Math question?

[Stateman]

If you are trying to justify the math on a BCV purchase, it is hard to do. However, only you can decide if it is worth it. If being a BCV owner brings you that much happiness, then buy it. Not every decision needs to be financial.

I think this is the best way to think about it - a prepaid vacation that is very hard to justify as a purely financial decision.

We are DVC owners at Poly (hoping the new build is part of the same association!) so am fully on board with DVC, but it isn't really a financial decision.

And as someone mentioned above, a very impactful factor commonly left out of these calcs is the opportunity cost of your upfront investment. Your initial investment is nearly $21K. You will be losing out on a significant annual return that would have been achieved with that $21K over the next 20 years. That should be taken into consideration if you really want to do a full financial assessment. Obviously finances matter, or at least they matter to me, but don't think they need to be the overriding consideration for DVC assuming it is within the buyer's budget and fits their intended use case.

 

[Bjaiken77]

It’s just the 19-20 years vs an alternative. It also depends on how much you like a particular resort, how long you want to be there, and how unhappy you will be if you are not there. I have booked Beach Club one bedrooms for 3 nights a couple times. I have a trip coming up in October where we are staying there. I use the SSR SAP approach. We’re happy with other resorts, too, and don’t mind a split stay (in fact, actually like them).

 

[defrogger]

Your Math is correct, but there can be different perspectives on things. I tend to look at the DVC resorts with 20 years have bad long term value compared to say Grand Floridian with 42 years left.
So if you want a 20 year resort like Beach club you definitely need to want to stay there a majority of the time. I bought Boardwalk so i get it.

So how i did the math from reading all the info here (ty disboards)
Beach Club at $172 per point for 121 points is $20812, with closing costs probably around $21600. With roughly 20 years left of points thats $21600 \20 = $1080 for each years of points and then the cost of dues. Break it down per point just divide by 121 points so $8.93/p each year + dues per point @$7.54 = $16.46 per point

Now look at something like Grand Floridian direct at 150 points (because they make you buy 150 first time), Not sure what the promotions are but non discounted price is $207/p. So 150 * $207 = $31050 + closing costs probably around $31850. But Grand has 42 years left on contract. So $759 per year then divide by 150 points $5.06/p per year, with Dues at $7.01 you get your point cost at $12.07

So better point cost. But then you have to look at how many points per room as some resorts have hight and lower points for a week, so lets say a week
Studio at Beach Club in the summer - 116 points at $16.46/p = $1910 for the week
Studio Standard at Grand in the summer - 132 points at $12.07 = $1594 for the week

So a week at the grand is less. But you had to pay more upfront to get Grand.
Then lets say you use your points at Saratoga, studio in the summer is 102 points
With Beach Club points the room costs - $1679 for the week
With Grand Points the room costs - $1232 for the week

This is why buying at Beach club, you want to make sure your using it to stay at Beach club for maybe 75% of the time, otherwise you would of been better off buying what they call Sleep around points, (cheaper points)

Not sure what the current math is, but Saratoga, Poly, Bay Lake and Copper Creek were the better ones for Sleep around points. Talking resale not direct.

But you will have a hard time getting Beach club with sleep around points, hence needing to own at Beach Club to get rooms there. Unless your planning on one bedroom stays, those you can get rooms at Beach club here and there.

In the end you math is right though, if you were going to pay for a room at Beach club cash anyway, then you are saving allot of money per trip getting DVC.

Side notes, simple math, not taking into account inflation, dues increases and if you have interest from a loan for the DVC Purchase

 

[4nation]

Defrogger you are the winner! That is exactly what I was looking for my math calculation! Now I just have to decide if the math matters. We just recently drank the koolaid to staying on site and now I want to buy DVC. Having the funds isn't the issue, but I don't want to overspend and want to think how will we vacation in a few years when we retire.

 

[defrogger]

Its a slippery slope though, I bought Boardwalk, then added on at Bay lake and now Grand. I went from saying im going to stay in Standard Studios only to getting a bunch more points so i have the option of 1 Bedrooms.

Funny thing is, on disboards everyone warns you about add-on-itis, I said nope Boardwalk is enough, got enough for studios, but now here i am with more points

 

[Bjaiken77]

Defrogger you are the winner! That is exactly what I was looking for my math calculation! Now I just have to decide if the math matters. We just recently drank the koolaid to staying on site and now I want to buy DVC. Having the funds isn't the issue, but I don't want to overspend and want to think how will we vacation in a few years when we retire.

Thinking about how you will vacation relative to the dollars spent is the key. Different options within DVC make sense to different people based on their preferences, finances, length of time desired, and other expectations.

 

[RoseGold]

Defrogger you are the winner! That is exactly what I was looking for my math calculation! Now I just have to decide if the math matters. We just recently drank the koolaid to staying on site and now I want to buy DVC. Having the funds isn't the issue, but I don't want to overspend and want to think how will we vacation in a few years when we retire.

I found this chart helpful for this discussion:
https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-fall-2021/

It's worth noting that a loaded contract on any of the top few can completely flip the math, because you don't pay dues on those points. I'd consider any of the tops ones to be mathematically equivalent, you have to decide what you value in your SAP.

 

[Brian Noble]

Trying to see if my math is correct for an example in my spreadsheet.

I don't think it is correct to spread the purchase price evenly over 20 years, without considering the opportunity cost of the fact that you have to spend it all up front.

To see why, ask yourself if you'd be willing to loan me $1,000, and have me pay you back $50/year for 20 years. If the answer is "no", then you also shouldn't just divide the purchase price by the number of years.

If the answer is "yes", I'd like to borrow $1,000 for 20 years. I'll pay you back.

 

[sethschroeder]

The problem being that the majority of the cost of DVC (ie. the yearly dues), rises with inflation as well.

Eh not really

Most of the cost is Disney profit.

For simple math:
Oct 7 Night Studio
Cash OKW - $3,955.53
Cash SSR - $3, 936.39
Points RIV - 130 at $8.38 ($1089)

I used RIV because point charts and MFs are "high".

Over time the initial cost is absorbed in to the every increasing profit Disney charges on its room. The main benefit is locking in the profit at current market rates.

Yes it's "majority" in what a DVC member spends but if you pay cash the majority will be to Disney profit.