Florida Vacation Home vs. ~$150k of DVC

[Nck]

Hi All,

My wife and I are of course Disney lovers, her family has had DVC for years, but only about as much for one or two vacations per year.

As we are planning our future lives, we were considering owning a vacation home somewhere in Central Florida. Not only do we love Disney, but we also have some family down there.

Now, when considering that a vacation home that we would like seems to be in the 400-500k range, I am wondering whether we might actually get more personal value from a mega amount of DVC points. (Of course I have the understanding that we won't be keeping the equity for life with a DVC contract instead of a vacation home, comparing apples to oranges in a way ) Seems like 150k could get us roughly 1,000 points in the resale market. I was wondering if anyone has ever considered doing something like this, roughly what the Dues expenses would be, and roughly how much vacation time we could get out of this. I was hoping to achieve something close to 2 months of vacation stay per year with this amount. We'd probably opt for 1 or 2 bedrooms, and are fine with staying in the lower point resorts like SS or OKW. Any thoughts?

 

[kanerf]

I have done this with over 1 million Wyndham points, around 15K HGVC, 300K RCI and around 630 DVC. I should be able to stay down in Florida 4-6 months out of the year depending on when and where.

 

[RoseGold]

This is where the math gets fun!!!! You need to head over to TUGS and do some math.

DVC might not be your (complete) solution, but there are plenty of just gorgeous Orlando properties you can buy into. Storage units near Orlando are dirt cheap, I totally think this is doable.

This math has some limitations, but I think it's a good starting point.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-fall-2021/
Also, points are fungible and money is made on the buy. I think there's an entire plan of buying loaded contracts, transferring points or using them and then selling them stripped in a year or two. This wouldn't work in other timeshare systems, but it would work in DVC.

Just some back of the envelope, July 2022 (mid point season) is 851 points for the month, 1BR SSR. Using the chart above that's $9,800/month!!! That assumes points are depreciating linearly, blah blah. The floor is at least dues, which are SSR $7.3. But, you could stay a week there and then stay somewhere else. Lots of options, and DVC can always be sold which is a big plus to me.

Factor in a contract with something like 200 points with no dues, and you can flip this math. I'd find this a fun retirement project if my family liked Orlando at all, haha. I'd also seriously consider setting up something like an LLC to hold all of this. If your estate is going to be probating significant assets in Florida, I think you need a serious plan for this, with local legal advice.

 

[MICKIMINI]

We're going down this road on a smaller scale! We've considered buying a second home or a condo and decided 1. We are worriers (hurricane, break in etc) and 2. So much $$ if we are only there 2-3 months a year. No second home for us, though if timing ever allows, we'll sell our home and buy in FL and the neighborhood is already chosen LOL!

We spent a few hours Sunday during the blizzard looking at more options for points. We've been DVC since 1996 so we "speak" Disney and though I look at other brands (mainly Hilton and Marriott), I just can't get past it is NOT DVC.

We have two UY's so we question keeping both (definite advantages) or selling one and consolidating with one or two more contracts to expand our OKWE direct or SSR. OKW is the favorite as we can park right at our door. We may add on to our HHI contract (it's on the way since we will be driving). Our VB is subsidized so it is a keeper and I'm always looking for another unicorn in the same UY of course.

If you can stand the heat, September is now incredibly cheap points for 1 or 2 BR villas. Our preferred time though, is late October as is our son and DIL's and we spend Halloween at WDW (10 days in a studio so another 150 points). If we stayed September and October that would be ideal, however we are also missing the best weather in NH...sigh. Ideally we're at 1500 points which is 1000+ points more than we have. Is that really smart in retirement even considering SSR at 11K/yr? Owning multiple contracts makes is much less risky IMO. Down market? Buy more! Too many contracts just flip one or two.

On the plus side, you are paying DVC to clean, landscape, insure and replace furniture and periodic renovation. None of those pesky maintenance issues are ever your problem! We signed up for Owners Locker, but DH is not sure it will hold what I want it too, ha, ha. RoseGold's storage unit point is well taken and a great idea!

I think it is a great option. It will take lots of planning and strategic buying (think loaded so you can roll points forward). Good luck with your decision!

 

[RoseGold]

An idea for this is AKL 1BR value. This room isn’t impossible to book off season, fantastic point value and AKL has a lot going for it for a long term stay — good parking, animals. This would require buying AKL points and booking well in advance. Again using July 2022 (mid range point season), 660 points a month, 8K/month using the chart above.

