planning. Scheduled arrival, scheduled departure. Can't simply stay if we want ... and we aren't likely to allow a last minute invitation interfere with our travel.

Both have their joys, risks and rewards. The vacation home is a huge responsibility -- even if you chose to use a property manager to address maintenance, rentals, etc. We'll hope for a corresponding payoff years down the road. Comparatively, DVC is sorta "wash'n'wear" if you know what I mean.

Good post. One more thing to add: You can't control what a neighborhood does in the future (have you SEEN what some of the neighborhoods in kissimmee have turned into?), and Disney's as close to a sure bet in terms of quality as you'll ever see.

The saying about second houses-they're 'gators. Feed the gator, or it eats you.

There was an article a bit back in Money magazine about how many people are losing their second houses to foreclosures. Not to mention the new tax laws in Florida that are VERY second house unfriendly....

 

[barlitz]

macman752, Very good point on the H.O insurance, We have a home on Cape Cod and although the insurance isn't to bad $800. We have a $7500 wind deductable for any high wind damage.
I think DVC is definatley the way to go vs a vacation home near WDW, probably easier to sell if you ever needed also.

 

[wdwcoltsfan]

Good post. One more thing to add: You can't control what a neighborhood does in the future (have you SEEN what some of the neighborhoods in kissimmee have turned into?), and Disney's as close to a sure bet in terms of quality as you'll ever see.

The saying about second houses-they're 'gators. Feed the gator, or it eats you.

There was an article a bit back in Money magazine about how many people are losing their second houses to foreclosures. Not to mention the new tax laws in Florida that are VERY second house unfriendly....

I try to keep up things in Florida, but I haven't seen about the new tax laws. Could you expand on that a little? Thanks!

Right now we are focusing on Windermere and Celebration. If it's Celebration, we won't have a pool.

I did see about the high foreclosure rate. I wonder if it's people who bought second homes thinking they could rent them out to cover the mortgage without realizing how oversaturated the Orlando area is with short term rentals? That is something we aren't looking to do. It would be a second/retirement home if we decide to go that route.

Rachel

 

[jgus]

I like not having to maintain 2 homes.