Is owning DVC really worth it?

[bakerworld]

Did not realize this is an old thread.

 

[silverace]

along with getting rooms for MF fees and along with renting if you purchase resale - and get a good price - you will get some or all of your money back if you chooses to sell. It's a bit more difficult if you purchase direct.

 

[fife]

Hi I am new and looking into DVC ownership.

Can someone correct my math/analysis if I am woring?

Assume you take 1 vacation every 3 years (bank, use and borrow).

The assumption is buying direct from Disney.

Cost of buying Disney Vacation Club (DVC) for 160 pts:
~$22,000 up front + ( ~ $900 annual maintence fee x 45 yrs remaining ) = approx $62,500 paid out over 45 years if kept for 45 yrs....of course can sell back to Disney or 3rd party anytime

Therefore annual cost is roughly $62,500/45 yrs = $1400 ($500 for pts and $900 maintenance fee) or cost for every 3 yrs = $4200

If we get 160 points annually over 3 yrs for 480 total (bank last yr, use current year and borrow next year), we could get the following trips every 3 years:


1) 7 days Disney Florida Animal Kingdom (Aug 16) in 2 BR Villa + 7 days Hawaii ( March or Aug ) in Deluxe room :
7 days late-August in Animal Kindgom Florida (2 bedrooms for 9 ppl) for 317 pts (cash price $5000) + 7 days Hawaii during Spring Break or August (Deluxe) 4 ppl) for 154 pts (cash price $3500)

2) 5 days Disney Florida Animal Kingdom (Aug 16) in 3 BR Villa : 4 days + 1 sat in late-August in Animal kingdon Florida (3 bedrooms for 12 ppl Savanna view) for 462 pts

3) 6 days Disney LA Grand California (Aug 16) in 2 BR Villa : in Grand California (2 bedrooms for 9 ppl) for 456 pts

4) 11 day Disney Florida trip after Aug 16:
7 days Saratoga/Tree Houses (3 bedroom treehouse for 9 ppl) for 285 pts + 4 weekdays Bay Lake (2 bedrooms for 9 ppl) for 192 pts

Comparison using Example 1 above by taking the vacations once every 3 yrs:
Cash price if bought online at published rates: Florida vacation $5000 + Hawaii vacation $3500 = $8500
Cost using Disney ownership = $4200 over 3 years with less hassle booking and free parking and $100 of disney admission, etc...
You are ahead just by the DVC to Florida already. Only issue is paying the up front $20+k to Disney

Breakeven Analysis by tak ing vacation using option # 1 every 3 yrs for 4 times over 12 year period)
A) Cost of Disney DVC ownership for 12 years $22,000 up front + (12 yrs x $900 maintenance) = $32800..then assume you sell/right-off owership for $0 (which is not the case as it will be still worth thousands)
b) cost of 4 cash vacation purchases of # 1 at published rates (Animal Kingom $20,000) and Hawaii ($14,000) = $34,000 assuming hotel prices dont go up

Any trips after year 12 with DVC ownership is just maintenance cost of $900+ and you can go every 3 years to both Animal Kindgom AND Hawaii (airfare excluded)

For reference, 2 weekday nights at Great Wolf Lodge for largest 9 person room is $1200US this August

So is my analysis sound that DVC is great if I own for 12+ years?

Comments/suggestions/corrections?

Thanks in advance

 

[chalee94]

of course can sell back to Disney or 3rd party anytime

don't count on selling back to disney. disney might take it back for free (foreclosure) or ROFR (take it away from a buyer who offered a lowball price) but they won't offer you anything for it in general.

Only issue is paying the up front $20+k to Disney

basically. you can get 160 pts resale for $10,000 to $12,000...so if you are concerned about financial analysis, why not go that route...?

So is my analysis sound that DVC is great if I own for 12+ years?

people could nitpick but that's probably in the ballpark since you are basically taking 2 weeks every 3 years...

but if flights to hawaii go up a ton in price and/or the family loses interest in disney trips, you are still on the hook for the annual maintenance fees even if you don't want to use the pts...so there is a trade-off.

