How do you make DVC make financial sense?

[Deb & Bill]

These are all great and thoughtful responses, thank you.

We're still going to the presentation with an open mind, so I guess anything is possible!

Enjoy the presentation, accept what they give you for going on the tour, tell them "thank you" and leave. Don't buy at that time. Get the pixie dust out of your eyes and look at this as a financial impact on your life, not future magical moments. Buy resale and save a ton of money. Besides they will push either Aulani (you miss out on booking at eleven months out if you plan on using those points solely for WDW and seldom for Hawaii), the Polynesian (a studio will get smaller as your children get larger but the studio will sleep five - a bungalow will require a ton of points), or Copper Creek (a family of five can't stay in a studio or one bedroom unless one is under the age of three and then when they hit three you are looking at two bedroom villas). Research DVC before you go on the tour and educate yourself. You might find out renting points once in a while will suffice.

Remember, too, that unless you book a two bedroom villa at a minimum, someone is going to be sleeping in a convertible bed.

 

[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.

Ben EN,

True. In 25 years my BWV will be worth very little. Unless DVC decides to do something before that time. But my wife and I have decided that DVC works
for us. I wouldn't say kissing the money goodbye forever, UNLESS I decide to keep it 25 years. I would agree then, but WHO know what DVC
will do in 25 years? Even if a collapse is going to happen (it did from 2007-2011 recession), my DVC did not go down in price.

DeerH

 

[Bing Showei]

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

I think it's important that potential buyers of DVC get away from the notion that DVC is a good investment. It's not. It's a good vacation timeshare. You'll create great memories with family and friends. You'll have experiences that will leave a lasting impression on your kids around the joys of a family vacation in world-class theme parks. You'll be generous with your "points" (read money) in ways you would unlikely be with your cash. You'll enjoy Disney more often than you would without DVC. Your kids will reflect fondly around rope dropping the new Avatar/Slinky/Millennium Falcon ride with 10,000 fellow crazies. All great memories. All great life experiences.

But none of it reflective of a good financial investment.

In the financial sense, @deerh 's example is a perfect example of how DVC is a good $21,000 timeshare, not that it is a good $21,000 investment. One can make the argument that DVC is a great timeshare, but one can never substantiate DVC to be a great, or even good, investment.

For example, it's important to take into account that $21,000 in 1999 dollars is not equal to $21,000 in 2017 dollars. Based on the inflation rate between 1999 and 2017, $21,000 is the equivalent of about $31,000 today. The sale of that contract does not represent an $11,000 profit yield, closer to a $1,000 yield, or the equivalent of growing from $21,000 to $21,650 in 1999 dollars, assuming the purchase wasn't financed.

If this was a cash purchase, there would be the lost opportunity cost of that money invested in another vehicle as well. There are the dues paid annually, and the lost opportunity cost of those dues. And then there is the extra money spent on extra vacations a DVC member will take that deviates from their vacationing norm, pre-DVC.

When looking at savings via DVC, one can't compare hotel rack rates with DVC. The closest thing for comparison over savings would be renting points to stay in a DVC resort. (Here's a great thread on this: https://www.disboards.com/threads/how-do-dvc-rooms-compare-to-hotel-rooms.3643054/)

Personally, I will never make the argument that DVC isn't worth it. I can still remember queuing up to ride Pirates of the Caribbean as a kid at Disneyland; the smell of the water, the sound of the turnstiles, the candlelight glows from the restaurant lighting, and the starry sky INDOORS (mind:blown); I'm excited to share that kind magic and excitement with my son next year with Toy Story Land, and the years after that with Galaxy's Edge, Ratatouille, Tron, etc, etc. Therein lies the value of DVC.

Will you save money on all the trips you end up taking? Maybe.

Will you spend a lot more than you would without DVC? Absolutely.

DVC is great timeshare. But it's not a good financial investment.

 

[deerh]

I think it's important that potential buyers of DVC get away from the notion that DVC is a good investment. It's not. It's a good vacation timeshare. You'll create great memories with family and friends. You'll have experiences that will leave a lasting impression on your kids around the joys of a family vacation in world-class theme parks. You'll be generous with your "points" (read money) in ways you would unlikely be with your cash. You'll enjoy Disney more often than you would without DVC. Your kids will reflect fondly around rope dropping the new Avatar/Slinky/Millennium Falcon ride with 10,000 fellow crazies. All great memories. All great life experiences.

But none of it reflective of a good financial investment.

