How do you figure your cost per point?

[carlbarry]

I think it's important to know what my cost per point is so I know how much my stays cost, and also to know how much to charge to rent out points.
This is how I figure it: I add together my purchase price cost plus the cost of maintenance fees since purchase. I feel that's my actual cost.
I then deduct the money I've made from renting out points.
I divide that figure by the number of years I've owned. That gives me a cost per year, but still not all the information I need.
So then I divide that cost per year by the number of points I own, giving me my cost per point.
Is that the way DVCers generally figure it?
Thanks.
(A humorous, I hope, aside: An elderly couple I knew would go to Aruba every year with their Wyndham ownership. One year when they came back home the wife said to me, "We were in Aruba for 2 weeks and it cost us $75." I was a bit surprised by that low figure and asked how they figured that. "Well, we pay $150 a month maintenance fees, so 2 weeks is $75." I asked, "But how about the other 50 weeks when you're not in Aruba?" The answer: "I see what you mean, but that's not the way we figure it." So I'm trying to get a bit more accurate assessment for my DVC!)

 

[Tatebeck]

I would use:
Total cost of contract: -> ((Upfront cost of contract) - (Money made back after cost of dues from renting, magical beginnings, etc.))
Divided by number of points per year on the contract to get $ per point cost
Divided by number of years of points I will receive for that contract to get $ per point per year for that contract
Then add dues for that year to get total actual cost for each point for the year. (later years will cost more because of higher dues

You can go even further using time value of money, but that math gets much more complicated

 

[Sandisw]

I don’t! Lol.

 

[tx911]

I don’t! Lol.

You're speaking my language!

 

[VGCgroupie]

I think the way you are doing it doesnt account for everything and combines too many things, but thats just me. I use spreadsheets. The one that shows me cost per point I have not subtracted rentals or anything. I have two, one for my overall cost to own w/ per year, per point and total cost breakdowns. Then I have a second one to track how much monetary value I have gotten so I know when I will break even, thats where I would add rental income if any.

 

[CarolynFH]

Basically, I don't figure cost per point most of the time. If I do, I just look at the dues for that year, because our initial buy-in was so long ago that I consider it a sunk cost; the only money coming out of our current income is dues.

The last time I did any calculations was when we booked 2 P/G view 2BR at BWV for a big family trip the week before Christmas in 2020. For that I did calculate capital cost as $62.50 pp (what we paid) divided by 45 years (maximum length of ownership if we hold until 2042 as planned), which comes out to $1.39 pp per year. Dues in 2020 were $7.365 pp, so that plus capital cost = $8.755 pp in 2020. Six nights in each 2BR that week cost 297 points, a total of $2600.24, or $433.37 per night for each villa. Unfortunately I never could find out what the cash price would have been, but I'm pretty sure we were way ahead!

 

[carlbarry]

I would use:
Total cost of contract: -> ((Upfront cost of contract) - (Money made back after cost of dues from renting, magical beginnings, etc.))
Divided by number of points to get $ per point
Divided by number of years of points I will receive for that contract to get $ per point per year for that contract
Then add dues for that year to get total actual cost for each point for the year. (later years will cost more because of higher dues

You can go even further using time value of money, but that math gets much more complicated

By "Divided by number of points" do you mean points per year, points received since purchasing the contract, or total points to be received during the length of the contract?
My accountant friend who I've been annoying about this mentioned time value of money, but that just made my head spin.

 

[carlbarry]

I think the way you are doing it doesnt account for everything and combines too many things, but thats just me. I use spreadsheets. The one that shows me cost per point I have not subtracted rentals or anything. I have two, one for my overall cost to own w/ per year, per point and total cost breakdowns. Then I have a second one to track how much monetary value I have gotten so I know when I will break even, thats where I would add rental income if any.

If I put in how much monetary value I've received (I assume that means what I would have paid in rack rate) I think Disney would be owing me money. I mean, $550 a night? I'm not paying anything near that.

 

[carlbarry]

Basically, I don't figure cost per point most of the time. If I do, I just look at the dues for that year, because our initial buy-in was so long ago that I consider it a sunk cost; the only money coming out of our current income is dues.

The last time I did any calculations was when we booked 2 P/G view 2BR at BWV for a big family trip the week before Christmas in 2020. For that I did calculate capital cost as $62.50 pp (what we paid) divided by 45 years (maximum length of ownership if we hold until 2042 as planned), which comes out to $1.39 pp per year. Dues in 2020 were $7.365 pp, so that plus capital cost = $8.755 pp in 2020. Six nights in each 2BR that week cost 297 points, a total of $2600.24, or $433.37 per night for each villa. Unfortunately I never could find out what the cash price would have been, but I'm pretty sure we were way ahead!

So what you're saying, in my case, I bought OKW in 2009 for $65 pp, and will therefore own for about 43 years. So that would come to about $1.50 per year. MF is now about $10, so using your system my cost pp would be about $11.50.
That seems reasonable, But my problem with that is that it doesn't take into consideration the money I've made renting out. Specifically, when I bought for $65 pp, I got a loaded contract and immediately rented out points effectively lowering my cost to $55 pp.

 

[Memorymakerfor4]

I keep a spreadsheet of trip costs and keep costs per point in a separate column from dues because those vary every year. Per point costs were calculated by dividing total purchase price by how many years were on each contract at time of purchase, then again by how many points are on the contract. I do have to pay attention to how many points were used for reservations from each contract. I haven't ever rented points, but if I did I'd add that total to whatever the dues cost per point that year to get a base range.