 

[fife]

Thanks very much for your response.

don't count on selling back to disney. disney might take it back for free (foreclosure) or ROFR (take it away from a buyer who offered a lowball price) but they won't offer you anything for it in general..

Thanks. but there is always a possibility of resale but I will assume $0 for simplicity.

basically. you can get 160 pts resale for $10,000 to $12,000...so if you are concerned about financial analysis, why not go that route...? .

True, but I want to be able to use the Points towards non-DVC locations as well.

people could nitpick but that's probably in the ballpark since you are basically taking 2 weeks every 3 years...

but if flights to hawaii go up a ton in price and/or the family loses interest in disney trips, you are still on the hook for the annual maintenance fees even if you don't want to use the pts...so there is a trade-off.

Thanks for this. Flights to Hawaii are typically cheaper than to Florida since I am on the "Wet" Coast but I would be using points to fly mainly to fly free.


Regarding USE YEAR, If I plan my trips in March and end of August, would you say December is the best option?

 

[Dean]

Hi I am new and looking into DVC ownership.

Can someone correct my math/analysis if I am woring?

Assume you take 1 vacation every 3 years (bank, use and borrow).

The assumption is buying direct from Disney.

Cost of buying Disney Vacation Club (DVC) for 160 pts:
~$22,000 up front + ( ~ $900 annual maintence fee x 45 yrs remaining ) = approx $62,500 paid out over 45 years if kept for 45 yrs....of course can sell back to Disney or 3rd party anytime

Therefore annual cost is roughly $62,500/45 yrs = $1400 ($500 for pts and $900 maintenance fee) or cost for every 3 yrs = $4200

If we get 160 points annually over 3 yrs for 480 total (bank last yr, use current year and borrow next year), we could get the following trips every 3 years:


1) 7 days Disney Florida Animal Kingdom (Aug 16) in 2 BR Villa + 7 days Hawaii ( March or Aug ) in Deluxe room :
7 days late-August in Animal Kindgom Florida (2 bedrooms for 9 ppl) for 317 pts (cash price $5000) + 7 days Hawaii during Spring Break or August (Deluxe) 4 ppl) for 154 pts (cash price $3500)

2) 5 days Disney Florida Animal Kingdom (Aug 16) in 3 BR Villa : 4 days + 1 sat in late-August in Animal kingdon Florida (3 bedrooms for 12 ppl Savanna view) for 462 pts

3) 6 days Disney LA Grand California (Aug 16) in 2 BR Villa : in Grand California (2 bedrooms for 9 ppl) for 456 pts

4) 11 day Disney Florida trip after Aug 16:
7 days Saratoga/Tree Houses (3 bedroom treehouse for 9 ppl) for 285 pts + 4 weekdays Bay Lake (2 bedrooms for 9 ppl) for 192 pts

Comparison using Example 1 above by taking the vacations once every 3 yrs:
Cash price if bought online at published rates: Florida vacation $5000 + Hawaii vacation $3500 = $8500
Cost using Disney ownership = $4200 over 3 years with less hassle booking and free parking and $100 of disney admission, etc...
You are ahead just by the DVC to Florida already. Only issue is paying the up front $20+k to Disney

Breakeven Analysis by tak ing vacation using option # 1 every 3 yrs for 4 times over 12 year period)
A) Cost of Disney DVC ownership for 12 years $22,000 up front + (12 yrs x $900 maintenance) = $32800..then assume you sell/right-off owership for $0 (which is not the case as it will be still worth thousands)
b) cost of 4 cash vacation purchases of # 1 at published rates (Animal Kingom $20,000) and Hawaii ($14,000) = $34,000 assuming hotel prices dont go up

Any trips after year 12 with DVC ownership is just maintenance cost of $900+ and you can go every 3 years to both Animal Kindgom AND Hawaii (airfare excluded)

For reference, 2 weekday nights at Great Wolf Lodge for largest 9 person room is $1200US this August

So is my analysis sound that DVC is great if I own for 12+ years?

