Making sense of a DVC purchase...a few questions for a finance genius :)

[linzjane88]

Hello!
We (I) have been evaluating a DVC purchase for a few years on and off. Now that point prices are through the roof I have finally decided this is a direction we need to go Mr. Linzjane88 might need some more convincing. As far as home resort convenience is biggie. We love the dining at Epcot and DTD. SSR, BCV, or BWV seem to be where I am leaning but I am also looking at the ease of selling down the road. We are pretty hardcore Disney fans--I can't see us ever NOT going to Disney but who knows the future? I am very much a spreadsheet nerd and while I feel like we have reached the point where DVC would be a wise choice I also like to have some data in an Excel spreadsheet to back me up. While I enjoy hard numbers and data, economics and money talk are not my strong point so some of the ready-made DVC valuation spreadsheets keep losing me. I want to 'run the numbers' but I want to make sure I am doing it accurately and I am running into a few questions after hours pouring through threads:

1) Why do people compare the value of the dollars spent towards DVC against the value of the same dollars put into a retirement fund or high-interest savings? Obviously, that's going to make DVC look like a terrible way to go but it's not realistic. If I don't buy DVC that doesn't mean I am going to take my vacation fund and cancel all vacations forever to invest. I am still going to spend X dollars per year, just on hotels. Am I missing something there?

2) Why factor in inflation into the cost of long term ownership? I understand that in 2040 the cost of a hotel room is going to be a gazillion dollars but the cost of MF's is going to have gone up as well and I assume I am going to be making considerably more as well. Can't I just leave those out of the equation for convenience?

3) A contract that expires in 2042 seems like a glaringly poor choice, right?. If I decided to sell in 20 years I imagine people are going to be less interested in a contract that's going to have 0 value in 11 years. I realize this is not an investment but given the option isn't a longer contract much better?

4) Expiration dates aside, could BWV/BCV be a solid choice considering the walking distance to what will likely be a very popular Star Wars land? Assuming it's completed by 2042 .

5) Does it seem like a possibility that point rental might become considerably more popular over resale the closer we get to expirations? For those who like deluxe accommodations but don't want to pay cash prices and won't want to buy a contract that has a few years left.

We plan to go in September doing a split stay at AKL and BCV on rented points. Any purchase won't be until later in the year more than likely. My plan is to continue gathering data and then present a strong case to DH after the deluxe stay in September. As it is right now trying to explain how DVC works is getting me nowhere. I think I need some of the lines from the DVC sales pitch

ETA: I see the typo in my thread title and can't figure out how to change it so it stays
ETAx2: I figured it out.

 

[Dean]

First, my view is one buys a luxury purchase if one can afford it. To me that means no consumer debts and paying cash whether the item be a timeshare (actually vacation in general) or an expensive car. Assuming those qualifications, owning DVC is simply a financial choice even though many complicate it with emotions which frequently affect their decisions negatively. I'm assuming of course that the amount of a DVC is enough to make one think about the money, Bill Gates wouldn't buy into DVC but if he wanted to it'd be like a cup of coffee for us. The other issue, and likely more important one, is the long term dues commitment. I also look at return on investment of closer to 10 years rather than the life of the contract, one never knows where all the variables will be in a number of years and the dues alone might be worse than not owning.

1. You're talking long term dollars, you would not spend the entire amount up front on a comparable vacations but obviously you'd spend part of them and more over a shorter period of less than 5 years. My view is for resale you consider half long term investment and the other half short term investment. For retail, I'd shift more to long term basically 75% long term $$$. Obviously all dollars are down the tube long term so I'd compare to one of 2 situations, renting DVC or what you would spend if you didn't own DVC. Comparing to DVC rack rates or even a discounted rack rate is a fools comparison IMO unless one would routinely go that route or for Disney suites anyway. I use 1% on the short term and 8% after tax on the long term which I feel are conservative.

2. Inflation is factored in on both sides. It adds costs and risks to the dues long term but also increases the cost of the cash comparison over time. You'll be pretty close if you ignore it on both sides but I wouldn't factor it in one side and not the other.

