I am officially CONFUSED!!

[BongoBoy]

Okay, based on what I have read here so far, you all love the DVC. I am ready to make the commitment, too. But, I haven't quite figured out the economics yet.

Evidently it is going to cost me around $15,000 to join, 200 points x $75 per point. What do I get in return?? A week at the Boardwalk, or some equivalent calue, for 30 years?? Is there any annual maintenance fee??

The way I figure it, using a 10% cost of debt, you are spending $1,500 per year, plus whatever the annual maintenance is. That comes out to around $210 per night.

Am I on the right track?? Is this about right??

Thanks for your help, I am very interested in joining if the value is there.....

Also, are Wilderness Cabins available through the DVC??? If so, how many points?? <IMG SRC="/infopop/emoticons/icon_confused.gif" alt="confused">

Dave

 

[PamOKW]

Yes, you pay yearly dues (maintenance, capital and real estate taxes) per point based on your home resort. For 2001 the dues are:
OKW = $3.13
HH = $3.32
WLV = $3.63
BWV = $3.83
Vero = $3.97

Dues have not fluctuated much in the recent past. They even go down some years. By FL law, the increase can never be more than 15% in one year.

The current program expires in January 2042 so you have more than 30 years of use.

Depending on time of year, size of unit, weekday/weekend, you can get more than 1 week for 200 points (or less for 2 bedrooms and up). You could easily get 14 nights in a studio.

If you look through these boards the financial calculations come up time and time again. It's not an investment to make money but it is a very good way to assure yourself of deluxe accomodations at relatively stable prices.

Next up with answers.....

 

[DVCDAVE]

Yes the Wilderness cabins are available, I used one in March with points. March being 'Magic' Season is a high cost month, 34 points for a weekday. However, keep in mind that you get far more 'bang' for the point staying in a DVC resort than you do going outside the DVC resorts. For instance, a Wilderness cabin sleeps six and has a kitchen. A 2BR at WLV or BWV during magic season is 40 points, sleeps 8, has 2 baths plus a juccuzzi, 3 TVs, 1 VCR, and a kitchen, and far more square footage than a cabin.

WDW:
76,77,78,87,FW
92,Offsite
95 POL
96(2), GF,Offsite
97,GF
98,99,00,FW
8/00 DVC member @ BWV
3/01 BWV, FW
3/01 DVC member @ WLV
11/01 BWV !

 

[JeffreyH]

I've looked at the finances of this a lot lately, and posted my thoughts a few times (can "search" for posts with me as the author to find some threads discussing this). Here's the short version...(OK, probably not).

200 points in June will be $15,000. You can only buy in WDW at WLV (resale elsewhere). You mention 10% cost of debt. That of course will vary by individual, Disney's best 10 year rate is 10.95% with 20% down, but is tax deductible if you don't own another "second home" already. So cost could be closer to 8%. But lets use your 10%.

I've posted before why I think resale value, even 20 years from now, will be over $75. So I think it is fair to ignore deprecitaion in value if you assume you will resell within 25 years or so. Otherwise, you need to consider that you'll have "nothing" left in 2042. But if you do this, you are paying interest on a declining balance.

Next is the maintenance fee. At WVL, it will be about $726.

So...$1,500 in interest + $726 maintenance fees = $2,226 per year.

What do you get? As PamOKW mentioned, about 14 nights in a studio ("regular" hotel room size). That comes out to $159/night. The equivalent of a hotel room at about $144 + 11% tax. Considering that Disney rents its "deluxe" rooms (which the DVC ones are equivalent to) out for about $300/night, that's a pretty good rate. And you will be paying close to that $159 even 10-20 years from now. Would you be surprised if Disney was charging $400 then? $500? Wasn't so long ago the "deluxe" hotels went for $150.

Can get a 2 bedroom (1,000-1,300 square feet) "home" for 5 weeknights. $445/night using your assumptions. Pricey yes, but a lot less than Disney charges on a "cash" basis.

Don't want to go to a DVC resort a certain year? Bank your points for the next year. Or "rent" them to someone on the active rent/trade board here. Rent at $10/point right now (and how much will they rent for when Disney is charging $450 for a room?). The $2,000/year you could currently rent your points for would cover the interest on $15K @ 8% and the maintenance fees.

If you think you'll visit WDW every other year or so and are willing to spend $150/night for a room, this may be a good idea for you.

