Is your DVC "In the Money" or Not

[DVC Doctor]

I know that most DISmembers do not like calling DVC membership an "Investment" and I get all the pros and cons of that term, however, spending $10,000 to $40,000 on anything is an investment for me and I like to evaluate if I made a good or not so good financial purchase.

Of course, buying into DVC is for vacations, family trips, and memories, but it can also be financially rewarding (as in we saved a ton of money with DVD) or a financial mistake (as in we should have never bought and just stayed at hotels via cash).

The interesting thing is that not ever DVC member stays a member for life and it is only when they sell, can they for sure, determine if it was worth it or not.

I decided to look at all the DVC resorts, try to estimate the approximate cost that someone would have bought their membership during the sales from Disney, and then look at resale values today and then calculate if they are "In the Money" or "Break Even" or "Not in the Money"

Again, your exact situation many vary, as these are just averages and estimations. Also, if you are NOT selling, then this does not apply to you and of course, this data can and will change in the future.

Here are My Impressions:

-BWV owners made the BEST investment with an approximate 54% INCREASE in value

-Anyone that bought VGC made a smart investment and had large gain at +36% in a realatively short time

-BC owners also made wise investments and can now sell for about 15% gain

-OKW owners not only made a good investment, but had great perks and are at +11%

-WL is about a 9% gain and that may rise with new demand for this location.

-HHI, BLT, and VGF are at slight losses, but this is not a big deal at a 4% loss

-HHI owners have not gotten the respect they deserve and are often lumped in with VB as a DVC mistake, but the data clearly shows that this was a better buy that SSR, Aulani, AKV and VB

-SSR owners STILL have not broken even and have been overshadowed by the newer and older resorts. Disney really overbuilt this resort and it is reflected with a 15% loss

-Aulani has been a great trade for current DVC members that finally get a DVC in Hawaii (Mahalo), but not such a great deal for owners as they are at a 21% loss

-Animal Kingdom Villas also followed the mistake and overbuilt like SSR and has a 24% loss

-Vero Beach is definitely pulling up the anchor as the worst DVC investment with a 30% loss, but at least those owners get to book a nice beach resort.


Lessons for Disney
- Do NOT overbuild DVC resorts !!!


***************************

In the Money

***************************

Boardwalk Villas
1996-1999
Approximate cost = $63
Current value = $97
In the Money = +$34
% Gain = 54%

Grand Californian
2009-2013
Approximate cost = $110
Current value = $150
In the Money = +$40
% Gain = 36%

Beach Club Villas
2002-2004
Approximate cost = $90
Current value = $105
In the Money = +$15
% Gain 17%

Old Key West
1991-1998
Approximate cost = $70
Current value = $78
In the Money = +$8
% Gain = 11%

Wilderness Lodge
2000-2002
Approximate cost = $75
Current value = $82
In the Money = +$7
% Gain = 9%

***************************

Break Even

***************************

Hilton Head
1996-2000
Approximate cost = $67
Current value = $64
Not in the Money = -$3
% Loss = -4%

Bay Lake Towers
2009-2013
Approximate cost = $130
Current value = $125
In the Money = -$5
% Loss = -4%

Grand Floridian
2013-2015
Approximate cost = $155
Current value = $147
Not in the Money = -$8
% Loss = -5%

***************************

Not in the Money

***************************

Saratoga Springs
2004-2008
Approximate cost = $100
Current value = $85
Not in the Money = -$15
% Loss = -15%

Aulani
2011-present
Approximate cost = $140
Current value = $110
Not in the Money = -$30
% Loss = -21%

Animal Kingdom Villas
2007-2012
Approximate cost = $110
Current value = $84
Not in the Money = -$26
% Loss = -24%

Vero Beach
1999-2002
Approximate cost = $72
Current value = $50
Not in the Money = -$22
% Loss = -30%

 

[davper]

I just closed on my 2 contracts. And based on your valuation, I am in the money on one and break even on the other.

But I didn't buy with that in mind. I view the initial purchase as sunk costs that I don't expect to get back. If down the road I sell and there is value there, great. But I won't be disappointed if I get to the end of the contract and all I get from Disney is a reminder my contract terminates in 12 months.

 

[HookdonWDW]

Where did you come up with your approximate costs? My initial buy in costs at both VWL and BCV (Direct) were significantly lower...

 

[deide71]

I think your costs are wrong.

I purchased my first contract direct through Disney at Saratoga Springs in 2005. The cost was 83.00/pt, it was a special promotion they were running.

 

[jekjones1558]

Something is wrong with your BWV numbers. Typo?

 

[supersnoop]

BLT is backwards, by your numbers. Lots of problems with the math here.

 

[pharmlivin]

Have to agree with posters here...my cost for VWL in May 0f 2001 was about $67/point direct from Disney...nowhere near the $80 referenced by the OP

 

[duckygirl]

We paid $115 pp direct in October 2009 with one year of developer points included.