In the financial sense, @deerh 's example is a perfect example of how DVC is a good $21,000 timeshare, not that it is a good $21,000 investment. One can make the argument that DVC is a great timeshare, but one can never substantiate DVC to be a great, or even good, investment.

For example, it's important to take into account that $21,000 in 1999 dollars is not equal to $21,000 in 2017 dollars. Based on the inflation rate between 1999 and 2017, $21,000 is the equivalent of about $31,000 today. The sale of that contract does not represent an $11,000 profit yield, closer to a $1,000 yield, or the equivalent of growing from $21,000 to $21,650 in 1999 dollars, assuming the purchase wasn't financed.

If this was a cash purchase, there would be the lost opportunity cost of that money invested in another vehicle as well. There are the dues paid annually, and the lost opportunity cost of those dues. And then there is the extra money spent on extra vacations a DVC member will take that deviates from their vacationing norm, pre-DVC.

When looking at savings via DVC, one can't compare hotel rack rates with DVC. The closest thing for comparison over savings would be renting points to stay in a DVC resort. (Here's a great thread on this: https://www.disboards.com/threads/how-do-dvc-rooms-compare-to-hotel-rooms.3643054/)

Personally, I will never make the argument that DVC isn't worth it. I can still remember queuing up to ride Pirates of the Caribbean as a kid at Disneyland; the smell of the water, the sound of the turnstiles, the candlelight glows from the restaurant lighting, and the starry sky INDOORS (mind:blown); I'm excited to share that kind magic and excitement with my son next year with Toy Story Land, and the years after that with Galaxy's Edge, Ratatouille, Tron, etc, etc. Therein lies the value of DVC.

Will you save money on all the trips you end up taking? Maybe.

Will you spend a lot more than you would without DVC? Absolutely.

DVC is great timeshare. But it's not a good financial investment.

Bing S,

So true. I never said it was a investment, and I agree with what you said above. As far as DVC goes, it is a great timeshare. However, using your example
for renting points- If i rented the week in Aulani for 483 points ( 69 points/week for OV 2BR) at $17/point that is $8211!! So, you add up the 19 times
we have been to HHI/BWV/SS/WL and the 1 cruise, it still would be more than what I paid for the initial DVC timeshare.

So.. let's fast forward 10 years from now.. CCV is $705 for a 1BR in May (disney.com).. Let's say 4% increase in hotel rates per year. In 2027 it will be
$987/night. So for 1 week it would be $6909. I am not sure if that rate is with taxes. I also believe that the CCV rates on disney.com is a
discounted rate... So those are NOT rack rates..

Say you go to CCV every year in May and stay in 1 BR... For 1 week... And you do that for 10 years... That would be an advantage EVEN over
discounted rates..

One other thing.. You can also claim 20% or so on your taxes for DVC (real estate taxes). This must be figured into your financial assessment of
DVC as well.

So... Bottom line...
Is DVC a good investment? NO
Is DVC a good timeshare to beat hotel rates and inflation? YES
Is DVC better than discounts? YES
Is DVC better than renting points every year?YES.. because the avg person can't afford $5000-6000 every year for accommodations..
Is DVC one of the better timeshares? YES.. And I would think Marriott would be good if you don't care for Disney that much.

Just my .02 cents worth

DeerH

 

[Bing Showei]

Bing S,

So true. I never said it was a investment, and I agree with what you said above. As far as DVC goes, it is a great timeshare. However, using your example
for renting points- If i rented the week in Aulani for 483 points ( 69 points/week for OV 2BR) at $17/point that is $8211!! So, you add up the 19 times
we have been to HHI/BWV/SS/WL and the 1 cruise, it still would be more than what I paid for the initial DVC timeshare.

So.. let's fast forward 10 years from now.. CCV is $705 for a 1BR in May (disney.com).. Let's say 4% increase in hotel rates per year. In 2027 it will be
$987/night. So for 1 week it would be $6909. I am not sure if that rate is with taxes. I also believe that the CCV rates on disney.com is a
discounted rate... So those are NOT rack rates..

Say you go to CCV every year in May and stay in 1 BR... For 1 week... And you do that for 10 years... That would be an advantage EVEN over
discounted rates..

One other thing.. You can also claim 20% or so on your taxes for DVC (real estate taxes). This must be figured into your financial assessment of
DVC as well.

