But that's not really the cost of the points nor the value. You can chose how to run the math for your choices but there is an inherent cost and value regardless of how anyone choses to look at it. You've got to account for the up front costs more than simply taking the buy in and dividing by the RTU (IMO) and the inherent value is what you could get out of them if you used them in other ways such as renting or used for DVC directly. Even using the worst method to value points it's still generally more than one gets when using points for a cruise, as you correctly judged going in.
I figure my cost per point as my buy in cost per point (less profits from rentals), amortized over the life of the contract (OKW original) and then add the year's MF. Am I deluding myself?
I can't say because I'm not sure which direction you're leaning, I'm guessing we're pretty close in principle from your posts. You can decide how I'd judge your circumstance and how close we are by the following principles. IMO one must include the time value of money or opportunity costs, any interest and other expenses, how long to judge return of principle, and the dues risk. For me that looks like a 4.5% rate of return on resale after taxes (about 7% on retail because I allot all of the difference between resale and retail to long term opportunities), a 10 yr ROP (I think 15-20 yrs is the max time to allow depending on RTU), and around a 3.5% increase on dues AND cash reservations. One's personal situation is also a major issue, if not the biggest one but everyone's so variable that we normally limit ourselves to the somewhat more objective info plus a few core principles, for me being able to afford it means paying cash and having no consumer debt. Unless one bought specifically to rent routinely, I wouldn't consider rental income into the equation of the inherent cost of DVC. If I were buying strictly as a rental, I would want a 20% return for what I consider a risky option from an investment standpoint. Ultimately I prefer the current rental value at the time in question though, that's in the $13-16 a point before income taxes on "profit". For a cruise there are 2 major components that often differentiate the discussion from other situations. One is we're generally talking significant numbers of points and the other is that DVC is an easily liquid option for renting and this makes DVC somewhat unique in the timeshare world. But at the end of the day one must look at all of those parameters and make a decision for themselves. Of course when one bought and therefore the buy in price affects long term costs, when I discuss this issue I'm generally thinking more of a recent purchase, that's why I feel the current rental value is likely a far better benchmark since it is pretty constant.
I was just giving an example where it made sense *for us* to use points to cruise. Not everyone wants to deal with renting points out to get the cash to pay for a trip, and sometimes one simply wants a cruise vacation instead of a parks vacation.
Sure, that's why I worded it for others benefit. Sometimes in this situation people try to rationalize that things inherently included in a cruise are part of the $$$ value of using points for a cruise and they are not. However, they are part of the cost of a trip and thus the budget. Splitting hairs to a degree but it's an important aspect when deciding where to use points for a cruise. My goal is for people have the information. If ones decides they'd rather have the convenience AND risk associated with using points for a cruise than say the extra $1000 they'd get if they rented and paid cash, that's their decision but this is basically the decision they are making. For me personally I see the risk of the cruise reserved far out on points as FAR greater than any risk of renting points. And I don't see renting as that much of a hassle. Personally I'd make more by working a day or 2 here and there but I've met some very nice people renting both DVC and Marriott.