3. Not necessarily. Variables are where/what you want to stay, short and long term cost. It does affect price and value but isn't a deal breaker for most situations. And certainly many of the best options are 2042 expirations. One shouldn't buy thinking of selling though it's good to have a "just in case" exit strategy. I'd actually go in assuming you won't or can't sell no matter what you buy so this really shouldn't be an issue for a good DVC candidate, if it's a major issue, one likely shouldn't buy. I think there is relatively little $$$ value to a longer contract based on RTU expiration. I do think it varies with the home resort and to a degree, the contract size. Some of the longer RTU are some of the worst $$$ values in many ways because of higher prices and higher points.

4. Certainly BWV/BCV can be a good choice but they are likely more expensive choices long term, esp BCV, than some of the other choices real. $$$ wise BWV is especially attractive for the cheaper standard view option.

5. I think people will be more likely to rent than buy as the RTU expiration nears but I also think there will be a lower % of those looking to sell compared to now. I doubt owning to rent will ever make sense financially but renting when you own and have the points you won't use will hopefully continue to be a reasonable option.

If you go routinely over time, can afford it and can show him you'll save money or add significant value over what you would spend otherwise; that should do it. But that assumes those are all true. A one time trip is far different than a 40 year commitment. While I would strongly recommend against a retail purchase for most situations, doing the tour might be helpful. Having him get on these boards might also be helpful. Just realize that if all the variables aren't on the purchase side of the ledger, getting more info may convince him not to buy instead but appropriately so.

 

[CarolMN]

For us, the shorter expiration date is a good thing and a characteristic that I value. I do not want to pass on a financial "obligation" to our daughter. She and her future family may not be able to afford Disney vacations and/or may not want to go there as often as her father and I do.

As Dean says, a Disney vacation is a luxury and should be paid for out of discretionary income. IMO (I work in the financial services industry), there are many things young people should take care of before purchasing a luxury - especially one that carries annual financial obligations. I'm not a fan of financing luxuries, either for the same reason.

Many here may not agree with me and I'm OK with that. When I did our analysis, I was very conservative in that I did not assume that there would be any value left in our contract when (or if) we decided to sell. That said, we purchased BWV in 1999 & our contracts are now worth quite a bit more than we originally paid. Were we to sell, I could honestly say that we vacationed on just dues for many years. IMO, that's a "happy accident" and I do not think it is wise to assume that one can recover the initial outlay if one has to sell.

I have not ever regretted our purchase. As conservative as I am with money, I have to admit that my decision included a strongly weighted emotional component. I wanted it, it was an OK deal and we could afford it.

In my experience, all the analyses really don't mean as much as we want to give them credit for - many of us vacation differently after we buy so the comparisons we made pre-purchase are moot. We go more often, stay longer, stay in larger villas, treat friends and family, etc. I sincerely doubt that there are more than a handful of longer term members who can say that they actually still have the same travel patterns pre-DVC as they do now and it's a very good bet that NONE of the spreadsheets they did pre purchase reflect the post DVC patterns.

Good luck with your decision.

 

[linzjane88]

Thank you everyone for the replies! I agree 100% about not financing this endeavor. Vacation is pretty important to us and we devote a good chunk of our income to it while otherwise living simply.

We do usually at least 2 Disney trips per year. Staying at the WBC has worked for us thus far because we haven't needed EMH with little ones but as the kids get a bit older I want to have the convenience of the extra hours and close proximity. That's an interesting take on the 2042 expirations CarolMN--in our case we will in our 50's when that time hits and hopefully I will have MANY more years of Disney'ing ahead of me....hopefully solo trips with the husband . I think that makes me lean towards a longer date a little more. BTW your photo of the Boardwalk is beautiful!

And thank you Dean for pointing out what I was not seeing regarding my first question. I knew there had to be some key I was missing there!

 

[disneynutz]

Buy, use it, buy your favorite resort(s) once you decide which resort(s), sell if you grow tired of the resort or Disney. Don't expect any money back when you sell.

Bill

 

[Dean]

Thank you everyone for the replies! I agree 100% about not financing this endeavor. Vacation is pretty important to us and we devote a good chunk of our income to it while otherwise living simply.

