I thought DVC was for us, but...

[ss0414]

My circumstances are different from the OP's, but I thought I'd chime in. Recently divorced, back in college and beginning a whole new phase of my life. Sadly, lost my oldest daughter, Sara, to an illness in 2006. Decided that I don't know where I'll be in 5 years, but do know that I will take my kids on vacation for the rest of my life. I have a rental in a neighorhood that I can't afford to buy into (if I stay in this area) until I finish my degree and secure a nice paying job. I've mapped my life out for the next 5 years and although I don't own my house, my kids are well taken care of, my income is secure for that period and my 20 year old's college is covered (as well as mine). I decided on a small DVC resale, put some cash down and will pay it off in 5 years. Life is short and I want to enjoy the time I have with my kids (the best way I know to honor Sara's memory, focus on the remaining children to the fullest). It may be a luxury, but I've weighed it, and it's what's important to me now.
Besides, everytime we go to DW, I like the fact that my ex knows that the very nice alimony check I receive every month is going towards our vacations.....

 

[ldo]

Ruby, I am sorry for your loss, and I would probably do the same--esp. a small resale contract.

BUT--for others who do not own a home, I would not buy DVC---UNLESS you are ABSOLUTELY committed to going to Disney, no matter what your finanancial situation. In that case, it could be a way to get higher quality lodging for a better price. Otherwise, I would wait. WHy?
1st, the $ spent on DVC (whether cash or monthly payments) could be cash for a downpayment--monthly payments can go into savings for a home. 2nd, if financed, it counts towads your debt load.

The basics in buying a home are LOWER DEBT, INCREASE AVAILABLE CASH. A lower debt ratio also can get you a better loan rate. Take the "worst case"--

1--you don't buy DVC unitl after you buy a home and DVC prices go up a bit while you rent points from other DVCers on this BB or you stay in hotels OR

2--you buy DVC and then you don't have enough $ for a downpayment, or you can't qualify b/c of your debt load.

Don't get me wrong, I LOVE Disney as much as the next person, but I bet that there is NO financial planner on earth who would tell you to buy DVC before a house. Everyone must decide what's best for their family--but that would be the general rule of thumb.

 

[Kurby]

Is it foolish to buy DVC without first owning a home?

I never thought it mattered, but now it is making me really doubtful because I keep second-guessing our decision when I think back to what the guide said about non-homeowners buying dvc.
:

personally - nope.

we're one of "those" people too.

for us it was a pretty easy decision - we live in Canada and go to WDW every other year and now that we have a child and planning another we'll be going more often and on the cruises too.

buying points was as easy as deciding how many points we could comfortably live with without going too low or too high. how often would we go down, what kind of room would we want, how long would we stay and we based this on what we've done in the past 10-14 days studio good view.

210 points was what we came up with. an amount we could pay off in a few years less then the 10 year plan

as for the home - we are still paying into our down payment fund and will prob be ready to seriously look in about 5 or 6 years. that said we'll have been down to DVC at least 3 times and will only have a year or so left on the DVC loan - so once our DVC is paid off that money will just flip into your mortgage payments.

you can only do what you are comfortable with - do the math, crunch the numbers and if it's right you'll love it - if not - you can always look at it again in a couple of years.

 

[crisi]

You cannot compair the two, a $16-420k purchase to a $150-$?????? purchase. If you can afford it, do it. Home ownership is not in everybody's plans. Without renters there would be no landlords!! and I would be unemployed!!!! lol

You can, and you need to. Every dollar you spend is a dollar you don't have to spend somewhere else. Every dollar. The dollar I'll put in the vending machine this afternoon to buy a Hershey bar is a dollar I don't have to buy a new car. A dollar spent buying a new car is a dollar I don't have for the Hershey bar.

Perhaps more importantly, every dollar I don't spend at all can work for me and make more dollars. Every dollar I spend that I don't have I have to pay extra for. Thus the rich get richer and the poor get poorer.

 

[Tinkerdreams]

All the money in the world cannot replace a memory.

I do not subscribe to being in debt, however, if you are financially able to do this and have enough money to live on and some for savings, then do it. Life is too short. The memories you make with spouses, children, family and friends are PRICELESS!!!

 

[Anthony1971]

Easy MOM
Although I do agree with you 100%.....
Not an answer to your post just the advice made me

I think what is missing here is that DVC is a luxury hotel and everyone compares the cost to a deluxe. One need not stay on property much less at a Deluxe to enjoy Disney. I think pepole need to set a budget and stick to it IF your goal is to have a house than vacation like you are saving to buy a house. If you plan on living your current lifestyle than blow the savings account on your vacations.
Truly being able to afford something means this is your top goal and all goals that were higher on your list have been achieved.

