How do you make DVC make financial sense?

[4luv2cdisney]

In your situation it won't save money but it might be a reasonable upgrade for around the same money. You'd roughly break even for SSR resale compared to your usual trips. You'd be paying cash. If you can plan 7 months or more out and mostly at AKV/SSR and are OK with the long term commitment and compromises of a timeshare, it could be a reasonable option if you only buy the points you'd use at WDW though a 20% buffer would be a good idea. Unless you're going premier (Xmas/Easter) you'd need around 75 points to do EOY, 100 or so if you'd do the higher time. Maybe an extra amount still to 100 or 125 if you wanted to try to get the higher level resorts part of the time. For this situation a 25 pt retail add on would likely not be worth it.

Are you figuring point requirements for studio? 7 nights?

It just seems like for a studio, every other year, if you travel at the same time every year (she's going in January, so let's assume January) you'd want more like 50 points max. Point requirements for 7 nights in Jan (except NY) for SSR, AKV, and OKW are 83, 81, and 76 respectively.

So, 50 is giving you 100 and it's hard to manage "extras" on an eoy schedule. Honestly, I'd only want 40 and then borrow or buy OTU points if you happen to need / want / snag a resort requiring 100ish pts or if you are short a point or 3.

Of course finding a 40 resale is tough and you can't get only 40 direct....

If you're figuring 1bed, it's about double the points. So, I'd think 75 is almost sufficient - but you'd definitely be borrowing and buying OTU. 100 seems like way too much for SSR, AKV and OKW.

 

[Dean]

Are you figuring point requirements for studio? 7 nights?

It just seems like for a studio, every other year, if you travel at the same time every year (she's going in January, so let's assume January) you'd want more like 50 points max. Point requirements for 7 nights in Jan (except NY) for SSR, AKV, and OKW are 83, 81, and 76 respectively.

So, 50 is giving you 100 and it's hard to manage "extras" on an eoy schedule. Honestly, I'd only want 40 and then borrow or buy OTU points if you happen to need / want / snag a resort requiring 100ish pts or if you are short a point or 3.

Of course finding a 40 resale is tough and you can't get only 40 direct....

If you're figuring 1bed, it's about double the points. So, I'd think 75 is almost sufficient - but you'd definitely be borrowing and buying OTU. 100 seems like way too much for SSR, AKV and OKW.

I'm assuming a studio as the main thought but with additional factors.

• The possibility/probability of not getting standard view
• The chance of reallocation
• The likelihood they won't always be able to or choose to get a studio
• That they may travel other times
• That they'll likely try other more expensive resorts.
• Closing costs are around the same either way.
• Smaller contracts are more per point.
• The less borrowing/banking the better.
• One can always do a single rental every few years if needed.
• If one can't afford 75 or even 100, they can afford 50.
• That having a few points adds flexibility and reduces stress.

For 50, I'd probably just go retail and get the additional benefits, chose the UY and secure the minor savings on dues and closing. I wouldn't go for less than 75 in this situation.

 

[jlwhitney]

I will say one thing that we have found we love about DVC and that has made it more sense for us is we don't have to chase discounts. We look at the point chart for when we want to go and decide to book or not and move one. No waiting around for a certain discount to make the resort we want more affordable. We still do get a discount basically since we are past the break even point now.

 

[Cyberc1978]

However, I see reports showing that hotels outside of Disney are going to be offering 60 day fastpass+ reservations, for $76 a night

There are ways to do that without paying the $76. You basically just need to make a changeable cash reservation.

 

[Ben E N]

There are ways to do that without paying the $76. You basically just need to make a changeable cash reservation.

What that comment was meant as is there are currently hotels on Disney property, but not part of Disney, called "good neighbor hotels". Some of these are as cheap as $76 per night. It is rumored that starting later this year, they will be getting 60 day FP+ reservations, just as good as on-site guests. Whether or not this happens, it drives home the point that you should sign up for DVC if you are interested in what it gets you at a bare bones level - comfortable accommodations in a great location, as long as you like Disney Parks. Other perks like Magical Express, 60 day fastpass, and AP discounts are not a given and should not be the reason you make your purchase.

