Monthly Fees vs. Cost of OOP Room

[wallygirl]

Trying to breakdown true savings of DVC before we buy. We are once per year, prefer Deluxe kind of people (although Poly is our favorite). Does the annual MF negate the value of buying resale (probably about 160 points at AKL)? Seems that the DVC resale is worth it but then when you look at the MF per year those alone are almost what one pays for a room with a discount or a promotional rate. So please tell me how DVC resale with MF is better than waiting for promos/discounts? What's the advantage then to DVC? Thanks in advance!

 

[WsPrincess]

For us it is not really about saving but it is about getting more for our money. What we paid in resale and the MF for our points are going to let us stay in a 1 bedroom or 2 bedroom villa which gives us more room for our family (we were getting tired of being in 1 room) and it gives us a washer/dryer and a kitchen. So for us it is the extra space and extra things in the villa that have the most value for us.

 

[AlwaysDreamofDisney]

Is it just you and spouse traveling? If so OOP may be the way for you to go.

We are a family of 5 so 1 room at the deluxe resorts no longer worked for us. Comparing the cost of 2 deluxe rooms to the cost of MF is a larger difference! Also, keep in mind that once you become a DVC member you tend to want to visit more often! Since becoming a member in June of 2010 we have visited for extended stays 4 times. Each trip was at least 7 days or more in length.

 

[chalee94]

We are once per year, prefer Deluxe kind of people (although Poly is our favorite). Does the annual MF negate the value of buying resale (probably about 160 points at AKL)?

160 pts gets you about 8 nights in the summer in a sav view studio at AKL. annual dues on 160 AKV pts = $870 for 2012.

if you can stay at a deluxe at disney for 8 nights for about $110 per night (tax included) on discounted cash stays, then yes, that is a much better option than DVC. (for a more realistic picture, you'd need to factor in the upfront cost for DVC.)

but as the other poster said, for many, it's about having more space than saving money...

 

[BrerNashville]

Don't forget to add in the cost of sales taxes and occupancy taxes which typically account for about 15% or so of your OOP room costs. There are no such taxes when staying on points.

 

[Sandisw]

For us, it was more about getting larger rooms for the same price as what we were paying for discounted stays at the CR and not having to wait and count on pin codes or specials.

So, when we bought BLT, that is what we did. And, we realized we could go for our typical 5 night summer trip in a 1 bedroom for about the same cost as our CR tower room with a 30% discount.

Now we own DVC, we no longer have to wait and hope for discounts, and enjoy having our washer/dryer, jacuzzi tub, etc. that we get in the 1 and 2 bedrooms.

Of course, since we bought in 2009, we have added on more points at BWV and visit WDW more, so even though the MF's are now about the same as our room costs from a few years ago, we are getting even more trips in and more nights at WDW so can't say we have savings, but our vacations are definitely enriched!!!

Good luck!!!

 

[DougEMG]

Trying to breakdown true savings of DVC before we buy. We are once per year, prefer Deluxe kind of people (although Poly is our favorite). Does the annual MF negate the value of buying resale (probably about 160 points at AKL)? Seems that the DVC resale is worth it but then when you look at the MF per year those alone are almost what one pays for a room with a discount or a promotional rate. So please tell me how DVC resale with MF is better than waiting for promos/discounts? What's the advantage then to DVC? Thanks in advance!

If the annual MF are close to what you are paying for your deluxe room, then don't buy DVC.

I must admit though that I'm surprised that the discount on a deluxe room is making it as cheap as the MF on a similar DVC room. Anytime I've looked at the numbers the DVC discount works out to be 60% or higher off rack rates of a deluxe room.

Are you actually comparing a hotel room to a DVC studio, or are you comparing a hotel room to a DVC 1 bedroom. If the latter, then while the price is probably similar, there is a big difference in what you are getting. With DVC you can either same money staying in the equivalent room you use to pay cash for or you can upgrade your accomodations to 1/2/3 bedrooms, but it is your choice.

 

[Rob S.]

Does the annual MF negate the value of buying resale

Just to clarify, you pay MF on all points whether purchased direct or resale. The savings in resale is the upfront price per point.

 

[JimMIA]

Does the annual MF negate the value of buying resale (probably about 160 points at AKL)?

