DVC vs. vacation home

[JimC]

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's best value is DVC resorts. Most often even Disney collection trades are not as good a value as you can get with cash. There are exceptions but I believe this general principle is valid.

For example my MVCI Cypress Harbour costs about 35% of the equivalent points for an OKW 2 bedroom week. It also costs about 73% of the annual cost to own.

 

[JimC]

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

There is a heavy investor real estate market in Florida. They buy portfolios of homes in a community. The purchases are laden with debt (little or no equity). They hope to flip or rent and flip. It is very easy for an investor to walk away from a portfolio with so little equity at risk and no personal liability on the defaulted debt. The overextended homeowner is not much different here as the rest of the country.

Home owner insurance is more difficult and expensive to purchase along the coast. Inland it is a bit better. However, even inland costs are higher and the availability more limited than PA where we used to live. I could not get Nationwide to issue a HO policy here in Florida and I had been a two plus decade customer of Nationwide in PA. I am with St John's now.

The tax laws of Florida are similar to other states, only a bit more intense. For example it is common for hotel taxes and rental car fees and the various airport fees to assess visitors or casual residents for local infrastructure. This is common all over the world. Timeshares are also hit with these taxes -- Hawaii being one notable hot spot for this. Florida property taxes are designed in a similar fashion. Not to dabate the point as the arguements on this go from sound to extreme on both sides of this issue. But it does alter the dynamics a bit.

Now for the other side. Florida continues to attract a net plus 1000 people a day and the amount of land is relatively fixed. So if you want to retire to Florida you can bet that the cost to do so will be affected by the limited supply of real estate and the burgeoning demand for housing. The hyper real estate market and it recent correction aside, the long term view is probably quite good for real estate owners. If you want to retire here and can afford the cost of real estate now, it may be worthwhile to make the investment so that you are in the market. If you prefer to relocate later at least you have locked in the local market fluctuations to your general advantage.

 

[BroganMc]

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?

Marriott's advantage:

1) Cheaper upfront cost. A two bedroom unit at Grande Vista cost us $17,900. Annual Dues are in the neighborhood of $500. Our week is good for Platinum season, meaning Spring and Summer as well as Easter & Christmas. It's also a lockoff unit, so we can split to two weeks stays: one in studio and one in a 1-bedroom. Or we can convert the week to 110,000 reward points and stay in a hotel for 1-3 weeks depending on the category.

2) Marriott's all offer free internet access.

3) Depositing to Interval International, we get an extra 2 years use on our weeks. We have full membership in II so can search availability on the fly. Generally, availability is fabulous at the Orlando resorts year round. And when you do an II trade, you can wind up with a unit bigger than your deposit: a 2bedroom for a 3bedroom, a studio for a 2bedroom, etc.

4) Marriott has more locations worldwide than DVC offers. If you own 2 weeks or more, you get 13 months to book your preference.

5) I've yet to have any problem getting a handicapped Marriott room on short notice. They don't block it out like Disney does so the request goes to the hotel about a month before check-in. They'll even let me pick my building and room number.

Now why I went with Disney?

1) Free onsite transportation to Disney parks and resorts. As much as I love Marriott, it becomes tedious when your travel group is sharing only one car. There's just no easy way to split up between the late sleepers and early risers. Also, you can't fly in without renting a car. Since I use a powerwheelchair and need a ramped van, the cost of a rental (assuming I can get one) is around $100 per day.

2) The annual pass discount is nothing to sneeze at.

3) I own SSR because it is within walking distance of Downtown Disney. My Marriott resorts aren't within walking distance of anything.

Like others, the way I work both is DVC for my Disney immersion and Marriott for my world traveling. Marriott will get me to London this summer, in a hotel right across from Big Ben. DVC will allow me to spend time at the parks while my dad takes the van off to a business conference on I-Drive.

 

[PatriciaH]

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.

Property taxes in FL are based on the sales price of the home.
There is talk of doing away with property tax altogether for primary residenses and raising the sales tax to 8.5% or more-the highest in the country.
Other ideas have been to roll back property tax for primary residences and also let people buying a new home in FL take their old property tax with them-portability. Many people here can not afford to move to a newer home/new location since their taxes will go WAY up (based on sales price.)
Property taxes in Celebration are very high and there is talk of incorporation which will raise taxes even more. We are paying close to $6,000/year in taxes, HOA and condo fees on an 800 sf condo. This is on an assesed value of $130,000. When we sell the taxes will double for the new homeowners based on the sales price!

 

[JimMIA]

Property taxes in FL are based on the sales price of the home.
There is talk of doing away with property tax altogether for primary residenses and raising the sales tax to 8.5% or more-the highest in the country.

The bill that passed a Florida House committee yesterday calls for eliminating property taxes which support local governments on homesteaded property, second homes, and business property. That's actually only half of the property taxes we pay -- the other half supports schools. To partially make up for that loss of revenue, the proposal is to raise the statewide sales tax from 6.0% to 8.2%. Some counties have additional local sales taxes on top of that.

