Is owning DVC really worth it?

[Dean]

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.

This is a perfectly legitimate option. I'd venture to say you have enough info to know what you'd like to do the next 10-15 years. If those plans include routine trips to Disney every couple of years or more and you can afford it, I'd suggest you consider buying. My definition of being able to afford it is to be able to pay for it up front and easily cover the dues and frankly, one shouldn't go on such a vacation if they couldn't anyway. What you'll pick up is control, more stay options and safety if you have to change your plans as well as less likely costs over a long term. As I understand your situation, the choice is to buy with the benefits I mentioned but the risks which would only be that your preferences or life situation would change over time. There are other options though. Since you already are involved with timeshares, you could buy into something that gave you RCI access. You could also buy less points, then bank and borrow and still have the other options.

 

[Shazzasmd]

I do think the cost of renting points is a fair way to compare to how much it would cost to own. You do, however, give up a certain amount of control. And you generally have less flexibility to change or cancel a trip. If this works for a given family, then renting may be the way to go.

 

[ELMC]

Although it's not a direct comparison, you can compare owning DVC and renting much like you would leasing a car or renting an apartment. When you lease or rent, you are not the owner. So although your up front costs are less, you are not in control of your situation and are subject to the whims of the owners (in the case of DVC this means increases in point rental prices, availability, trustworthiness of the owner, etc.). But like with a lease or rental, your commitment is often short term, which is a plus to many. When you own DVC, you pay more up front but you control many of the variables. There is value to that. Plus, over the long term, owning can be more cost effective than simply renting every year.

So to go back to the question that was originally asked in this thread, "Is owning DVC worth it?" the answer is yes. That's why people do it. But you have to make sure you do it wisely.

 

[permavac]

...If this works for a given family, then renting may be the way to go.

I agree. Renting is generally cheapest way to get into a DVC room, so for jnsma's question - no, you're not off base. I went through this when I was buying too. We rented a couple of times before we decided to buy into DVC. At the time we decided to buy, the numbers DID NOT work in favor of buying versus renting. We bought for other reasons - the biggest one being control of the reservation. Now, things have been changing and renting may not be the cheapest option soon. When I was renting (2008ish), $10 per point was the norm when renting from individual members. Now it has crept up to $11, $12, and even $13. At those prices, buying resale may be cheaper (but I haven't run the numbers and I'm not about to since I already bought and don't need to know the difference now ). So, if you generally rent your DVC stay, run the numbers for yourself and if they don't work, then keep renting... until the numbers do work OR you decide that you want more control of your reservation.

Terri

 

[permavac]

...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.

I think you're forgetting the third and (arguably) largest group of people: the ones (like me) who are just cheap and want the biggest bang for their buck Can we afford to buy DVC at retail prices? Yes. Would we ever do it? Nope. We carefully analyze most of our purchases and we budget very stringently - not because we have to but because it is financially prudent. I would guess that there are many people like me who run the numbers constantly to try to save a nickel here or there so that we can use that nickel for something else.

Terri

 

[Capo]

Lots of good comments here. Ultimately, the "worth" is a value proposition that has to be answered by the individual. DVC is not an "investment," it is not, by any means, the cheapest way to enjoy Disney. DVC is a prepaid vacation plan that is most appealing to large family/groups and/or people who stay at deluxe resorts most of the time anyway. If you're concerned about getting the best bang for your buck you're likely not staying in deluxe resorts or possibly even on Disney property. The "worth" is a personal decision in this regard.

Speaking purely financially, I think some folks jump into a purchase too easily. It's a large cost (both upfront and ongoing) with downstream impacts. Looking at it purely mathematically, you're not just losing the money through the purchase and maintenance fees, but you're losing the opportunity cost of what else you could be doing with that money (investing it, etc.).

I know this is a touchy topic and each person family ultimately has to make this decision for themselves, but I would make sure the following topics are covered in full before I would even consider such a large purchase:

- Am I in debt? (CC, student loans, cars, etc?)
- Am I properly saving for emergencies (ie -- emergency fund of sometype?)
- Am I properly saving for retirement?
- If applicable, am I saving for my kids college needs?
- Can I pay for DVC in CASH?
- Are the ongoing maintenance fees + the costs of the trips (travel, food, tickets, etc.) within an acceptable and maintainable annual vacation budget?

FOR ME, if you can't answer all of the above in a positive light, then you likely shouldn't buy DVC. This doesn't mean you can't have vacations or even go to Disney, but there are much more economically sound ways of enjoying down-time if you're buried in debt, have no retirement hopes, etc.