Comments/suggestions/corrections?

Thanks in advance

In general that sounds OK. IMO, the biggest flaws in your comparison are using DVC rack rates as the comparison and as pointed out, using retail purchase price instead of resale. The next is ignoring the time value of money. From an overall value standpoint, it's like buying a car and comparing BMW to Mercedes while not looking at Infinity, Lexus, etc. Still, when it's said and done, if you'd pay cash for the type of options you listed and use as you've planned, DVC does make sense if you value staying on property. Don't forget there are other options that may actually be better for you (none of us know), esp for HI where there is no park location to compare to.

 

[vicki_c]

True, but I want to be able to use the Points towards non-DVC locations as well.

If this is your main reason for wanting to buy direct, you may want to reconsider. Often this is not a good use of points anyway and you would do better to pay cash for non-DVC locations or options. Buying direct is paying a lot of extra money and you won't get that additional value back in using it for non-DVC locations.

 

[DougEMG]

If you want to stay on site at Disney, buy resale and spend half the money and half the MF. Then for travelling and trading outside of Disney take that money that you saved buying resale and buy something outside Disney that is good for trading.

As some of the RCI experts here can better explain, trading into RCI with DVC is an expensive way to trade.

 

[ELMC]

In general that sounds OK. IMO, the biggest flaws in your comparison are using DVC rack rates as the comparison and as pointed out, using retail purchase price instead of resale.

This is a really good point. When I first spoke with my DVC salesperson he mentioned that my "break even" point with regards to buying DVC direct would be 8 vacations. After further analyzing the numbers I realized that he was in fact comparing DVC costs to the rack rate of the room. When I compared direct prices with paying cash with a discount or renting points from an existing owner, the break even point got pushed out to about 15 years. I'm not going to do anything at a loss for 15 years just so I can benefit in years 16+.

So I bought resale, where my break even point will be somewhere around year 5. That I can live with. It's all about personal preference and what you are comfortable with. Just make sure you analyze all the possibilities and not just the ones that the salespeople present you with. Good luck!

 

[Dean]

This is a really good point. When I first spoke with my DVC salesperson he mentioned that my "break even" point with regards to buying DVC direct would be 8 vacations. After further analyzing the numbers I realized that he was in fact comparing DVC costs to the rack rate of the room. When I compared direct prices with paying cash with a discount or renting points from an existing owner, the break even point got pushed out to about 15 years. I'm not going to do anything at a loss for 15 years just so I can benefit in years 16+.

So I bought resale, where my break even point will be somewhere around year 5. That I can live with. It's all about personal preference and what you are comfortable with. Just make sure you analyze all the possibilities and not just the ones that the salespeople present you with. Good luck!

When I address the issue of dollars related to buying DVC, I often talk of savings and value. In my discussions savings is related to what you would have paid without owning DVC and value is what extra you get for the same or higher cost. As a general statement it's not difficult to make the numbers work if one would go routinely to Disney and stay on property at a moderate resort or higher assuming you stick to the unit types that are comparable (studio to 1 room, 2 BR to 2 rooms). Historically one also needed to go light or neutral on weekends, don't know if that will come into play again in the future, but it may. There is absolutely no way to make the numbers work looking at cash type exchanges, none. Paying extra for this option is simply throwing money away no matter how it's rationalized. There are legitimate reasons to buy retail but the cash type exchanges are not among them.

 

[ELMC]

When I address the issue of dollars related to buying DVC, I often talk of savings and value. In my discussions savings is related to what you would have paid without owning DVC and value is what extra you get for the same or higher cost. As a general statement it's not difficult to make the numbers work if one would go routinely to Disney and stay on property at a moderate resort or higher assuming you stick to the unit types that are comparable (studio to 1 room, 2 BR to 2 rooms). Historically one also needed to go light or neutral on weekends, don't know if that will come into play again in the future, but it may. There is absolutely no way to make the numbers work looking at cash type exchanges, none. Paying extra for this option is simply throwing money away no matter how it's rationalized. There are legitimate reasons to buy retail but the cash type exchanges are not among them.