 

[Mouseforward]

Use ChatGTP , just ask the following prompt , then it will ask you for data and paste in the table below ( fill it out with your contract and resort detail )

"Calculate the break even point for a Disney Vacation Club contract assuming dues go up X% a year and Hotel room rates go up Y% a year."

[ put your own percent in , I use x=3.5 y =4% but that is just a WAG on my part ]

This is the data you can fill out and paste in.

Resort

Use Year

Contract End Year

Purchase Price (Total)

$

Points Purchased

Annual Dues per Point

$

Total Annual Dues

Average Points Needed per Night

Hotel Cost per Night (cash)

$

Years You Plan to Use

Rental Value per Point

$20 (used for opportunity cost)

 

[CarolynFH]

So what you're saying, in my case, I bought OKW in 2009 for $65 pp, and will therefore own for about 43 years. So that would come to about $1.50 per year. MF is now about $10, so using your system my cost pp would be about $11.50.
That seems reasonable, But my problem with that is that it doesn't take into consideration the money I've made renting out. Specifically, when I bought for $65 pp, I got a loaded contract and immediately rented out points effectively lowering my cost to $55 pp.

Well, we’ve rented maybe twice in 25+ years, so no, I don’t think about that. I just want a figure to compare to cash rates - how much money from our travel budget am I saving on accommodations by owning DVC?

If we had rented out points at the start of our ownership so that I considered a lower amount as what our contracts cost, then maybe I’d use that figure as our sunk cost. Doing more calculations than that would be too close to feeling like calculating profit and loss for me.

 

[Tatebeck]

By "Divided by number of points" do you mean points per year, points received since purchasing the contract, or total points to be received during the length of the contract?
My accountant friend who I've been annoying about this mentioned time value of money, but that just made my head spin.

So what you're saying, in my case, I bought OKW in 2009 for $65 pp, and will therefore own for about 43 years. So that would come to about $1.50 per year. MF is now about $10, so using your system my cost pp would be about $11.50.
That seems reasonable, But my problem with that is that it doesn't take into consideration the money I've made renting out. Specifically, when I bought for $65 pp, I got a loaded contract and immediately rented out points effectively lowering my cost to $55 pp.

The points you get each year, like you did in the other quoted example.
If you subtract the total rental profit (amount you have rented for above dues costs) from your purchase price, before dividing by 43 years then it will give you your total cost per point, then adding dues will give your total cost per point this year after dues not accounting for the time value of money

You bought so long ago that it won't make much difference though as the dues are your primary cost driver now.

 

[davidhr]

Whichever method makes the numbers look good and enable my purchase

I keep it simple and use the one mentioned by Tatebeck

I never use the present/future value of money because if I wanted to get there then I wouldn't be buying a timeshare.

 

[Mouseforward]

I never use the present/future value of money

Agree, I never found that that applies to indulgences, just investments and we all know DVC is not an investment.

Just like you don't tabulate the calories between a steak and chicken when your having a celebratory meal. It's not the goal.

 

[Joroc0801]

Do you love Disney enough to know you want to continuously visit for the next few decades? Do you feel comfortable spending 50k+ over the course of the contract to feed that love for Disney. Everything else is lost in the margins. The enjoyment and memories from your trips will outweigh the meticulous financial decisions you made up front.

 

[carlbarry]

The points you get each year, like you did in the other quoted example.
If you subtract the total rental profit (amount you have rented for above dues costs) from your purchase price, before dividing by 43 years then it will give you your total cost per point, then adding dues will give your total cost per point this year after dues not accounting for the time value of money

You bought so long ago that it won't make much difference though as the dues are your primary cost driver now.

Thanks. Except I made a mistake. I bought OKW in 2009, and the contract is up in 2042 (if they don't extend it. But I'll be 89, sooooo . . . ). Using your method, and 33 year membership, I come up with $13, which seems rational.

 

[carlbarry]

Use ChatGTP , just ask the following prompt , then it will ask you for data and paste in the table below ( fill it out with your contract and resort detail )

"Calculate the break even point for a Disney Vacation Club contract assuming dues go up X% a year and Hotel room rates go up Y% a year."

[ put your own percent in , I use x=3.5 y =4% but that is just a WAG on my part ]

This is the data you can fill out and paste in.

Resort

Use Year

Contract End Year

Purchase Price (Total)

$

Points Purchased

Annual Dues per Point

$

Total Annual Dues

Average Points Needed per Night

Hotel Cost per Night (cash)

$

Years You Plan to Use

Rental Value per Point

$20 (used for opportunity cost)

First time user of ChatGTP. I don't see that rental value per point. But then again, it's a guess as to % increase on hotel rentals, and cost per night of same.

 

[VGCgroupie]

First time user of ChatGTP. I don't see that rental value per point. But then again, it's a guess as to % increase on hotel rentals, and cost per night of same.

I would just use a generic $20 per point value thats what Disney charges for one time use points and pays for MB, its also a good average for the rental market when using a broker

 

[Mouseforward]

First time user of ChatGTP. I don't see that rental value per point. But then again, it's a guess as to % increase on hotel rentals, and cost per night of same.

I get the cost per night by taking a day in mid May, which is midseason of Disney. The only exception is Riviera where I think the rack rate is ridiculous so I use around 700 instead. I think you have to make the call. I would never spend 900 a night on a studio at Riviera when I can get the same room at beach club for 700 so that’s why I use 700. So for me, that’s a more realistic break even point.