 

[Wakey]

I could only make it financially viable on the following basis. First as a family we insist on a 1 bed. And we like deluxe. So I was off to a good 'justification' start.
Next I go in summer and worked out in a 1 bed I can get anywhere at 7 months, so no need to buy a VGF or Poly. I could buy the 'best value' SSR and still stop everywhere.
Then I picked up a fully loaded 160 pointer for $12k all in. I have plenty of cash in the bank so wouldn't ever considering borrowing to fund. Borrowing to fund would be an instant deal breaker.
Then I rented out last year's banked points on that contract for $2k meaning my 160 pointer cost $10k.
Since then in 10 months I've seen that contract rise $20 a point in value. 2018 I'm spending 10 nights in a 1 bed, which on cash prices would probably cost at least $5k. I have $900 in dues to pay this next year though.
So undoubtedly this is a good deal financially. I could sell the contract after my vacation and essentially it cost me nothing.
But $175 a point with finance? I would never have proceeded.

 

[Cyberc1978]

What that comment was meant as is there are currently hotels on Disney property, but not part of Disney, called "good neighbor hotels". Some of these are as cheap as $76 per night. It is rumored that starting later this year, they will be getting 60 day FP+ reservations, just as good as on-site guests. Whether or not this happens, it drives home the point that you should sign up for DVC if you are interested in what it gets you at a bare bones level - comfortable accommodations in a great location, as long as you like Disney Parks. Other perks like Magical Express, 60 day fastpass, and AP discounts are not a given and should not be the reason you make your purchase.

What I meant was that you could already get the 60 days without staying onsite and without ending up with paying anything.

If you have a reservation for e.g Hilton December 1st - 8th. Then you book whatever Disney Resort which was availability for the same dates. Then at the 60 days mark you make your FP+ reservations. As Disney allows you to cancel you do so within the 30 days.

 

[Wakey]

What that comment was meant as is there are currently hotels on Disney property, but not part of Disney, called "good neighbor hotels". Some of these are as cheap as $76 per night. It is rumored that starting later this year, they will be getting 60 day FP+ reservations, just as good as on-site guests. Whether or not this happens, it drives home the point that you should sign up for DVC if you are interested in what it gets you at a bare bones level - comfortable accommodations in a great location, as long as you like Disney Parks. Other perks like Magical Express, 60 day fastpass, and AP discounts are not a given and should not be the reason you make your purchase.

I agree - I think it's always good advice to only consider the bare bones as you say when deciding if DVC is worth it for you. Basically Disney Deluxe standard villas on Disney property. Everything else is window dressing as it can be taken away any time, or given to others for a fraction of an on resort stay cost as you correctly point out.

 

[pmaurer74]

It depends upon how you use your DVC. DVC has allowed us to take our family with us. I took 22 people last year over two trips. I could not have done that without DVC. I love mine. I want another one.

 

[10CJ]

Dues still cost real money, so another option is to buy more than you need and rent out 40% of your points annually, which should net about enough to pay for dues on all the points.

Do you know if there are any sites/links to go into more detail on this? Any calculations online as an example?

 

[Dean]

Do you know if there are any sites/links to go into more detail on this? Any calculations online as an example?

I'm not aware of any but the method for determining ROI on a depreciating asset is pretty standard. When I look at this I assume return of principle over 10 years plus the actual return. When you do this it will vary a lot with the resort and buy in, esp based on resale vs retail. However, for some situations like this one, there may be other benefits. These may include the ability to buy now for what one needs in a few years, to get a better price or better contract, to have more than one home resort for the 11 month advantage or to have more than one master contract which can add other advantages for some. My feel is that the return isn't sufficient to justify buying just to rent out so one needs other reasons to own, but if renting allows one to be in a better overall ownership situation, it can be worthwhile.