I'm not understanding what you mean by "cash type exchanges". Could you please elaborate?

 

[gatorgirl02]

Thanks very much for your response.
Thanks. but there is always a possibility of resale but I will assume $0 for simplicity.



True, but I want to be able to use the Points towards non-DVC locations as well.


Thanks for this. Flights to Hawaii are typically cheaper than to Florida since I am on the "Wet" Coast but I would be using points to fly mainly to fly free.


Regarding USE YEAR, If I plan my trips in March and end of August, would you say December is the best option?

Two things:
1) I don't think it would quite be fair to value a resale at $0. Assuming you bought at a resort with a longer life (say BLT or AK), even in 12 years, I think it would be worth something (say maybe 50% of the resale purchase price)
2) I'm not sure how you would quatify it, but with DVC you are locking in a "fixed" price over the life of the contract. The points chart is fixed in number of rooms at point levels, where I can guarentee the price of a room will increase exponentially over the years for cash buyers.
Just something else to throw into the equation...

Btw, the Dec UY sounds like a good idea.

 

[crisi]

Two things:
1) I don't think it would quite be fair to value a resale at $0. Assuming you bought at a resort with a longer life (say BLT or AK), even in 12 years, I think it would be worth something (say maybe 50% of the resale purchase price)
2) I'm not sure how you would quatify it, but with DVC you are locking in a "fixed" price over the life of the contract. The points chart is fixed in number of rooms at point levels, where I can guarentee the price of a room will increase exponentially over the years for cash buyers.
Just something else to throw into the equation...

Btw, the Dec UY sounds like a good idea.

A lot of accounting ROIs will use $0 as a salvage value even if its likely that you'll be able to get more - its the most conservative way to play with the numbers. You are right that it will likely be worth something. But figuring $0 is safer.

You are locking in a "fixed" price (minus dues inflation) but you are also locking in trips that you might skip otherwise - with park ticket increases and increases in the price of food. Again, conservatively, I'd balance that risk by not trying to figure out Disney's increase in rack rates.

Post ownership, when you know what happened, its valid to plug these things in. Pre ownership - its still valid, but it isn't a very conservative way to figure your numbers.

I've said this before however - DVC is something you can either afford to own or you can't. If you can afford to own it, its no different than choosing to drive a BMW over a Camry. If you can't afford it, no juggling with the numbers is going to make this a good decision - you might get lucky and it won't be one you regret. Playing with the numbers is fun if you are a certain kind of geek, but over the years I think that there are two kinds of people who play with numbers - geeks like me (and a whole bunch of us who normally enter into these conversations) who rather enjoy playing the numbers game and people trying to afford something they shouldn't. If this NEEDS to make financial sense to work, don't do it.

 

[Dean]

I'm not understanding what you mean by "cash type exchanges". Could you please elaborate?

A cash echange is any option where Disney has to pay someone else cash. This includes Disney cruise lines, the Disney collection, the concierge collection and adventures by Disney.

 

[dr&momto2boys]

It is definately not for everyone, but for us it's definately worth it!

It sounds like it was worth it during the time you had it too. $1800 for 2 weeks onsite for 10 people!

We have a big family too and growing. We calculated that we would pay the same to stay at economy accomodations as we pay for our deluxe DVC accomodations...and we definately prefer the deluxe resorts. Not to mention the awesome times and memories we've had using the GVs with our extended family! We love DVC and it's worth every penny to us!

And regarding "free" dining... you can't always get that.

 

[Denmage]

If this is your main reason for wanting to buy direct, you may want to reconsider. Often this is not a good use of points anyway and you would do better to pay cash for non-DVC locations or options. Buying direct is paying a lot of extra money and you won't get that additional value back in using it for non-DVC locations.