 

[dunbarfamily]

It sounds like you have thought it out really well, so don't let one person's comment ruin what you were planning on doing. Think about it this way...if you had a different guide who did not make that comment, most likely you'd have bought. Don't let his comment get to you.

*gulp* We do not own a home right now. We just sold ours last year due to a closure of the plant my husband managed. We moved to an area we do not like and we plan to move the first chance we get. Because single family dwellings in this area sit on the market for about 2 years, buying here does not make sense for us.

We do have the money for a new home, but not here. So we had no problems with buying a timeshare without owning a home. When we get to an area we want to stay in, we will buy a home.

Everyone's situation is different. Not to get too mushy, but you know in your hearts whether DVC is right for you.

Good luck with whatever you decide!

 

[Mr Man]

One of the responses that still stands out all these years later was one individuals' opinion that you shouldn't even consider owning DVC if you didn't make at least $250,000 a year

Stay rationale and keep emotion out of the purchase as much as possible and I'm sure things will work out.

250k a year seems a high threshold for considering a TS. AFAIK, average median household income in the US for 2006 was just under 50k. Effectively, just 1.5% of the population has an annual household income of at least 250k.

Also, 250k goes further (or less far) depending on where you live too. I would relish making 250k and living in upper East Kackilacky (dude, yer trailer is huuuuge)....... making 250k and living in Upper West Side Manhattan.......not as much.

Company I work for has moved me around the world quite a bit over the years. You should have SEEN the bump in pay/housing etc I got for living in Sweden! Big, big difference from Houston.

Just a thought.

 

[allaboutmm]

We do not own a house, and just bought into DVC. Here is our scoop.....My parents own a few house (as a investment), we live in one-yes we pay rent every month. We moved in before children-14 years ago. Over the years, and 3 children later, house prices have gone through the roof on the North Shore of Ma. My DH makes good $, but I am a preschool teacher-so my $ might cover food for the week and gas for both cars. Without a HUGE down payment of $40-$50 thousand dollars, your morage is going to be out of control- and that would be for a 3 bedroom, simple house. So my DH and I decided that our last few trips (always during value season- value/moderate hotels, 5 nights) had been to WDW and that the cost to stay kept going up, up, up. And for a family of 5, with growing kids it was getting harder to find a place to stay. We looked into resale (through Disney was not an option for us) we wanted enough points for everyother year, low fees, and longest deed. In September we bought 100 points, at SSR. For us this was the right time to buy. Just do what is best for YOU! Good luck!

 

[crisi]

All the money in the world cannot replace a memory.

I do not subscribe to being in debt, however, if you are financially able to do this and have enough money to live on and some for savings, then do it. Life is too short. The memories you make with spouses, children, family and friends are PRICELESS!!!

But that isn't the point, the point is about balance. You need to balance what you can afford. Life isn't worth living if you don't create memories, but its hard to live if you are scrambling when the transmission goes out. And anyone who needs DVC in order to create memories for their family, I have nothing but pity for. We have great memories at Disney, but we have great memories of time at the Lake, Christmas mornings, visiting cousins, and of playing board games and baking cookies.

This memories thing is the biggest cop out for people to spend money they don't have. If you have it, memories created at Disney are great memories. But the value is not based on the dollar spent and anyone who can't afford those memories shouldn't be made to feel like their memories are less valuable.

 

[robinb]

allaboutmm:
I think your case is a bit different. you will pay rent to your family until the house is willed to you and I'm sure that your parents keep the rent low. The OP doesn't have the luxury of having a family landlord.

Actually, I think you are making my point for me. How expensive were houses 14 years ago? You could have bought one and almost had it paid off by now. Instead you have nothing.

 

[Mr Man]

But that isn't the point, the point is about balance. You need to balance what you can afford. Life isn't worth living if you don't create memories, but its hard to live if you are scrambling when the transmission goes out. And anyone who needs DVC in order to create memories for their family, I have nothing but pity for. We have great memories at Disney, but we have great memories of time at the Lake, Christmas mornings, visiting cousins, and of playing board games and baking cookies.

This memories thing is the biggest cop out for people to spend money they don't have. If you have it, memories created at Disney are great memories. But the value is not based on the dollar spent and anyone who can't afford those memories shouldn't be made to feel like their memories are less valuable.

Balance is important. The question is, which balance is the right one.....and for who? It is likely different for all of us on here, with Disney being the only thing we have in common.

For instance. Prior to buying into DVC, we put most of our discretionary income (after bills/investments/college funds etc) into a boat, ATV's & a lake house (ok.....shack actually )...... then DBIL had a terrible accident in a boat (his own)......expired from his injuries.....DW doesn't like boats anymore. Boat is now sold, Lake Shack is sold (kept the ATV's though vroom!). $ goes into DVC. Our universe is in balance. We may reach the day where noone wants to go to DVC (perish the thought). When that day comes, we will sell and move on certain in the knowledge that we have wrung every bit of fun we could out of DVC.