We do usually at least 2 Disney trips per year. Staying at the WBC has worked for us thus far because we haven't needed EMH with little ones but as the kids get a bit older I want to have the convenience of the extra hours and close proximity. That's an interesting take on the 2042 expirations CarolMN--in our case we will in our 50's when that time hits and hopefully I will have MANY more years of Disney'ing ahead of me....hopefully solo trips with the husband . I think that makes me lean towards a longer date a little more. BTW your photo of the Boardwalk is beautiful!

And thank you Dean for pointing out what I was not seeing regarding my first question. I knew there had to be some key I was missing there!

The first question is whether buying DVC makes sense, it seems it might in your situation. Then comes the question of home resort, contract size and UY. The other variable is will you vacation other places. A none DVC timeshare will do both FAR better than will DVC. One really has to fit these variables together like a jig saw puzzle to find what's best for a given person. Wyndham, Bluegreen, Marriott will all be MUCH cheaper than DVC short term and likely long term as well. Since savings and value seem to be a good portion of your needed approach, what you might look at is something like SSR or BLT which will be the best values for on property. SSR due to lower cost, standard view villas, and both lower and likely more controlled dues. BLT due to the lower dues and monorail access plus the standard view option.

 

[CarolMN]

.........(snip)........ That's an interesting take on the 2042 expirations CarolMN--in our case we will in our 50's when that time hits and hopefully I will have MANY more years of Disney'ing ahead of me....hopefully solo trips with the husband . I think that makes me lean towards a longer date a little more.

Our daughter was 18 when we bought DVC. Although some of our trips were with our extended family, we've done many with just the two of us. Those are some of my favorite trips, especially now that we're older and interested in more than just rides.

BTW your photo of the Boardwalk is beautiful!!

Thanks!

 

[SleighBelle]

Hi, I am in the process of purchasing BCV though resale. The contract is still in the 'verification' stage and have not yet been sent for ROFR, so I am keeping an eye on the ROFR thread too. While I wait, since you are on the fence, linzjane88, I will share the math I used to get comfortable with the purchase.

My kids and I love Yacht Club and BCV (we have actually only been to those 2 resorts!) so that was our first choice. I was put of by the exp date of 2042 at BCV too. My contract is for 200 points. And $105 per point. It's not a stripped contract so all 2016 points are intact. $21,000 total. For simplicity I am leaving out my closing costs. Also, the 2016 MF has already been paid, but I am leaving that out of the points calculation for simplicity. Also for simplicity, I am also leaving out that the expiration month is Jan and probably won't use the points in 2042. We seem to have 2042 stuck in our heads so I will continue with that year.

1. With BCV points only usable through 2042, that is 26 years of use. (2042 end date minus this year, 2016. So 2042 minus 2106=26)
2. So in essence, I am getting 5,200 points. (200 points each of the 26 years. So 200 x 26 = 5,200)
3. To figure out my lifetime cost per (purchase) point, I started with my purchase price of $21,000 and divided by allllll of the points I would be purchasing over the lifetime of the contract. So it is $21,000 divided by 5,200 points. The cost per point is then $4.04 per point at the time of purchase.
4. Then, I added in maintenance cost per point. This year it's $6.13 per point at BCV. So the total cost per point is the purchase price PLUS the maintenance cost per point. So it's $4.04 plus $6.13 totaling $10.17.
5. So if I went to BCV for a week in July and stayed in a studio, that's 134 points. And 134 points x $10.17 is a $1,362.78. So the cost of a week is actually $1,362.78.

That beats the cash price!

I also did the math for BLT since there are more years available at BLT and lower MF. Let's assume the same 200 points and $125 per purchase point. That's $25,000 purchase cost.

1. BLT points expire in 2060 so that's 44 years of use.
2. If I bought 200 points, that's a total of 8,800 points. (44 years and 200 points each year)
3. Dividing the purchase cost of $25,000 by 8,800 points is $2.84. So it's $2.84 per point.
4. MF is $5.05 per point for a total point cost of $7.89 ($2.84 + $5.05)
5. A week in July at a studio is between 123 and 174 points. So the cost is 123 x $7.89 is $970.47 up to $1372.86.

So, while seeing the math that BCV *was* more expensive than BLT, we love it there and the incremental cost didn't matter. But I was able to *know* and not just *feel*.