Vacations alone are a luxury item that many of us are blessed to do. DVC is a luxury on-top of a luxury and as such should only be pursued, in my opinion, by those "well enough off" to handle the cost while still taking care of themselves/families financially.

 

[Dean]

Lots of good comments here. Ultimately, the "worth" is a value proposition that has to be answered by the individual. DVC is not an "investment," it is not, by any means, the cheapest way to enjoy Disney. DVC is a prepaid vacation plan that is most appealing to large family/groups and/or people who stay at deluxe resorts most of the time anyway. If you're concerned about getting the best bang for your buck you're likely not staying in deluxe resorts or possibly even on Disney property. The "worth" is a personal decision in this regard.

Speaking purely financially, I think some folks jump into a purchase too easily. It's a large cost (both upfront and ongoing) with downstream impacts. Looking at it purely mathematically, you're not just losing the money through the purchase and maintenance fees, but you're losing the opportunity cost of what else you could be doing with that money (investing it, etc.).

I know this is a touchy topic and each person family ultimately has to make this decision for themselves, but I would make sure the following topics are covered in full before I would even consider such a large purchase:

- Am I in debt? (CC, student loans, cars, etc?)
- Am I properly saving for emergencies (ie -- emergency fund of sometype?)
- Am I properly saving for retirement?
- If applicable, am I saving for my kids college needs?
- Can I pay for DVC in CASH?
- Are the ongoing maintenance fees + the costs of the trips (travel, food, tickets, etc.) within an acceptable and maintainable annual vacation budget?

FOR ME, if you can't answer all of the above in a positive light, then you likely shouldn't buy DVC. This doesn't mean you can't have vacations or even go to Disney, but there are much more economically sound ways of enjoying down-time if you're buried in debt, have no retirement hopes, etc.

Vacations alone are a luxury item that many of us are blessed to do. DVC is a luxury on-top of a luxury and as such should only be pursued, in my opinion, by those "well enough off" to handle the cost while still taking care of themselves/families financially.

I would agree with all you state with one exception. I agree that there's a value that's variable from one person to another, however, if there is a track record, it is possible to compare from a financial standpoint as well. Obviously one has to make some assumptions but that's true by buying or not buying. The cheapest option is not to go, the next for periodic use, is likely non Disney timeshares. There are people who prefer to stay off property and do not put any value at all in staying on property.

 

[jockotaco]

These threads sometimes make me laugh. Everyone buys DVC for a differentt reason and "value propositions" are all over the board. Do I use rack rate? How do I calcualte the future value of money? Will the stock market go up or down? Should I buy used or resale? Will I like disney in 5, 10, 20 or even 30 years? Will my kids have kids? Wow if I tried to answer all of these I would definitely probably not buy, too many unkown answers. So why did I buy. Ok I assumed that all things stayed equal at todays dollars. I know that you can find discounted rooms but when I want to travel I want to travel and I can afford it, period end of story. I do not look for specials and dicounts the most important thig to me is if it fits into my schedule. I also assumed that I was not going to neccesarily always want to travel to a "disney resort" but a significant amount of the near future would be at Disney. So my wife and I took the must do trips of Grand Calif (my family lives in SD), Aluani, Anumal Kingdom, Vero Beach and a general trip to WDW. We compared rack rates and any specials to a given date that works for us this year and it turned out this was roughly our brak even. We didn't make any analysis of the future value of money, increase in hotel rates, increase in DVC dues or resale values as these are all unknown values. We decided to purchase because this was our breakeven and we dicided to purchase direct because, although the value isn't the best, the benefits of buying direct and traveling to non-disney properties does provide value. The future is unknown and we also discussed the loss of a job and significant income loss. Our thought was this....We can afford the buy in today and are making the "assumption" that since we both have advanced degrees we will always be able to afford the monthly dues. So in the case of significant income loss we could gurantee our family a kick *** vacation every 2-3 years. The bottom line is do what works for you. Don't make a foolish decision but make a reasonable decision that you can live with. As for me I love our DVC as I can share ot with family. This Holoday season we are going to give grandma her first trip to hawaii, how cool is that. Would have never done it without DVC.

 

[AllieV]

Ok, I'm asking for some trouble here, but bear with me. I'm not endorsing anything just giving an example. There's a Vero Beach contract for sale now with 150 points. They're asking $43.30. There are 150 2010 banked points that expire in Aug/Sep. There are 150 2011 points that were probably not banked and also expire in aug/sep. There are 150 points coming in September of this year. Let's suppose you could get that contract for $38 per point (personally I'd offer $34) and you split the current dues and closing costs. You'd be looking at about $6700 out of pocket up front.