But this is our story. Yours will be different, and I cannot judge whether DVC is right or wrong for anyone. I can wish them luck and suggest they research every angle before buying anything. This thread is a good start.

JMO, I think the cautionary words from long-term posters on here about us Noobs (& potential Noobs) come when there is talk about financing (5-10yrs) for DVC. This reaaaaally stretches out the break-even point (if there is such a thing ).

I understand and can appreciate their point (grasshopper and the ant after all ), but also like to "zero balance borrow" and such shenanigans to reduce interest paid as much as possible while still keeping $ available for other "opportunities". I don't see this discussed much here but have to say it works well for me and mine. Paying for 10 years on anything besides a house is a loser in my books. Now, 1-3 years......not bad at all.

 

[pouncingpluto]

In this real estate market, I just don't think not wanting to buy a home is surprising. We actually did own a home at the time we bought DVC, but we sold it to move for just a three-year stint, and we chose not to buy, having to bank on being able to sell again in a very depressed economy (in Michigan even more than elsewhere in the country).

Anyway, like others have said, there are many reasons for not wanting to buy, including not wanting to deal with maintenance, not being sure this is the bottom of the bubble burst, wanting to be very mobile, etc.

 

[JenSop]

I'd like to chime in again to say I agree with the PP.

Perhaps things were a bit different awhile ago when some of the older DVC members bought their houses. The market is very different now. Why would I want to pay a $1900 a month mortgage, when I can live in a nice house for $775? Maybe things will change down the road, but I don't want to wait to buy into DVC when I'm a grandparent and the points cost $300 each. I'm only 31 and will eventually be building on to my parents' house, like I explained in my previous post. But even if that weren't the case, I still wouldn't have waited until I could buy a house first. We were in a position to buy into DVC at 160 points and that's what we did. It's not like everyone is buying in with TONS of points. We can afford the 160 point level and the dues that go along with it. Some people are coming off as very judgmental when they talk about how they really can't understand buying into DVC without owning a home first.

And whoever thinks you need to have an income of over $250,000 to own DVC is on crack! So middle class people aren't allowed to take nice vacations? Sounds like rich elitism to me.

Sorry to get so touchy, but many of these posts come off as very snobby and a tad condescending.

Okay, ranting over!

 

[allaboutmm]

allaboutmm:
I think your case is a bit different. you will pay rent to your family until the house is willed to you and I'm sure that your parents keep the rent low. The OP doesn't have the luxury of having a family landlord.

Actually, I think you are making my point for me. How expensive were houses 14 years ago? You could have bought one and almost had it paid off by now. Instead you have nothing.

Oh, I didn't know you knew the details so well. Lets see, ummm..no we pay the going rate for rent here on the N.S. for a 3 bedroom house, big yard, and garage $1600.00-$2000.00-water only. As for willed, sorry, not going to happen, don't need to get into those details with you-or do you already know them? Houses 14 yrs ago, yes, were alot of $$ to a young married couple, DH just out of the Army/Gulf War, with a wife just starting out teachering preschool. When answering this thread, I was just trying to show another side to the story. So you can take your nose comments and go back to your house.

 

[robinb]

So you can take your nose comments and go back to your house.

Thank you. I love my house. The more you try to make your point, the more you make mine. You made the choice to rent for 14 years and have nothing. I have a home with over $200,000 in equity in about the same time with a mortgage which is less than your rent. Oh, I also have two DVC contracts too!

 

[DisneyBride'03]

OP just asked for opinions.......everyone has one...some have volunteered to share..and have been very forthcoming in what works or worked for them purchasing DVC.
Let's keep it on topic....

 

[allaboutmm]

Thank you. I love my house. The more you try to make your point, the more you make mine. You made the choice to rent for 14 years and have nothing. I have a home with over $200,000 in equity in about the same time with a mortgage which is less than your rent. Oh, I also have two DVC contracts too!

And the more you try to make your point, the more you show your true colors. You might OWN your house, and you may have 2 DVC CONTRACTS, but in my RENTED house, and with my 1 DVC CONTRACT I have more class and respect for other peoples opinion than I guess you do-and money can't buy that.

 

[global_mom]

Goodness gracious, everyone is entitled to an opinion but there is no reason for one poster to attack another!

Every situation is different especially where real estate is concerned. Many parts of the country are in real estate turmoil as some posters have stated. That would make their decisions very different from someone else's in a more stable real estate market. DH is a Realtor and has closed 40+ transactions for each of the past 2 months. Every area and every market is different. Our local market is strong and that effects what we can do as far as other major purchases.

No need to fuss....

 

[disneyfan2kids]

I have more class and respect for other peoples opinion than I guess you do-and money can't buy that.