I also added to the spreadsheet the cost of that same room for the week and how much I would save. ($4,400 - $1,362.78 = $3,037.22). This is the math that may help Mr. Linzjane88!

I have this math in a spreadsheet and can share if you would like it. Just message me.

 

[miTnosnhoJ]

YOU OPENED THE DOOR TO GEEKY ANSWERS SO HERE IS MINE...

1) Why do people compare the value of the dollars spent towards DVC against the value of the same dollars put into a retirement fund or high-interest savings? Obviously, that's going to make DVC look like a terrible way to go but it's not realistic. If I don't buy DVC that doesn't mean I am going to take my vacation fund and cancel all vacations forever to invest. I am still going to spend X dollars per year, just on hotels. Am I missing something there?

You are correct that you should not view DVC as an investment, although you may get lucky and be able to sell at an attractive price. Also, you should have a good plan for retirement savings before even thinking about DVC. It sounds like you do.

Another reason people use these other options is that to do a discounted cashflow analysis, you need to calculate a discount rate. A quick and dirty discount rate is to use the amount you might get on your overall savings, because if the money you save exceeds that threshold, you know you have a good investment. From a finance geek point of view, this is not a meaningful discount rate for several reasons. For one, the discount rate for your savings is a rate for assets with considerable risk (e.g. the stock market), while the cash flows for DVC are not so risky. There is some risk that you will not use it as you planned, but even then, there is a contingency where you can sell. So the cash flows in a DVC analysis should be analyzed with a lower risk discount rate. The discount rate from your retirement savings does include inflation, so that it is important.

Having said that, we instinctively know that having money today is better than having the same amount of money in 20 years. So you need a discount rate of some amount. Note that normally, an investor will require a discount rate that covers 1) the risk free rate, plus 2) a risk premium, plus 3) inflation. So in your spreadsheet, you can use a discount rate that includes only 1 and 2, and then explicitly include inflation assumptions line by line, or, you can use a discount rate that includes 1) 2) and 3) and just include the nominal cash flows.

From a Finance point of view, I could argue that the whole premise of DVC is that Disney Corporate knows their internal discount rates very well, because they can measure them in the marketplace, and the customers do not understand theirs very well. Therefore, with uneven information, Disney can create an arbitrage. They can sell assets today to consumers who do not well understand the economics, but for Disney, they can understand the economics to a great degree of accuracy. To put it another way, Disney can go out in the markets and sell stock and issue bonds so that they can build new resorts. They can estimate the revenue flows from the park spending, hotels., restaurants, shopping, etc. from these resorts. So is it better to finance the resorts through selling stock and issuing bonds, or is it better to get the customers of the resorts to finance the resorts themselves. If a stockholder expects an 8% return, and a bondholder expects a 3% return, then the DVC purchasers might be happy with a 1% return as long as it breaks even at some point in their holding period.

2) Why factor in inflation into the cost of long term ownership? I understand that in 2040 the cost of a hotel room is going to be a gazillion dollars but the cost of MF's is going to have gone up as well and I assume I am going to be making considerably more as well. Can't I just leave those out of the equation for convenience?

The reason to factor in inflation is that the two cases we are interested in have very different cash flows.
If in one case, you have cash flows spread out over 50 years, and in the other case, you have similar but different cash flows spread out over 50 years, then ignoring inflation might be a good simplifying move.

But with DVC, one case (Luxury resorts as a hotel guest) involves paying a stream of cashflows over time, and the alternative case (Luxury resorts through time share ownership) involves paying a large lump sum today with a small (relatively speaking) stream of maintenance fees.

So now the discount rate and the inflation rate become critical assumptions that will drive the answer. So you will want to explore the sensitivity of changes to these parameters. If one case looks better, how much would the discount rate have to change to flip the answer? And how much would the inflation assumption have to change to flip the answer?

With a high discount rate, being a hotel guest will win, because you are paying for future visits with highly discounted future dollars. If there is a low discount rate, time share ownership will win. Also, the higher the inflation, the better the timeshare option becomes.

Backing away from the precipice of Geekdom...