 

[rsimon]

To the OP, your cost basis is off on the resorts. Specifically the two I have personal knowledge of are Aulani and BLT. Our BLT contracts cost us between $100 and $105 / pt with incentives factored in. This is not giving full valu to developer points. I am not sure where you got your prices for Aulani from as our cost was $108/pt with incentives and we got subsidised dues.

We sold our BLT contracts recently for $125 avg price so we had a substantial gain. Aulani is break even but not a huge loss as you show.

Frankly thoug, everyone has different costs based on incentives

 

[DVC Doctor]

I found a few errors in BWV, BLT, and WL calculations and fixed them in the first post.

Congrats to BWV as the best "Return on Investment" of any DVC owner.

I used approximate costs for buy-in directly from Disney as 95% of all owners joined this way. Of course if you bought in at the beginning or with some super special, your cost may be lower, but I am trying to get an average price for all owners and had to make a guess as the prices may be higher if you bought in at close to sell out. I did not include any incentives like free points as that is hard to calculate.

SSR ranged in price from $80 to $115 and I chose $100 as an average
WL ranged in price from $67 to $80 and I chose $75 as the average
BC ranged in price from $80 to $95 and I chose $90 as the average
BW ranged in price from $60 to $67 and I chose $63 as the average

If there are any more errors, post them here.

 

[bwbuddy5]

Why not include an option "I bought solely because it makes me happy and don't care about its resale value"

 

[lovin'fl]

Well, just sold our AKV that we paid $66pp for in 2013...sold for $80pp (though sold stripped and credited buyers for 2016 annual dues which basically brought it down to $73.70pp) so 'in the money' there.
Current contracts:
200 OKW that we paid $76pp for in 2006...going rate mentioned above is $78pp so $2pp 'in the money' (+$400)
HHI (3 contracts there) 2 (50 and 25 pointers) that we paid $50 and $50 for in 2012...going rate is $64pp so $14pp 'in the money- bought 3rd contract (another 50 points) for $60pp in 2013, so $4pp 'in the money' (+$1050 and +$200)
------now I selected 'push' and here's why-----
BWV (2 contracts there) that we bought direct in 2014 and paid $123 for 55 points and $130 for 25 more points...going rate is $97pp so we are $26pp and $33pp 'in the hole' on those (-$1430 and -$825)

 

[DVC Doctor]

To the OP, your cost basis is off on the resorts. Specifically the two I have personal knowledge of are Aulani and BLT. Our BLT contracts cost us between $100 and $105 / pt with incentives factored in. This is not giving full valu to developer points. I am not sure where you got your prices for Aulani from as our cost was $108/pt with incentives and we got subsidised dues.

We sold our BLT contracts recently for $125 avg price so we had a substantial gain. Aulani is break even but not a huge loss as you show.

Frankly thoug, everyone has different costs based on incentives

Aulani ranged from $110-$160 and I chose $140 as an average, if you bought at $108 then you got a great bargain, but this is NOT the average for the resort, it is the lowest price it sold.

BLT ranged from $100-$160 and a few people paid below $100 with incentives, but those are rare and I chose $130 as an average price.

Of course everyone has different prices for buy-in from Disney, but the point of this exercise is to look at averages per resort compared to averages for resale now and see how the average person did with their investment. Of course there will be a few outliers.

The Data is Clear - the average DVC member that bought BWV, VGC, and BCV direct from Disney during the active sales period are sitting pretty now as they can sell for a nice profit and the average DVC member that bought Aulani, AKV, and VB direct from Disney are not sitting pretty as they would be at a loss if they sold now.

 

[DVC Doctor]

Why not include an option "I bought solely because it makes me happy and don't care about its resale value"

I'll let you start a thread on that.

DVC should be for vacations savings and family trips and building memories and experiences, but that comes at a HUGE price and I personally consider that an investment. I can't change the past and buy BWV or OKW at the lowest price, but I can try to learn about the historical prices and try to determine if I should buy Poly or another resort.

Well, just sold our AKV that we paid $66pp for in 2013...sold for $80pp (though sold stripped and credited buyers for 2016 annual dues which came to $73.70pp) so 'in the money' there.
Current contracts:
200 OKW that we paid $76pp for in 2006...going rate mentioned above is $78pp so $2pp 'in the money' (+$400)
HHI (3 contracts there) 2 (50 and 25 pointers) that we paid $50 and $50 for in 2012...going rate is $64pp so $14pp 'in the money- bought 3rd contract (another 50 points) for $60pp in 2013, so $4pp 'in the money' (+$1050 and +$200)
------now I selected 'push' and here's why-----
BWV (2 contracts there) that we bought direct in 2014 and paid $123 for 55 points and $130 for 25 more points...going rate is $97pp so we are $26pp and $33pp 'in the hole' on those (-$1430 and -$825)

Your data is from buying "resales" and I did not compare or compute those prices and I only wanted to compare DVC prices that the average person paid to buy a particular resort at a particular time and compare that to resale prices now.

I was surprised to learn BWV owners made the best investment.