Now, if you do a fire sale on those 300 expiring points at, say, $8.50 a point, then sold/rented off the 150 2012 points at an easy $11 per point, you'd be reimbursed $4200 within a couple of months of closing. That puts you at $2500 out of pocket for a 150 point contract, and you'd still have 150 points to use for next summer's vacation.

Yes, you're paying $7+ for dues, but it's a heck of a lot cheaper than the going rate of $12 or $13. In my book, it's worth it. Even if Disney sold off the resort in a few years, you'd not be at a loss.

 

[ToddyLu]

My justification went like this...

I am 40, I go to Disney every year for at least 9 nights and that is not going to change. I want a nice room with a fridge, space, and more privacy in the restroom (thinking about value bathrooms). I wanted a luxurious pool area and an awesome out of this country theming (hence the choice of AKV). DH goes with me and he kinda liked the idea but was happy staying at Pop. But he also supports me and understood it was a purchase that was important to me. I am a nurse and he is a fireman. DVC would be the only way we could afford to stay at a deluxe resort consistantly--I mean if you are going for a "hotel" room just stay at Pop, right. So the ammenities that the DVC resorts provided was important. So we bought. We do not have children, we do not own a boat, ATV, golf or hunt. Disney is our "thing" and the way we spend our vacation dollars.

Or you can look at it like this--my mantra is always...

DVC changes your trip to Disney like a Corvette changes your drive to work. You get there but the experience changes.

The "ahhh" feeling that I get when we walk in those Kidani doors is simply worth the cost.

 

[DougEMG]

Ok, I'm asking for some trouble here, but bear with me. I'm not endorsing anything just giving an example. There's a Vero Beach contract for sale now with 150 points. They're asking $43.30. There are 150 2010 banked points that expire in Aug/Sep. There are 150 2011 points that were probably not banked and also expire in aug/sep. There are 150 points coming in September of this year. Let's suppose you could get that contract for $38 per point (personally I'd offer $34) and you split the current dues and closing costs. You'd be looking at about $6700 out of pocket up front.

Now, if you do a fire sale on those 300 expiring points at, say, $8.50 a point, then sold/rented off the 150 2012 points at an easy $11 per point, you'd be reimbursed $4200 within a couple of months of closing. That puts you at $2500 out of pocket for a 150 point contract, and you'd still have 150 points to use for next summer's vacation.

Yes, you're paying $7+ for dues, but it's a heck of a lot cheaper than the going rate of $12 or $13. In my book, it's worth it. Even if Disney sold off the resort in a few years, you'd not be at a loss.

I've looked at VB contracts like this and they are indeed tempting with that extremely low initial buyin costs. What has always stopped me from buying them is the worry that those MF will keep increasing at their historical rate of 4.6% compounded annually.

Although $2500 isn't that much to risk.

 

[ELMC]

I've looked at VB contracts like this and they are indeed tempting with that extremely low initial buyin costs. What has always stopped me from buying them is the worry that those MF will keep increasing at their historical rate of 4.6% compounded annually.

Although $2500 isn't that much to risk.

I agree that $2500 isn't that much to risk, but when you look behind the curtain of this particular contract then it become a bit more problematic. First off, I think we are past the point where we can safely buy a SEP UY contract with 2010 points or expiring 2011 points. There is a real risk that those points will have zero value. There's also the problem of the seller. This one in particular is expecting a full price offer including closing and fees. So yeah, these things work great in theory, but there's often a big difference between theory and reality. In theory, when someone agrees to a deal they should honor it, knowwhatImean?

(The comment above was in reference to Doug's uncanny luck to have agreed upon deals only to have the seller change his mind the following day and go back and ask for more money. It was not meant as a slight or a zing, simply to illustrate that things are often very different between theory and practice. I'll throw a smiley face at the end to further illustrate my jocularity).

Oh and Doug, you hit the nail right on the head. It's not so much that the VB MF are high now, it's the compounding nature of the future increases that makes me nervous.

 

[AllieV]

I agree VB isn't the place to buy if the intent is to rent out the points on a regular or semi-regular basis. But I don't think that was the OPs original intent anyway. Yes, those points would likely expire before closing; it was just an example. There are a dozen more just like it with different UYs. Another way to look at this is that the increases in dues are about 2.5% to 3% higher than on-site. Even 3% "interest" is cheaper than most any loan you can get to buy a better contract. The majority of people are financing.