DVC is a luxury purchase. You are really buying the opportunity to spend more money. And you are buying easy access to the Disney experience.
You get proximity to one of the happiest places on earth. You get the easy ability to get 1, 2, and 3 bedroom accommodations close in.

To me the key questions cannot be answered by the spreadsheet. You need to consider such things as
1) Will this hurt my standard of living? Conversely, will it help my standard of living through enjoyment, pleasure, family time, etc.?
2) Am I willing to commit a large portion of my vacation dollars to Disney, as opposed to foreign travel, cruises, domestic travel, beach time, skiing, etc.? Or are my personal circumstances such that I can do it all?
3) Am I a planner and have considerable control over my schedule? To get the most out of DVC, you have to really think ahead.
4) Will my needs change over time?

There are probably many other important issues to consider.
If you can afford it, the spreadsheet is interesting, but not a deal breaker either way.

 

[crisi]

.......

There are probably many other important issues to consider.
If you can afford it, the spreadsheet is interesting, but not a deal breaker either way.

And if you can't afford it, the spreadsheets and break even analysis can be dangerous and some people will use them to justify a poor decision - and depending on what assumptions you want to make, you can certainly make the numbers work in your favor. But your assumptions may end up being faulty and if you are on the edge of affording it, bad luck can make it a poor choice.

 

[Dean]

And if you can't afford it, the spreadsheets and break even analysis can be dangerous and some people will use them to justify a poor decision - and depending on what assumptions you want to make, you can certainly make the numbers work in your favor. But your assumptions may end up being faulty and if you are on the edge of affording it, bad luck can make it a poor choice.

For others benefit since I know you know this. Timeshares, like finance in general for the individual, is mostly psychology and only a small amount actual math. DVC rarely saves money in the long run even when the numbers suggest you will.

 

[linzjane88]

YOU OPENED THE DOOR TO GEEKY ANSWERS SO HERE IS MINE...


You are correct that you should not view DVC as an investment, although you may get lucky and be able to sell at an attractive price. Also, you should have a good plan for retirement savings before even thinking about DVC. It sounds like you do.

Another reason people use these other options is that to do a discounted cashflow analysis, you need to calculate a discount rate. A quick and dirty discount rate is to use the amount you might get on your overall savings, because if the money you save exceeds that threshold, you know you have a good investment. From a finance geek point of view, this is not a meaningful discount rate for several reasons. For one, the discount rate for your savings is a rate for assets with considerable risk (e.g. the stock market), while the cash flows for DVC are not so risky. There is some risk that you will not use it as you planned, but even then, there is a contingency where you can sell. So the cash flows in a DVC analysis should be analyzed with a lower risk discount rate. The discount rate from your retirement savings does include inflation, so that it is important.

Having said that, we instinctively know that having money today is better than having the same amount of money in 20 years. So you need a discount rate of some amount. Note that normally, an investor will require a discount rate that covers 1) the risk free rate, plus 2) a risk premium, plus 3) inflation. So in your spreadsheet, you can use a discount rate that includes only 1 and 2, and then explicitly include inflation assumptions line by line, or, you can use a discount rate that includes 1) 2) and 3) and just include the nominal cash flows.

From a Finance point of view, I could argue that the whole premise of DVC is that Disney Corporate knows their internal discount rates very well, because they can measure them in the marketplace, and the customers do not understand theirs very well. Therefore, with uneven information, Disney can create an arbitrage. They can sell assets today to consumers who do not well understand the economics, but for Disney, they can understand the economics to a great degree of accuracy. To put it another way, Disney can go out in the markets and sell stock and issue bonds so that they can build new resorts. They can estimate the revenue flows from the park spending, hotels., restaurants, shopping, etc. from these resorts. So is it better to finance the resorts through selling stock and issuing bonds, or is it better to get the customers of the resorts to finance the resorts themselves. If a stockholder expects an 8% return, and a bondholder expects a 3% return, then the DVC purchasers might be happy with a 1% return as long as it breaks even at some point in their holding period.



The reason to factor in inflation is that the two cases we are interested in have very different cash flows.
If in one case, you have cash flows spread out over 50 years, and in the other case, you have similar but different cash flows spread out over 50 years, then ignoring inflation might be a good simplifying move.