Of course I have the understanding that we won't be keeping the equity for life with a DVC contract instead of a vacation home, comparing apples to oranges in a way

It's not like any of your "equity for life" condos are going to better than just investing the money. Investing is better than purchasing DVC as well. The difference is, you are only locking up 150K and the rest of the cash stays invested. Maybe you break even on DVC or some other timeshare, but it was never a 500K discussion.

The really, really cool thing about DVC is that you can hold for a couple years and just unload it if you change your mind or it doesn't work for you or you want to buy into some other system. I don't view buying resale DVC, heck even 1,000 DVC resale points, as much commitment at all. A 500K condo commitment very much is.

 

[DaveNan]

My wife have been having the same conversation. We already have near 1000 points and are starting to think does adding some more make sense. I have looked are retirement parks and condos in the Tampa area (did a one week trip last month and met with a realtor). When looking at the finances of a second property, a major factor is, are you going to try and rent it when you are not there or not. We just aren't comfortable have someone else in "our property" when we are hours away. Next you need to look at the annual carrying costs. Between HOA, lawn care, taxes, utilities, insurance, and maintenance it kept coming to $6000-$8000 per year based on the specific property. That's roughly the the MF on 1000 points or 3-4 months rental. When looking at units and condos, if you aren't going to be in the units for 4-6 months per year, you are actually better off renting someone else's place (or even AIRBNB). We are just more comfortable in the upper end timeshares (DVC, Marriott...) than rentals. We are still a couple of years off, but we are thinking that having enough points for 4-8 weeks per year makes more sense for us, versus buying a dedicated place that is going to sit empty for 10-11 months. If we were either willing to rent out the second place or are planning on being there 4+ months, I think the math would change for us.

 

[RoseGold]

1. We are worriers (hurricane, break in etc)

This is a big one in favor, even DVC over other timeshare companies. If there's a hurricane coming, you can even cancel and reschedule something. It's one of the reasons I would book a really long DVC stay in big chunks, well, and I like split stays. Covid was a pretty extreme example, and even then people were generally able to use their points or come up with a solution that worked. DVC point flexibility is very different than other systems. In those systems, most people just lost out.

For your needs, I might think about Airbnb longer term rentals. I did a lot of Airbnbs during lockdown, and I think that plus a storage unit could go a long way in central florida, especially offpeak. It's at least a short term plan while you figure out what you want long term. You might like staying in that condo and then switching over to Disney and get to do both without locking down into a condo.

 

[awatt]

One thought re vacation home. Do the math regarding potential rental income when you are not there. Of course you can rent DVC points as well if you go that route. I have 3 condos in Fl and they pay for themselves year round. If you had a vacay home it is possible it wouldn't cost you anything.

 

[Brian Noble]

If I wanted to be in Central Florida for ~2 months/year, I would not buy either a vacation home or a big pile of DVC points. Instead, I would plan to rent something on a month-to-month basis for the months I wanted to be there.

I've known a few people who owned vacation homes in vacation destinations and tried to rent them out most of the year. All of them sold, and none of them recommend it to others---their experience was that it was more work and less (financially) rewarding than they'd expected vs. some other investment mechanism. Based on their experiences, I won't be looking to buy something as a vacation home unless I'm spending closer to half the year in it.

Two months in DVC feels like overkill to me. I probably don't want to be in the theme parks every day (or even most days) of those two months. I definitely am not staying in a studio for two months, so a 1BR is the minimum. Eight weeks a year even in the least expensive seasons (September then January) at Saratoga in a Standard 1BR is an ongoing cost of almost $10K/year. I bet I can rent a very nice pool home within easy striking distance of WDW for $5k/month. That still has someone else dealing with landscaping, maintenance, upkeep, etc. and for me it is set-and-forget.

 

[Leight19]

Not sure if this point has been mentioned yet but one thing for dvc now vs owning in Floridia is DVC currently can’t get annual pass but Florida residences can. There will always be this looming concern I have with dvc that one day Disney will decide we are captive audience who will pay for multiple ticket packages if they eliminate AP (in some ways they already have). While this could be the case with Florida residences as well Disney still offers them cheap ways into the park as they treat the supply and demand curve and optimization of price point separately between in state and out state (e.g they recognize out of staters are willing to pay more then in staters).

 

[Sandisw]

Not sure if this point has been mentioned yet but one thing for dvc now vs owning in Floridia is DVC currently can’t get annual pass but Florida residences can. There will always be this looming concern I have with dvc that one day Disney will decide we are captive audience who will pay for multiple ticket packages if they eliminate AP (in some ways they already have). While this could be the case with Florida residences as well Disney still offers them cheap ways into the park as they treat the supply and demand curve and optimization of price point separately between in state and out state (e.g they recognize out of staters are willing to pay more then in staters).