Property taxes in Celebration are very high and there is talk of incorporation which will raise taxes even more. We are paying close to $6,000/year in taxes, HOA and condo fees on an 800 sf condo. This is on an assesed value of $130,000. When we sell the taxes will double for the new homeowners based on the sales price!

HOA and condo fees are not taxes. They are fees homeowners pay to maintain their developments. None of that goes to the governmental unit, and none of that will be affected in any way by anything the legislature does or does not do.

In Florida, property taxes are constitutionally capped at 10 mills (1%) for regular taxes and another 10 mills for schools. In your case, your actual property taxes should be no more than $2,600 per year.

There could be other "fees." For example, we pay extra fees for fire rescue improvements, streetlights, solid waste, water & sewer, flood control, etc, etc. Those fees would not be affected by the legislature either.

 

[dwelty]

We have a vacation home in Big Bear Lake(So Cal local Mountians) about 1 1/2 hour from our home. The cost of yearly maintenance, taxes, and upkeep is far more than our DVC. We go there primarly on weekends for snowboarding/skiing in the winter, and to beat the heat and boating in the summer. There are some advantages we see, one is that we don't have to fly to get there, two is it is always avaliable on short notice, and 3 is that if we ever got in a pinch financially we could sell and get a great price for it, and in 2054 it will still be there and at full value.

Bottom line for us though, between trips to DLR and WDW, we will spend more time on Disney Property than we will at our Vacation home property over the next year. I don't know about Florida, but in California, a vacation home is truly an investment because property values always go up here.

 

[wdwcoltsfan]

Oh, I agree that you can't compare the cost of home vs. DVC. It's apples/oranges. We are trying to decide what best suits our needs. Right now, DVC fits our needs very well, but we are also looking to the future to make sure we are making the right decision.

I really appreciate everyones input. Some of the things we had thought of, but others we hadn't. AKV is what made us really consider it. We average 2-3 trips to Disney per year and we stay at AKL 1-2 times. Now, if they ever have DVC at the Poly, we will try to move in permanently! You know, 6 months at AKV and 6 months at Poly!

I am going to speak to a guide about some specifics of buying into AKV. We wouldn't use the points this year as the trips we have planned we have a really good rate on. I'm not sure we should rush to purchase if the points won't be available to use anyway.


Rachel

 

[Kickapoo Joie Juice]

The bill that passed a Florida House committee yesterday calls for eliminating property taxes which support local governments on homesteaded property, second homes, and business property. That's actually only half of the property taxes we pay -- the other half supports schools. To partially make up for that loss of revenue, the proposal is to raise the statewide sales tax from 6.0% to 8.2%.

I'm confused, Jim, does this mean there will be less money to fund schools in florida?

From what I understood it was the people who had homes in florida that were not florida residents were the ones that were getting hammered with the taxes?

 

[jdvm]

What a great thread....and bwvBound's post is about the best analysis you'll get. I sat in a condo hotel on Longboat Key near Sarasota in 1992 and considered buying a two bedroom unit. They were priced at about $450,00. We could stay there about a month a year and the unit would be rented out in a hotel-like rental pool when we weren't using the unit. All of the two bedroom suites had identical furnishings. I went to Orlando for one night to try out the new Disney Vacation Club. Old Key West had just opened and it was spectacular. The right to stay for the same period want $45,000--exactly one tenth what a unit at the Longboat Key Club would cost. Yes, one was an investment and one wasn't. But the two things that dissuaded me from buying at Longboat Key Club was the amount of capital that would be tied up and the thought that I might like another property better in a few years. So we bought Disney Vacation Club and have never looked back. It wasn't on the beach and didn't have an "owner's closet" but it was the right thing to do.

Interestingly we now live in Celebration--which I highly recommend--and dream of buying a place on Longboat Key. Good luck with our decision and feel free to PM me if you have any Celebration questions.
John

 

[bwvBound]

A "press release" (advertisement made to look newsworthy) on PRWeb today reminded me of this thread from last year.

Timeshares Gaining Popularity Among Former Vacation Home Owners: Former Vacation Home Owners, and 'would-be' vacation home buyers are finding timeshare ownership an attractive, affordable alternative to the expense and headaches of owning a vacation home. // Link to story: (here).

I wonder how many buyers also consider moving in the other direction: from timeshare towards more exclusive properties, destination clubs or vacation home ownership?

 

[Kickapoo Joie Juice]

There's a book that I just finished called "House Lust" that I highly recommend; it had a chapter in there about time shares becoming more popular now that the housing market is tanking. The author favored time shares over second vacation homes, and talked about how the super-rich are switching from second homes to ultra-luxury time shares. Really interesting stuff!

Hey John, do they let you park your Owner's Locker van at Celebration???

 

[Caskbill]

This thread is originally well over a year old. We respectfully request users do not resurrect old threads. Often posters do not check dates, and will think this is a new question and will respond, never seeing the 'bump' thread which brought this back.

If you really wish to discuss something in an old thread, feel free to start a new thread on the same topic.

Since the information requested in March 2007 has been answered, this thread will be closed.

Thanks