So... Bottom line...
Is DVC a good investment? NO
Is DVC a good timeshare to beat hotel rates and inflation? YES
Is DVC better than discounts? YES
Is DVC better than renting points every year?YES.. because the avg person can't afford $5000-6000 every year for accommodations..
Is DVC one of the better timeshares? YES.. And I would think Marriott would be good if you don't care for Disney that much.

Just my .02 cents worth

DeerH

My point is that a lot of people end up traveling to Disney much more because they are DVC members. Some buy annual passes they may not normally because they can get discounts to do so as members (which in turn means more trips to Disney in a year).

If one is traveling to Disney resorts a lot more than one would normally without DVC, it doesn't matter how much the cost difference is between a hotel room and a DVC room. You're not saving money.

By buying into DVC, financially, the house wins. My travel habits are forever changed until I sell my contracts.

I think it's important for potential buyers to understand this.

 

[Ben E N]

Ben EN,

True. In 25 years my BWV will be worth very little. Unless DVC decides to do something before that time. But my wife and I have decided that DVC works
for us. I wouldn't say kissing the money goodbye forever, UNLESS I decide to keep it 25 years. I would agree then, but WHO know what DVC
will do in 25 years? Even if a collapse is going to happen (it did from 2007-2011 recession), my DVC did not go down in price.

DeerH

It sounds like you have made DVC work quite well for you, and that you are now in what I consider to be the 'bonus years', where no matter what you decide, it's a bonus. You have clearly gotten your money's worth out of what looks like some amazing trips. That's the exact shape I wan to be in in 18 years myself. If something did happen to the resale value of DVC, I do not think you would end up feeling cheated, as you already got your great trips out of it.

My message was meant as a word of warning to others who might think that your results are repeatable by anybody. Unless you are planning on taking at least 15 trips, like DeerH has, and you want the accommodations, both for better and worse, that DVC provides, DVC will probably not make sense for you. Don't think you can buy in, take a few trips over 10 years, and then automatically sell for a 20% profit.

Is DVC a good investment? NO
Is DVC a good timeshare to beat hotel rates and inflation? YES
Is DVC better than discounts? YES
Is DVC better than renting points every year?YES.. because the avg person can't afford $5000-6000 every year for accommodations..
Is DVC one of the better timeshares? YES.. And I would think Marriott would be good if you don't care for Disney that much.

I think we are on the same page here, considering this comment from you. DVC is awesome if you know what you are getting into, and do not either set your sights too high or have unreasonable expectations of what it can do for you financially.

 

[ZebraDomeCrazy]

Have fun...we are waiting to see what we think of no daily mousekeeping and factor that into our decision of buying DVC in the future or not.

At first I thought I would hate not having daily housekeeping. Now we love it! I would always have to straighten up, or put things away every morning. Now it feels more relaxed, like at home. We keep our rooms clean and tidy ourselves. Also, we usually rope drop parks and go back to the resort to swim in the afternoon. We would play the “have they cleaned our room yet” game, and that was always a pain if housekeeping was in the room, or in our hallway. Sometimes DH likes to take a nap in the afternoon, and if housekeeping hadn’t been there already, he was forced to nap at the pool, lol. My point is, I was honestly surprised that I prefer NOT having daily housekeeping.

 

[deerh]

It sounds like you have made DVC work quite well for you, and that you are now in what I consider to be the 'bonus years', where no matter what you decide, it's a bonus. You have clearly gotten your money's worth out of what looks like some amazing trips. That's the exact shape I wan to be in in 18 years myself. If something did happen to the resale value of DVC, I do not think you would end up feeling cheated, as you already got your great trips out of it.

My message was meant as a word of warning to others who might think that your results are repeatable by anybody. Unless you are planning on taking at least 15 trips, like DeerH has, and you want the accommodations, both for better and worse, that DVC provides, DVC will probably not make sense for you. Don't think you can buy in, take a few trips over 10 years, and then automatically sell for a 20% profit.



I think we are on the same page here, considering this comment from you. DVC is awesome if you know what you are getting into, and do not either set your sights too high or have unreasonable expectations of what it can do for you financially.

Ben EN,

Yep! DVC works for us! We LOVE Disney and the brand, and the parks/resorts/cruises/etc. IF you get tired of Disney, and the parks, then DVC
would NOT be for you. But as you said Ben EN, it has worked for us, and we have enjoyed it.