 

[skippytx]

Do you know if there are any sites/links to go into more detail on this? Any calculations online as an example?

I'm not aware of anything specific. My attitude towards renting points is the option is there if we can't make it one year so we don't lose out on the value of that years points. It would vary depending on resort/dues and if you wanted to include the acquisition cost of the point. Buying a large contract with the intention of renting excess points to cover your costs is not a great idea in my book. That doesn't mean it might not work out most years, but still there are better ways to invest money.

For instance (and I'll be rounding), we have 160 BLT points (right now ha!), and the dues this year were 900 dollars. I would need to rent about 65 points (assuming I go through davids and get 14/pt for them) to pay the 900 worth of dues. Now if I take it one step farther and count the 3 bucks a point original acquisition cost of one years points, I would need to net about 1400 dollars renting, or about 100 of my 160 points.

You can adjust the numbers for your resort, point totals, and how much you can rent your points for. BLT could rent privately for 17-19 a point if I put effort into it which adjusts the numbers quite a bit.

There have been some interesting discussions before talking about DVC as an investment as well, I think with current pricing that ship has sailed though. The fortunate folks that purchased when resale contracts were much lower have seen a decent return. Not sure how it compares to the return of the stock market though.

 

[Crusader10hky]

I have only just cleared ROFR on my first contract so I'm not sure I'm qualified to answer. However, having just struggled with the same questions you're asking I hope my terrible analogies help.

My moment of clarity came when I decided that I wasn't going to save money and that I realized that was ok. It's like you buy a fundraiser discount card from the local high school football team. You go out for a steak dinner and you use the buy on get on coupon on the card. You spent money to get the card (and in this case Disney is the charity lol), and maybe wouldn't have splurged for steak otherwise. So you're spending more that you would normally, but hey, you're eating steak now instead of a burger and at less-than steak prices. Also, I look at it as the Tail That Wags the Dog. It is going to make me take better vacations with my family, so I see it more as an investment in quality family time.

Also, I bought at BLT. There are a million Beach-Front Timeshares in the world, but how many Timeshares overlook Magic Kingdom? I feel like there will always be SOME demand for it, either by rental or if I needed to sell.

 

[jodifla]

We did not buy to save money. We bought to greatly upscale our accommodations for a reasonable price. We first toured Vero Beach 22 years ago, and when we walked into the 2 bedrooms at Vero Beach, I knew my DH went from "never buy a timeshare" to "Hmm...I'm very interested." We then toured OKW and BWV models the next week before buying OKW, then added on BCV about 18 months later.

Since we're from Florida, we were driving up and staying at friends' houses near Orlando, or at Best Western on 192. Occasionally we would snag rooms at Disney on special.

In the few years it took to pay it off - our points were in the low 60s -- we focused on WDW vacations and just shifted the thousands we'd spend on other vacations around the country to paying off the DVC loan, and spending our vacation time there.

I tried last month to get my DH to agree to a studio next year, and he said, "I want a VACATION. Being crammed in a studio is not a vacation." So back to our one bedrooms we go.

 

[kboo]

...
I tried last month to get my DH to agree to a studio next year, and he said, "I want a VACATION. Being crammed in a studio is not a vacation." So back to our one bedrooms we go.

Your DH sounds like mine! LOL.

We were already staying in deluxe hotels in recent years, *and* easily going once a year. We definitely would have saved money staying in studios instead of a deluxe hotel room, and I would have saved myself the headache of hoping to get a special 30-35% off code (which, by the way, are a great deal if they work out) and scrambling to get a room in the dates we wanted. Also we are pretty much constrained to traveling during school breaks, when there is never a decent rate. So it made sense for us.

Of course, DH got on board because you do save # on studios compared to deluxe hotel rooms, on the whole, so he suggested we only buy enough points for a studio annually. Of course I made sure we bought more just in case, and we now have enough points for a week long stay every year, in a studio and a half (we could alternate studio/1BR each year). I have a feeling that after we stay in a BLT studio (likely in 2018), he is going to want to be in a 1BR so we have a little space from our 2 young kids.