 

[staceymay00]

I think it has been for us. We aren't really spending less than we were before buying DVC, but we get more for our money. We are a family of five, and to stay onsite we either have to stay at a deluxe that sleeps five in a room or book two rooms. Considering buy in cost and MFs, we are not spending more than we were booking a deluxe with a discount in the 40% range, however we are getting a 2BR villa instead of one standard hotel room. We love, love, love the extra space since we don't spend as much time in the parks as we used to. The AP discount has also been a valuable perk, although I know it can go away at any time. We saved about $500 on our first set of APs, and will save about $750 later this year with the recent price increase.

 

[shalom]

Yeah, I also know about exchanging, I own another timeshare (that is not the caliber of DVC), but that is a hassle as well.

Have you crunched the numbers? I haven't done it since the kids all voted against DVC , but every time I've sat down and done the math, trading in through RCI cost a bit more than half what it did renting points. That's including the RCI trading fee and the DVC fee, however it does not include an RCI membership fee, since that comes with my TS ownership. Caveats: I only check 2 BRs, and I'm only looking at off-season (usually May).

I think you're forgetting the third and (arguably) largest group of people: the ones (like me) who are just cheap and want the biggest bang for their buck

But if money really was your highest criteria, you wouldn't be looking at DVC at all, because it's always possible to get a bigger, nicer unit offsite, or nicer pools or whatever, for much, much less. Bonnet Creek even offers bus service comparable to Disney's most of the day -- although of course their "hole" is precisely when I'd want it, if I were interested in taking a bus. But I've heard OKW has the same hole.

I think a big part of the appeal of DVC is something intangible -- owning part of the magic, being in the magic, belonging to the magic, whatever -- in which case crunching the numbers is necessary and important, but will never tell the whole story. Because if the money told the whole story, no one would pay to stay onsite, let alone buy into DVC! But that's true of every luxury -- wants are always about the intangibles, and vacations are all about wants rather than needs. Consider your usual park foods -- not exactly the stuff your body most needs, but totally the kind of thing you most want.

 

[DougEMG]

I agree VB isn't the place to buy if the intent is to rent out the points on a regular or semi-regular basis. But I don't think that was the OPs original intent anyway. Yes, those points would likely expire before closing; it was just an example. There are a dozen more just like it with different UYs. Another way to look at this is that the increases in dues are about 2.5% to 3% higher than on-site. Even 3% "interest" is cheaper than most any loan you can get to buy a better contract. The majority of people are financing.

Definitely VB is the best option for someone that wants to get into DVC with the lowest up front costs.

 

[permavac]

...Because if the money told the whole story, no one would pay to stay onsite, let alone buy into DVC!...

True - my comments are in relation to already having decided on a preference for DVC and should be taken as such, but since I didn't make that clear in my first post, here it is

Terri

 

[gray52]

1. I don't care what the costs are vs cash reservations... i live my BWV DVC!
2. I don't care how far the resale prices drop... i love my OKW DVC.
3. I don't care about direct purchase costs. I love my resale DVC.
4. I don't need to run numbers on break evens, costs over the life of the contract, money i could save staying off-site or anything.

I love coming to Disney. I love the fact that every year I'm staying at either BWV or OKW (or insert any other DVC resort here)... and if at some point i'm no longer able or willing to use it, I'll sell it for whatever the fair market value is... and if it's zero, I'll give it away with a smile.
DVC is one of the best decisions my wife and family have made. When i was a kid, I went to Kennywood Park one day a year... some day my kids will be amazed that, unlike most kids who never step foot on Disney property, they went to Disney World every year.
My 8-year old no longer needs to use PARK MAPS! That's totally awesome.

 

[Dean]

Definitely VB is the best option for someone that wants to get into DVC with the lowest up front costs.

It may be the cheapest upfront option. It's unlikely to be the cheapest long term options. I'd definitely question it being the best way to gain entry to the system, even for those that don't plan to plan 7 months out or more.

 

[fmer55]

1. I don't care what the costs are vs cash reservations... i live my BWV DVC!
2. I don't care how far the resale prices drop... i love my OKW DVC.
3. I don't care about direct purchase costs. I love my resale DVC.
4. I don't need to run numbers on break evens, costs over the life of the contract, money i could save staying off-site or anything.

I love coming to Disney. I love the fact that every year I'm staying at either BWV or OKW (or insert any other DVC resort here)... and if at some point i'm no longer able or willing to use it, I'll sell it for whatever the fair market value is... and if it's zero, I'll give it away with a smile.
DVC is one of the best decisions my wife and family have made. When i was a kid, I went to Kennywood Park one day a year... some day my kids will be amazed that, unlike most kids who never step foot on Disney property, they went to Disney World every year.
My 8-year old no longer needs to use PARK MAPS! That's totally awesome.

Love this post, my sentiments exactly