Just to clarify for others that only one FL AP is still available. It is the one limited to weekdays only.

But, I do agree that having something that qualifies you to get any FL tickets would be a big plus.

 

[The Jackal]

Not sure if this point has been mentioned yet but one thing for dvc now vs owning in Floridia is DVC currently can’t get annual pass but Florida residences can. There will always be this looming concern I have with dvc that one day Disney will decide we are captive audience who will pay for multiple ticket packages if they eliminate AP (in some ways they already have). While this could be the case with Florida residences as well Disney still offers them cheap ways into the park as they treat the supply and demand curve and optimization of price point separately between in state and out state (e.g they recognize out of staters are willing to pay more then in staters).

The AP Florida residents can buy has the most block out dates. They cannot buy the good AP’s.

 

[zavandor]

I'm not sure maybe saving $400 on an AP is going to tip the scale much on the decision of buying a $400k home.

 

[princesscinderella]

Not sure if this point has been mentioned yet but one thing for dvc now vs owning in Floridia is DVC currently can’t get annual pass but Florida residences can. There will always be this looming concern I have with dvc that one day Disney will decide we are captive audience who will pay for multiple ticket packages if they eliminate AP (in some ways they already have). While this could be the case with Florida residences as well Disney still offers them cheap ways into the park as they treat the supply and demand curve and optimization of price point separately between in state and out state (e.g they recognize out of staters are willing to pay more then in staters).

Florida residents only have the worst option for annual pass available to buy right now too so it’s not any better to argue that point.

 

[princesscinderella]

The nice thing about DVC is you also have some flexibility to stay elsewhere too besides WDW. I have no idea how good interval international exchange is, but with planning you could also stay at Aulani, Disneyland, Hilton head and Vero.

 

[ITGirl50]

We planned to do this years ago. We have always gone through these phases where we want to buy a vacation home and then change our minds. We will be picky and $500k doesn’t buy anything special anymore. Then there is all the up keep, taxes, HOA, utilities etc on top of that. I also don’t want to just sit in a house somewhere else. We need something fun to do. So we keep going back to just owning enough DVC points to enjoy multiple trips to WDW and Aulani every year. We are up to 1120 now, but this is after 14 years of buying points. We are hoping to retire in a year or two (in our 50s). We want to finish buying points before we stop working.

 

[disneyforsix]

In addition to staying at Disney, we plan to rent points out and use the funds for other vacations, trips, experiences. We also just didn't want to deal with the upkeep and responsibility of another property, not to mention is was so much cheaper on the initial outlay. I realize that each resort has an expiration date, but we will have more than made up the cost of the buy-in + MFs with stays and rentals in the first 8+- years, not to mention the rapid increase of the price per point going on now. But ultimately, we just wanted a reason to have to take a vacation, and we love being on Disney property. This also allowed up to split up our contracts among our 4 kids without someone having to buy another one out, or selling the property outright. That being said - everyone should do what works best for them and their family.

 

[Leight19]

Florida residents only have the worst option for annual pass available to buy right now too so it’s not any better to argue that point.

I guess “worst” is relative. I often do week long trips Sunday to Saturday during off peak times. I would gladly pay for the cheaper pixie pass as I rarely go into parks on weekends as they are travel days and often busier. As a local this may be different but I definitely would do pixie pass as dvc owner if given the option.

 

[happythoughts & pixiedust]

I’ve run the numbers and come to this conclusion: If you don’t rent it out, the cost of owning a mid range condo in Orlando or elsewhere in FL ( not on the beach) is roughly equivalent to the cost to stay in a DVC 1 bedroom for 2 months. If you buy a long dated contract that can pass on to beneficiaries with ~20 years left, there is a good chance the equity in the contract will have appreciated similarly to the condo.

However, as has already been stated, renting a house or condo nearby Disney for two months would be even cheaper (probably by close to half the cost) as you are not paying the Disney proximity premium.

If you don’t rent out the house/condo that you own when you’re away, it only starts to make sense to buy if you’ll stay there at least 4 months or longer - and longer still if you’re financing the purchase.

 

[Leight19]

I'm not sure maybe saving $400 on an AP is going to tip the scale much on the decision of buying a $400k home.

Not sure if this was directed to my comment on buying annual pass but my statement is more related to buying it at all vs not having discount. $400 discount won’t make a difference but if they can’t buy any annual pass staying 2 months at Disney in a year would be prohibitively expensive for vast majority of people if only option is series of 10 day tickets