But with DVC, one case (Luxury resorts as a hotel guest) involves paying a stream of cashflows over time, and the alternative case (Luxury resorts through time share ownership) involves paying a large lump sum today with a small (relatively speaking) stream of maintenance fees.

So now the discount rate and the inflation rate become critical assumptions that will drive the answer. So you will want to explore the sensitivity of changes to these parameters. If one case looks better, how much would the discount rate have to change to flip the answer? And how much would the inflation assumption have to change to flip the answer?

With a high discount rate, being a hotel guest will win, because you are paying for future visits with highly discounted future dollars. If there is a low discount rate, time share ownership will win. Also, the higher the inflation, the better the timeshare option becomes.

Backing away from the precipice of Geekdom...

DVC is a luxury purchase. You are really buying the opportunity to spend more money. And you are buying easy access to the Disney experience.
You get proximity to one of the happiest places on earth. You get the easy ability to get 1, 2, and 3 bedroom accommodations close in.

To me the key questions cannot be answered by the spreadsheet. You need to consider such things as
1) Will this hurt my standard of living? Conversely, will it help my standard of living through enjoyment, pleasure, family time, etc.?
2) Am I willing to commit a large portion of my vacation dollars to Disney, as opposed to foreign travel, cruises, domestic travel, beach time, skiing, etc.? Or are my personal circumstances such that I can do it all?
3) Am I a planner and have considerable control over my schedule? To get the most out of DVC, you have to really think ahead.
4) Will my needs change over time?

There are probably many other important issues to consider.
If you can afford it, the spreadsheet is interesting, but not a deal breaker either way.

WOW! That was impressive. I think I got mostly all of it. Logically I know that a spreadsheet will not predict anything. Especially given how many variables there are with travel. From research it seem slike everyone buys with the intent of going and staying with the minimum amount of points and then transition the the villas over the years. But for some reason it is my crutch when making a big purchase. You should have seen my spreadsheet when I bought my car (9 years ago, LOL). I don't like parting with my hard earned dollars without having as many details as possible.

There definitely is a huge emotional aspect to this DVC purchase. We are just Disney lovers to the core. That is pretty much the only place we travel. We will occasionally travel to Pompano Beach to see family and just do a beach vacation but, really, when it is vacation time everyone knows where we are going . We like travel during the 1-2nd week of September because of the low crowds and then we usually work in a December or a spring trip depending on schedules. My extended family who we travel with are DVC owners as well (OKW). About 25% of our take-home pay falls into the 'discretionary income' category and we contribute to our retirement (after company match we are each at 13-14%) which I think is acceptable but then again those online retirement calculators can basically be made to say anything you want......hmmm....almost like a spreadsheet .

Mr. Linzjane88 politely declined my offer of showing him said spreadsheet. I really don't think it will be too difficult to sway, especially after our September trip. Convenience is king in his book so not having to deal with cars/parking/tram for one of our more frequently visited parks might be all he needs to see the light. I just would like to know why I decided to wait until retail prices were so high tp get to this point. Hopefully they won't go too crazy before we get in on the fun.

 

[linzjane88]

The first question is whether buying DVC makes sense, it seems it might in your situation. Then comes the question of home resort, contract size and UY. The other variable is will you vacation other places. A none DVC timeshare will do both FAR better than will DVC. One really has to fit these variables together like a jig saw puzzle to find what's best for a given person. Wyndham, Bluegreen, Marriott will all be MUCH cheaper than DVC short term and likely long term as well. Since savings and value seem to be a good portion of your needed approach, what you might look at is something like SSR or BLT which will be the best values for on property. SSR due to lower cost, standard view villas, and both lower and likely more controlled dues. BLT due to the lower dues and monorail access plus the standard view option.

We don't really travel elsewhere. I half looked into Wyndham Bonnet Creek (or other Wyndham locations) but it didn't make sense to me price wise. I have always gotten 2 bedroom villas at the Bonnet Creek for $90-125, even Christmas week. The amount of points that took seemed like a lot and the maintenance fees would be pretty close to that unless I missed something. I did read on another DVC board about how some use their other timeshare points through RCI to book Disney and do it much cheaper than what the same DVC points would cost. That sort of is above my head, but is that really a viable option?