As far as figuring out a vacation, and the cost, I myself do not include food as a addition cost. You have to eat if you are in Italy, or Bahamas,
or in Florida at a resort. I count accommodations and additional costs- Park tickets, etc. So, the "official cost" of DVC is the accommodations
(0) and Park tickets ($550)/person if a AP.. So... Our 1 week at WDW cost $1100 for tickets and food. Now I am sure other "finance gurus"
may figure it different than I do.. YMMV...

DeerH

 

[crisi]

Ben EN,

True. In 25 years my BWV will be worth very little. Unless DVC decides to do something before that time. But my wife and I have decided that DVC works
for us. I wouldn't say kissing the money goodbye forever, UNLESS I decide to keep it 25 years. I would agree then, but WHO know what DVC
will do in 25 years? Even if a collapse is going to happen (it did from 2007-2011 recession), my DVC did not go down in price.

DeerH

It could be worth much less next month - that tends to be how market crashes work. The other thing about economic troubles is that they usually come with a spike in unemployment. That sometimes means selling your assets, and selling assets at a loss when you are in a really tight spot financially isn't great.

That's why its important not to consider resale value in any calculations - and take any gain as gravy. And not to advise others that the gain is to be counted on - because their financial situation and employment situation might be far more precarious than yours.

 

[deerh]

It could be worth much less next month - that tends to be how market crashes work. The other thing about economic troubles is that they usually come with a spike in unemployment. That sometimes means selling your assets, and selling assets at a loss when you are in a really tight spot financially isn't great.

That's why its important not to consider resale value in any calculations - and take any gain as gravy. And not to advise others that the gain is to be counted on - because their financial situation and employment situation might be far more precarious than yours.

Doubt that will happen with DVC. The reason I say that is, my DVC did not drop dramatically during the recession years ago. Also, my DVC is paid for,
and even if resale prices drop $20/point-(Right now BWV resale is $119/point) I will still be ahead of the game. I never said that DVC financial gain
is counted on-don't know where you got that from my post...?

DeerH

 

[crisi]

Doubt that will happen with DVC. The reason I say that is, my DVC did not drop dramatically during the recession years ago. Also, my DVC is paid for,
and even if resale prices drop $20/point-(Right now BWV resale is $119/point) I will still be ahead of the game. I never said that DVC financial gain
is counted on-don't know where you got that from my post...?

DeerH

It did happen in 2008, and I'm not taking about yours. You are giving advice to someone else. Consider how you'd feel if someone stretched their budget to buy at $100 a point, and next month it was worth $70 and they had to sell to pay their mortgage.

 

[Disneybuckeye]

It makes me happy. That in itself is priceless.

Just returned from a great 10 day trip to BWV. All three of our adult kids were there for part of it and they all thanked me for it. Worth every penny and then some.

We paid cash and i expect to hold it until BWV ends in 2042. I don't even try to make it a financially smart decision.

 

[Crusader10hky]

DW comes home wearing a new outfit with a huge smile and says "Isn't it GREAT? I saved 50%!!!!". I'm of course thinking 'you could have saved 100% if you didn't buy the outfit at all'. However, she's smiling, she didn't put us in a poor financial position by buying the outfit, and although she could recoup a large amount of the money by selling it on eBay after wearing it a couple times, we are not dependent on it.

"You look beautiful honey!"

 

[Ben E N]

DW comes home wearing a new outfit with a huge smile and says "Isn't it GREAT? I saved 50%!!!!". I'm of course thinking 'you could have saved 100% if you didn't buy the outfit at all'. However, she's smiling, she didn't put us in a poor financial position by buying the outfit, and although she could recoup a large amount of the money by selling it on eBay after wearing it a couple times, we are not dependent on it.

"You look beautiful honey!"

This definitely works when comparing vacation vs. no vacation. However, the OP compared DVC to staying in Value and Moderate resorts from time to time. That is a harder comparison where you really have to decide if you think the improved location and (mostly) improved accommodations are worth the extra upfront, and possibly longtime, cost, as well as committing to Disney for better or worse for 25+ years.
Might be more like your wife coming home with a Lexus instead of a Toyota. Both have good resale value and are great cars, but one certainly costs more. Is it worth more? Depends on who you talk to.

 

[Cyberc1978]

DW comes home wearing a new outfit with a huge smile and says "Isn't it GREAT? I saved 50%!!!!". I'm of course thinking 'you could have saved 100% if you didn't buy the outfit at all'. However, she's smiling, she didn't put us in a poor financial position by buying the outfit, and although she could recoup a large amount of the money by selling it on eBay after wearing it a couple times, we are not dependent on it.