 

[valeriekc]

The rate for a one bedroom villa at Boardwalk in 1998 during the regular season was 325.00 per night. the rate for that room today during the same season is 415.00 per night
that increase is only over 3 years so you can imagine what can happen in 10-20 yrs.
If you plan to go to WDW frequently for the next 10-20yrs you can see how DVC can be a great way to hold down your costs if you want to stay on the property in a premium resort.
We have saved a record of the room rates since we became members in 1998.
Just some food for thought

 

[BongoBoy]

Your responses were great, it is all much clearer to me now. JeffreyH, you must be a CPA, if not I give you your honorary certificate!! You are speaking my language!!

I do now see the advantages of club membership. Primarily, it is the hedge against inflation that makes this attractive. Also, the ability to rent points, bank them, even borrow them are very good features.

To me, it initially seemed like you are paying rather high prices in the current market, but when I consider the type of accomodations you are describing, I see that I was wrong about that.

But, perhaps most importantly, aside from all the dollars, all the numbers, is the qualitative aspect of all this: You "own" a piece of the magic!! Your kids (or you) know that they have years of Disney fun in store for them, something fantastic to look forward too, something to motivate them through the school year, through the cold days of winter, etc. This, I believe, is the best part of the whole thing....

Okay, I am convinced, do ya think I'll be able to sell my wife on the concept??





Dave

 

[caverill]

If your wife is anything like my wife, you won't have a problem.

Once I stated that we would be taking yearly vacations together and have the option of staying around the world, it was an easy sell.

Since joining we have been to WDW once, have reservations to stay at the Grand Hotel on Mackinac Island in June (this was always one of my wife's dreams), and will be back at WDW next Feb.

It is sure fun always planning for your next vacation!

Clark Averill

DxL 95
DL 97
Off-Site 98-Courtyard/DD
DxL 00
Joined DVC - Sept 00
BWV - Feb 01
BWV - Feb 02

 

[Beachangel]

so i figured that it this way: $15,000 investment for the next 40 years + <$1000 annual dues. No problem. In the past 6 years I've spent that on vacations. Thru DVC I get great vacations for the cost of my annual dues. Can't beat it as long as you like to vacation!

"Think left and think right and think low and think high. Oh, the THINKS you can think up, if only you try." Dr. Seuss

 

[larry_poppins]

I find that there are many intangibles involved with DVC so that it is almost impossible to figure out the financial value of DVC!

In addition to all the $$ analysis, here are some points to consider.

DVC is fun. Using cash is not as much fun!
MS is an 800 number. 407-WDISNEY is a toll number and we all know you can be placed on hold alot.

Once you paid off your DVC purchase, reserving rooms is a game. I never think about the cost of the points anymore. However, if I were to reserve any of the WDW Hotels I would instantly be aware of inflation, because I go to WDW every year. I would know what I paid last year, 5 years, etc... And believe me those hotel prices have gone up ALOT!

If I were paying cash I would never pay for a one bedroom. I would probably be staying at moderates or economy All Stars. I personally don't like the economy hotels, but as I said before if I am paying cash I would be concerned about sawing cash. With points I just have fun and use them.
Once you stay in a 1 bedroom or higher you are spoiled for life, a hotel room will never look the same. And some of those deluxe hotel rooms are very pricey and small (AKL or WL)

I am all set until 2042. God knows what I will do then if I am in good health and want to go to WDW.
Probably buy a resale of DVC II.

Then there are the intangibles of being a member of the Club. Owning the Magic. etc....
Explaining the Club to people who have never heard of it.

Of all the purchases I have ever made, none have given me this much joy.

Sincerely,

Larry

 

[kpatches]

I think it is great to be able to go away and not worry about where we are going to stay and how much we will spend. If we heard some of the room rates they now get we might skip a vacation because of the cost. It is so nice to just go and stay in luxury and not worry about the room rates. We joined in 93' and have gone at least twice a year (okw, vb, hh, dcl). It's been wonderful!!!!!!!!!!! I don't think we would be taking 2 or 3 vacations a year at today's prices.

 

[travelbug]

Well said, Larry! You made some really good points.

I'm a fanatic traveler. So for me, DVC is a wonderful way to have 42 years of accommodations paid for up front. DVC is a good inflation-buster. By the time I'm a senior citizen and watching my spend ing, it will be wonderful to know that I can count on a vacation every year. I also LOVE the flexibility of locations, size of units, time of year, etc.

I haven't even been on my first DVC trip yet (leaving in 3 days though), but I have not had one single doubt about becoming a DVC owner. I just know that it is right for me.