I agree with this. We have a couple of RCI timeshares that we use for Non-Disney locations. And I would NEVER even consider banking my Disney points into RCI. I would rent my points (and have) before I put them in RCI. RCI charges you to use your points and to combine them. It's just one fee after another. But one of my timeshares has an annual maintenance fee of $400 per year, so it is a cheaper alternative and works better outside of Disney.

 

[fife]

chalee94, Dean, vicki_c, DeanEMG, ELMC, gatorgirl02, dr&momto2boys, Denmage and crisi, thanks for all your input and your points are all well valid.

How do you "rent" out your points?

 

[DougEMG]

How do you "rent" out your points?

You can either do it privately by posting on the rent boards here or you can go through a broker such as Daddio or DVC Paul.

 

[Deb & Bill]

Hi I am new and looking into DVC ownership.

Can someone correct my math/analysis if I am woring?

...If we get 160 points annually over 3 yrs for 480 total (bank last yr, use current year and borrow next year), we could get the following trips every 3 years:


1) 7 days Disney Florida Animal Kingdom (Aug 16) in 2 BR Villa + 7 days Hawaii ( March or Aug ) in Deluxe room :
7 days late-August in Animal Kindgom Florida (2 bedrooms for 9 ppl) for 317 pts (cash price $5000) + 7 days Hawaii during Spring Break or August (Deluxe) 4 ppl) for 154 pts (cash price $3500)

2) 5 days Disney Florida Animal Kingdom (Aug 16) in 3 BR Villa : 4 days + 1 sat in late-August in Animal kingdon Florida (3 bedrooms for 12 ppl Savanna view) for 462 pts

3) 6 days Disney LA Grand California (Aug 16) in 2 BR Villa : in Grand California (2 bedrooms for 9 ppl) for 456 pts

4) 11 day Disney Florida trip after Aug 16:
7 days Saratoga/Tree Houses (3 bedroom treehouse for 9 ppl) for 285 pts + 4 weekdays Bay Lake (2 bedrooms for 9 ppl) for 192 pts...

Some of these choices will depend on what your home resort is. GCVillas are very difficult to get at seven months out. Grand Villas (including AKV) will be hard to get at seven months out. Treehouse Villas will be hard to get at seven months out. And I'm not sure about Aulani, but that could also be hard to get at seven months out. AKV one bedroom might be possible, BLT one bedroom might be possible.

Don't waste your time using your points for non-DVC stays. It's not cost effective. And you can't depend on renting out your points either all the time. Who knows where DVC will go with that in the future? They have changed some of the rules in the recent past to make it harder to rent points - limited number of associate members (can't use a broker as an associate member), paying for dining plan when it is added to the reservation, no PayPal for timeshare rentals.

 

[jnsma]

Interesting thread as I've considered DVC as an option mutliple times but haven't bought in yet. My main reasoning at this point is that renting has worked out very well for us and it would take greater than 10 years to recoup the costs of buying and not renting. Let me know where my logic is flawed or what perks I might be missing.

First, let me say that I've stayed at the following: WLV direct from Disney, SSR through II exchange (just before DVC went RCI only), BWV and AKV by renting. And I'm searching daily for someone who selling points for an upcoming trip.
The renting has always worked out without an issue. I realize it is a bit more work searching for people to make a reservation and more trusting of the DVC member.

On the other hand it comes down to the money. Using rough numbers, say I buy 200pts @ $50/pt that is $10K up front. Then there are MF that we'll estimate at $5/pt, that is $1K/year. I've rented for $10/pt, so for those same 200pts, it is $2k (based on my searches the going rate is higher than $10/pt these days). That means I'd have to go 10 years in order to recover my up front costs.
I realize we are going into our 3rd year of renting and 5th annual trip to Disney but for us. But I like the freedom of not being locked into it. Yeah, I also know about exchanging, I own another timeshare (that is not the caliber of DVC), but that is a hassle as well.
Am I way off base or missing the boat on something?
Thanks.