"You look beautiful honey!"

That’s why i’m all-in for a separate couples economy.

Wife and I share all income and all expenses but keep our separate bank accounts. If she wishes to buy a dress she can do so without me having a say in that. Why - because it’s her money and not mine. I can do the same (after asking her)

 

[Micca]

We love DVC, been in about 10 years. Lots of things in life don't make financial sense. Few people need to spend over 50K on a car but lots of people do it. It has and will continue to enhance our WDW trips, just like the people who bought the more expensive car get a nicer ride. Horses for courses!

 

[Dean]

Here's the thing. DVC makes no sense to own if it doesn't save money and/or add additional value. To pay more to be a member of the club would be foolish. Certainly DVC tends to cost more no matter what if one splurges more, goes, more, etc but that would come under added value. Otherwise it's simply risk and expense. One can stay at DVC consistently if they want other ways.

 

[kniquy]

We are in a similar boat as you - travel every other year. We bought a small resale AKV 120 point contract for just a little over $9000 in 2015. With that contract this upcoming stay in April 2018 will be a split 2 Rooms -3 nights at Poly (direct would be over $2000 per room even with a 25% discount would be $1500 per room ($3000) then we move to a 2BR std at AKV - - direct would be ~$4800 (even 25% discount $3600) - so this trip would be anywhere from $6600 - $8800 depending on discounts. This will eat up a good portion of our initial buy in, with another couple trips we will have broken even. At that point yearly maintenance fees of ~$800 will be far less than what we would be paying for a room - so ultimately saving us on deluxe resorts.

What stands out in your situation is that you do value and sometimes moderate. DVC makes total sense if you always want deluxe rooms, it can sometimes make sense if you consistently do moderate rooms and definitely doesn't make sense if you always do value rooms.

Only you and your family can decide if you are happy with your rooms or if you are looking for more. Aside from the DVC tour - which will probably be pushing copper creek and maybe poly. Take a monorail tour to check out the monorail resorts, or when you are at Epcot take a walk over to beach club and boardwalk. Plan a meal at AKL (Boma is great) to see what that resort is like. There is definitely a different feel from a deluxe to a value, but you might figure out that you don't care much about the rooms because your main focus is the parks - in this case do not buy in now. Your wants and needs might change as the kids get older - you might want more relaxation and then the resort becomes more important.

Maybe for your next trip try a DVC rental - davids is a reputable company.

The one great thing with DVC is that as a timeshare it holds its value pretty well, so even if you bought in and then in 10 years realized it wasn't for you - you could probably sell and get back a portion of your initial investment.

Definitely play out the numbers with a resale contract - it will save you a considerable amount of money compared to direct.

you are in the right place -- ask lots of questions. Do not buy in when you are there. Come home brush off the pixi dust and think through every option.

 

[kniquy]

I'm guessing if we ever do it that it'll be an emotional purchase.

It will be part emotional but this is where you need to put your financial cap on and take off your mickey ears to think through all the numbers - this is why it is best not to buy when you are there. You can discuss number but do not sign or get a verbal offer that you can mull over when you get home. It is tough to think of the big picture and all your other financial obligations when you are there. Come back to these boards and ask the endless questions that you will likely have after you do the tour.

The best scenario is -- you pay cash (do not finance), you figure out if you can afford the increasing yearly maintenance fees in January when they come due ( you do have the option to spread out into monthly payments), you have a good understanding of when you can travel and what use year you need to buy for your travel needs, what happens if you can not travel, how will your use year work when your kids are older (not sure if you mentioned your kids ages or if there will be anymore in the future) and can only go during summer or school break, have a good idea of the number of points that you will really need.

 

[deerh]

Totally agree with what is said. Several things come into play when or IF you may purchase DVC.. 1. You need to like/love Disney if you purchase. Why?
B/C the best "bang for your buck" is the resorts at Disney/HHI/Aulani/Vero. 2. You need/should/must plan out far in advance. DVC is NOT for
a "spur of the moment" vacation. Yes, it can be done, but maybe not where you want to stay. 3. Must be cognizant of the dues going up and if
you finance your DVC, the monthly costs...

Agree with above, that DVC holds it value, and you probably will be able to break even and make a profit on DVC if you should sell 10-12-15 years from
now. You could also rent out points and pay for dues, etc. I have never had a problem renting out to friends. They are always asking me if I want
to rent my points out.

Good luck!

DeerH