 

[Dean]

We don't really travel elsewhere. I half looked into Wyndham Bonnet Creek (or other Wyndham locations) but it didn't make sense to me price wise. I have always gotten 2 bedroom villas at the Bonnet Creek for $90-125, even Christmas week. The amount of points that took seemed like a lot and the maintenance fees would be pretty close to that unless I missed something. I did read on another DVC board about how some use their other timeshare points through RCI to book Disney and do it much cheaper than what the same DVC points would cost. That sort of is above my head, but is that really a viable option?

I assume you looked retail, one should be able to buy Wyndham for a couple thousand $$$ or less to cover WBC and Wyndham has resorts in Pompano. As for exchanging, it can be viable but is a higher risk option. I own other timeshares and trade in routinely but I'm realistic and flexible. I wouldn't suggest it for a novice unless you went into it saying you're OK with WBC and then tried for an exchange as a replacement when you could get one. I actually prefer Marriott and Bluegreen as well Wyndham (and maybe better) for most situations like this but I won't clutter up the thread with why, anyone who wants details on why can contact me directly.

 

[cedricandsophie]

Wow. I'm always amazed at the financial thinking that some people put into buying dvc. Wish I was that astute. Our financial consultant has always just said buy what you love and will use. We have 1400 points at seven resorts and four use years, some resale and some direct. We slways pay cash. And we always use them or give to family and friends. Our kids will use them after we are gone and we should be able to leave them enough money to handle maintenance. We never use them on anything but the resorts and while we rarely borrow from year to year we do transfer points from one contract to another. We never stay in less than s one befroom and often two bedroom. We

 

[cedricandsophie]

Wow. I'm always amazed at the financial thinking that some people put into buying dvc. Wish I was that astute. Our financial consultant has always just said buy what you love and will use. We have 1400 points at seven resorts and four use years, some resale and some direct. We slways pay cash. And we always use them or give to family and friends. Our kids will use them after we are gone and we should be able to leave them enough money to handle maintenance. We never use them on anything but the resorts and while we rarely borrow from year to year we do transfer points from one contract to another. We never stay in less than s one befroom and often two bedroom. We

Pushed the send button too fast. I just wanted to say that for us Disney was totally an emotional buy. We are blessed we can afford it and that our family loves Disney too. Even though the maintenance fees go up every year we have never regretted it and as long as I feel we are getting our value back over time we never will.

 

[Popouri DVC]

Our daughter was 18 when we bought DVC. Although some of our trips were with our extended family, we've done many with just the two of us. Those are some of my favorite trips, especially now that we're older and interested in more than just rides.





Thanks!

We bought DVC a year and a half ago and we are in our forties. We also have no children; after taking Mom and my cousin this past year for Christmas, we decided that we like our DVC better for just us!

I know that your children are a big factor in this purchase, but you might just decide that it could last you and your husband far longer than you originally thought..

 

[zemra406]

Hi, I am in the process of purchasing BCV though resale. The contract is still in the 'verification' stage and have not yet been sent for ROFR, so I am keeping an eye on the ROFR thread too. While I wait, since you are on the fence, linzjane88, I will share the math I used to get comfortable with the purchase.

My kids and I love Yacht Club and BCV (we have actually only been to those 2 resorts!) so that was our first choice. I was put of by the exp date of 2042 at BCV too. My contract is for 200 points. And $105 per point. It's not a stripped contract so all 2016 points are intact. $21,000 total. For simplicity I am leaving out my closing costs. Also, the 2016 MF has already been paid, but I am leaving that out of the points calculation for simplicity. Also for simplicity, I am also leaving out that the expiration month is Jan and probably won't use the points in 2042. We seem to have 2042 stuck in our heads so I will continue with that year.