 

[rsimon]

Aulani ranged from $110-$160 and I chose $140 as an average, if you bought at $108 then you got a great bargain, but this is NOT the average for the resort, it is the lowest price it sold.

BLT ranged from $100-$160 and a few people paid below $100 with incentives, but those are rare and I chose $130 as an average price.

Of course everyone has different prices for buy-in from Disney, but the point of this exercise is to look at averages per resort compared to averages for resale now and see how the average person did with their investment. Of course there will be a few outliers.

The Data is Clear - the average DVC member that bought BWV, VGC, and BCV direct from Disney during the active sales period are sitting pretty now as they can sell for a nice profit and the average DVC member that bought Aulani, AKV, and VB direct from Disney are not sitting pretty as they would be at a loss if they sold now.

That is fine as this is your thread. I just pointed out that the points we bought and the majority of the points sold were at a much lower price than your price you showed. I wouldn't use the current max for Aulani in the average as the thread implies that you are looking at returns from people that bought a while ago not recently. Same for BLT since it was about sold out and just finishing up when the prices were going up through the 140-145 price.

Just my .02.

 

[ziravan]

We paid $84/point for 252 BCV and $165/pt for 168 PVB points.

I own 420 points at a monorail and an Epcot resort for an average of $116/point.

Plus, I have guaranteed lodging at Disney until I'm 99.

I don't care about "in the money", but I like where I'm at.

 

[DVC Doctor]

That is fine as this is your thread. I just pointed out that the points we bought and the majority of the points sold were at a much lower price than your price you showed. I wouldn't use the current max for Aulani in the average as the thread implies that you are looking at returns from people that bought a while ago not recently. Same for BLT since it was about sold out and just finishing up when the prices were going up through the 140-145 price.

Just my .02.

Where is the Data to show that the majority of points were bought at lower prices than I posted?

I used DVC Mikes database for prices and dates

---------------------------------

Bay Lake Towers ranged in price from $100 to $170

Sales started in Sept 2008 for $112 plus a $5 incentive
2009 the price was $120
2010 the price hit $130
Early 2011 the price was $140
Late 2011 the price was $150
Early 2012 price was $155
Mid 2012 price was $160
Late 2012 price was $165
2015 price was $170

I personally estimated the Approximate cost = $130
Current value = $125
Not In the Money = -$5
% Loss = -4%

If you want to use $120 that is fine, but it is on the low end of the scale
In the Money = $5
% Gain = +4%

*****************

Aulani

Sales started in 2010 at $120 minus $6 incentive
In 2011 sales were halted to reset (raise) the price and annual dues
2011 price was $135
2012 price was $140
Early 2013 price was $145
Late 2013 price was $150
2014 price was $160
2015 price was $165

I personally estimated Approximate cost = $140
Current value = $110
Not in the Money = -$30
% Loss = -21%

If you want to use $130 that is fine and again it is on the low side of the scale
Not in the Money = -$20
% Loss = -15%

 

[McCrae]

The broad trends you have highlighted look to be correct, but the pricing is a bit off. We bought BLT in the summer of 2009 @ $99.

The resale market has recognised that each DVC property is different and priced accordingly. Not that different from how Disney have priced its hotel rooms. The VGF and VGC are clearly the premium resorts for both the hotel and DVC , some of our older resorts are more like the moderate type of hotels at Disney IMO.

 

[zavandor]

Lessons for Disney
- Do NOT overbuild DVC resorts !!!

Disney has sold all the resort and made a good margin on them.
The lesson is for buyers: don't buy overbuilt resorts!

Saratoga Springs
2004-2008
Approximate cost = $100
Current value = $85
Not in the Money = -$15
% Loss = -15%

I bought SSR during the recession for $50 and $58, but the second had previour year points that I rented out bringing the cost down to around $50 for both. Since then I spent 14 nights at AKV, 10 at OKW and 13 at VGC. I also rented excess points to cover all MF I paid since I had the contacts.
Even if I sell for $70 and not $80 and paying taxes and expenses I could even earn a little bit.
Net Results for my SSR contacts: I spent 37 nights in deluxe accommodations at WDW and DLR for free (and even a small gain!).
Not too bad, I'd say, but I bought resale and not direct.

I think your analysis doesn't accout for time value for money? Older resort would perform worst. I did some math some time ago taking into account inflation, but recently resale prices have spiked so we would have different results:
http://www.disboards.com/threads/long-term-value-of-dvc.3379818/

 

[com_op_2000]

OKW owner:
Originally bought direct in '93.
Added on direct in '96.
Added on resale in '11.
Paid within $1 for all my points.
Could sale now for a profit on all my points.
After more than 20+ years and 150+ DVC points based vacations I am way ahead. I could never have taken so many trips if I had to pay cash for the rooms. I believe that @2035 the cash value of the points will have to come down else there will not be enough time to recover the upfront costs to buy OKW points. So I have @20 more years of vacations before I wind up on the loosing end of the $$ equation (That is if another recession does not occur to drop prices again).