 

[deedubb]

We often stay off-site because we like lots of room, a full kitchen, extra bathrooms, and in-suite laundry. To stay in a similar villa at Disney is 5X the cost or more vs staying off-site. With DVC, it's about the same cost with the added bonus of being on-site with all the associated perks. So from that perspective, it made sense to buy DVC. We can also walk to MK from BLT which is a huge bonus.

If you can't go for a year or two, you can sell your points and make money. If you get tired of Disney in a few years, you can sell your contract as the resale market is very strong. It was really a no-brainer.

 

[crisi]

Something anyone considering DVC should be aware of. People are saying "its a Deluxe at the price of a Moderate" - it isn't. Its a timeshare, and there are some significant differences between a DVC room and DVC policies/process and a Deluxe room and CRO policies/process. Make sure you understand the difference.

Also, regarding the resale market - it can crash. It did in late 2008/2009 and when people who bought in 2007 or earlier in 2008 had to sell (and many who lost their jobs did have to sell) they lost thousands of dollars.

Recessions are cyclical and we are due for one.

 

[LSUmiss]

DVC is basically a luxury purchase. I agree that we have enjoyed being DVC members, but we are probably spending 2 to 3 times what we were before. But we are also enjoying Disney more.

Rather than focus on cost savings, I would make sure everything else is in good shape before considering DVC.
1) You can pay cash.
2) You are on track to have a fully funded retirement.
3) You are on track to pay for college for the kiddies.
4) You have paid down all consumer debt except possibly your mortgage.
5) If you were to lose your job or have a financial setback, you have an emergency fund.

If you can answer yes to all this, then DVC is something you should consider as an alternative to buying a boat, a house in the mountains, or other luxury purchases that may interest you.

If you come every year and stay at deluxes, then there is some cost savings. If you only come every other year, the cost savings diminishes because of the time value of money. If you like mods or values, then there may be no cost savings for you.

Even then I can’t see savings. We go about 4 Times a yr & always stay deluxe. But I always go with passholder or other discounts. I still don’t see where it would save me much if any when you factor dues back in.

 

[deerh]

Don't know if I am a math person or not.. BUT, we purchased in 1999/2000 at $68-70/point. Maybe a $21000 investment. We went 2
years ago to Aulani. We went in May, and a 2BR OF/view was for 1 week and the website (Aulani website) and it said $13000. Since then
you can see my signature in my profile, and we have been to Disney many times and 1 Disney cruise. I could now sell my BWV for $32000 now.
Now, I am no math person as I said, but been on many vacations and could sell now for a profit. So, I see it as a win-win.

DeerH

 

[Ben E N]

Don't know if I am a math person or not.. BUT, we purchased in 1999/2000 at $68-70/point. Maybe a $21000 investment. We went 2
years ago to Aulani. We went in May, and a 2BR OF/view was for 1 week and the website (Aulani website) and it said $13000. Since then
you can see my signature in my profile, and we have been to Disney many times and 1 Disney cruise. I could now sell my BWV for $32000 now.
Now, I am no math person as I said, but been on many vacations and could sell now for a profit. So, I see it as a win-win.

DeerH

Yes, things have worked well for you. Your results are not at all guaranteed though. You can sell for so high today because the economy is ticking along right now. I can sell my house for 140% of what I bought it for 6 years ago.
That does not mean it will continue to grow, or even that a collapse is not coming soon.
Somebody could easily but a contract for $32000 today, assume it is too to grow, only to have the market collapse and have it only be worth $18000. Compounding matters, the market is tied to jobs, so it is possible that same person ends up jobless, owing $1000+ per year in dues. Not a fun other side of the coin.
I have to admit that I also looked at the resale possibilities of DVC when I bought in, but it should not even be a top 5 reason to do it. You should only buy in if you are comfortable kissing that money goodbye forever.