1. With BCV points only usable through 2042, that is 26 years of use. (2042 end date minus this year, 2016. So 2042 minus 2106=26)
2. So in essence, I am getting 5,200 points. (200 points each of the 26 years. So 200 x 26 = 5,200)
3. To figure out my lifetime cost per (purchase) point, I started with my purchase price of $21,000 and divided by allllll of the points I would be purchasing over the lifetime of the contract. So it is $21,000 divided by 5,200 points. The cost per point is then $4.04 per point at the time of purchase.
4. Then, I added in maintenance cost per point. This year it's $6.13 per point at BCV. So the total cost per point is the purchase price PLUS the maintenance cost per point. So it's $4.04 plus $6.13 totaling $10.17.
5. So if I went to BCV for a week in July and stayed in a studio, that's 134 points. And 134 points x $10.17 is a $1,362.78. So the cost of a week is actually $1,362.78.

That beats the cash price!

I also did the math for BLT since there are more years available at BLT and lower MF. Let's assume the same 200 points and $125 per purchase point. That's $25,000 purchase cost.

1. BLT points expire in 2060 so that's 44 years of use.
2. If I bought 200 points, that's a total of 8,800 points. (44 years and 200 points each year)
3. Dividing the purchase cost of $25,000 by 8,800 points is $2.84. So it's $2.84 per point.
4. MF is $5.05 per point for a total point cost of $7.89 ($2.84 + $5.05)
5. A week in July at a studio is between 123 and 174 points. So the cost is 123 x $7.89 is $970.47 up to $1372.86.

So, while seeing the math that BCV *was* more expensive than BLT, we love it there and the incremental cost didn't matter. But I was able to *know* and not just *feel*.

I also added to the spreadsheet the cost of that same room for the week and how much I would save. ($4,400 - $1,362.78 = $3,037.22). This is the math that may help Mr. Linzjane88!

I have this math in a spreadsheet and can share if you would like it. Just message me.

My math was almost identical to this. I just closed on my first BCV contract. I also liked the shorter expiration. A huge cost of ownership is the ongoing maintenance fees and I liked the shorter commitment. My kids are 4 and 1 and who knows what we will want in 25 years.

 

[nluvwithdisney]

We bought DVC a year and a half ago and we are in our forties. We also have no children; after taking Mom and my cousin this past year for Christmas, we decided that we like our DVC better for just us!

I know that your children are a big factor in this purchase, but you might just decide that it could last you and your husband far longer than you originally thought..

We are in that same situation (mid forties and no kids). We know we will get good use out of our purchase even if just the two of us are going without family or friends. Hopefully we pass ROFR. We are enjoying planning where we might go. Even if Disney is not planned some years we can rent the points and travel elsewhere. I think every one should take a step back if you think you are only buying for the kids. It is an adult destination as well.

 

[linzjane88]

Wow. I'm always amazed at the financial thinking that some people put into buying dvc. Wish I was that astute. Our financial consultant has always just said buy what you love and will use. We have 1400 points at seven resorts and four use years, some resale and some direct. We slways pay cash. And we always use them or give to family and friends. Our kids will use them after we are gone and we should be able to leave them enough money to handle maintenance. We never use them on anything but the resorts and while we rarely borrow from year to year we do transfer points from one contract to another. We never stay in less than s one befroom and often two bedroom. We

To be honest, I grew up in a household where money was always spent faster than it came in and money fights were a daily issue. I grew up knowing I never wanted to not know where my dollars were going and what I was getting for them, and I certainly didn't want to be financing frivolous purchases living paycheck to paycheck. I might get a little obsessive with over analyzing this stuff but it keeps me from making a financial decision I will regret.

Pushed the send button too fast. I just wanted to say that for us Disney was totally an emotional buy. We are blessed we can afford it and that our family loves Disney too. Even though the maintenance fees go up every year we have never regretted it and as long as I feel we are getting our value back over time we never will.

Definitely about 80% emotional buy here! In fact, both of my patients last night were watching Cinderella in the middle of the night. Just hearing the little Disney songs playing in the background made me all warm and fuzzy!

We bought DVC a year and a half ago and we are in our forties. We also have no children; after taking Mom and my cousin this past year for Christmas, we decided that we like our DVC better for just us!

I know that your children are a big factor in this purchase, but you might just decide that it could last you and your husband far longer than you originally thought..

I am looking forward to some husband-only vacation time! We have always looked at the benefits of having our kids young-- by the time they move out we will be older, wiser, richer, and have more vacation time to use from work . That's the plan anyway .
Also, I *may* have order the DVC DVD...you know, for some educational television for the Hubs...