MF's have nothing to do with how you purchase. If you purchase resale, your initial outlay will be 10%-50% less than if you buy direct. Once you are an owner, the MF's are the same, no matter how you buy.

The resale/direct question is a consideration concerning how you get in.

The annual "dues" is the much greater question, and the most important thing you should understand is not what the annual dues are for your preferred resort. The most important thing to understand is that the "dues" commitment is for 30-50 YEARS, depending on resort.

That's longer than your home mortgage. If you want to seriously think about the math of DVC -- think about that. DVC is a very longterm financial committment.

Seems that the DVC resale is worth it but then when you look at the MF per year those alone are almost what one pays for a room with a discount or a promotional rate. So please tell me how DVC resale with MF is better than waiting for promos/discounts? What's the advantage then to DVC?

I haven't run the numbers, because to be honest, I am extremely skeptical of formulas and calculations designed to show that DVC saves an owner money. Most of those economic contortions are based on such crazy assumptions that I don't bother to read them.

I can tell you this, as a member for over 6 years whose 3 families have taken 29 DVC trips to various resorts -- it has NOT saved us money. It has increased the amount of money we paid to Disney. We have enjoyed every trip -- but it has not saved us money.

We bought DVC because we recognized it as a luxury purchase we would enjoy and could afford. If I had needed to justify it financially, I never would have purchased.

 

[KAT4DISNEY]

Trying to breakdown true savings of DVC before we buy. We are once per year, prefer Deluxe kind of people (although Poly is our favorite). Does the annual MF negate the value of buying resale (probably about 160 points at AKL)? Seems that the DVC resale is worth it but then when you look at the MF per year those alone are almost what one pays for a room with a discount or a promotional rate. So please tell me how DVC resale with MF is better than waiting for promos/discounts? What's the advantage then to DVC? Thanks in advance!

Discounted Poly compared to DVC studio for the same length of stay? Are you positive you compared the correct numbers? I've been at the CR on convention rate - which was lower than thru CRO at the same time with an AP discount, and is a lower rate than the Poly and it still made me squirm to pay more than my DVC.

 

[Lambekel]

MF's have nothing to do with how you purchase. If you purchase resale, your initial outlay will be 10%-50% less than if you buy direct. Once you are an owner, the MF's are the same, no matter how you buy.

The resale/direct question is a consideration concerning how you get in.

The annual "dues" is the much greater question, and the most important thing you should understand is not what the annual dues are for your preferred resort. The most important thing to understand is that the "dues" commitment is for 30-50 YEARS, depending on resort.

That's longer than your home mortgage. If you want to seriously think about the math of DVC -- think about that. DVC is a very longterm financial committment.I haven't run the numbers, because to be honest, I am extremely skeptical of formulas and calculations designed to show that DVC saves an owner money. Most of those economic contortions are based on such crazy assumptions that I don't bother to read them.

I can tell you this, as a member for over 6 years whose 3 families have taken 29 DVC trips to various resorts -- it has NOT saved us money. It has increased the amount of money we paid to Disney. We have enjoyed every trip -- but it has not saved us money.

We bought DVC because we recognized it as a luxury purchase we would enjoy and could afford. If I had needed to justify it financially, I never would have purchased.

What about 20 years from now when the price per room OOP has inflated but the points haven't?

 

[Missyrose]

What about 20 years from now when the price per room OOP has inflated but the points haven't?

Your MFs will be plenty inflated by then.

 

[Lambekel]

Your MFs will be plenty inflated by then.

Have they inflated proportionally historically? I highly doubt it, but maybe I'm wrong. Maybe someone can find this data. I'm not tech savy enough to do so.

 

[rlmas]

We have owned since late 2005 and have taken 8 dvc trips consisting of dvc, concierge and Disney collection. I have kept track of initial purchase plus dues plus imputed interest costs for lost savings as we paid cash for ours less actual booking cost of the accommodations we stayed in each time. After about 6 to 7 years the value of the lodging offset all costs, including the upfront purchase. This year we stayed at vero and sir. The rooms cost us 100 points for a studio at ssr and an ocean view inn room at vero. Dues on the 100 points were about $500 divided by 6 nights for an average cost per night of $83. These rooms cost way more then that. Their cost will go up much faster than the dues so the savings only gets better with time. I agree with some posters that you will not necessarily save money overall because you may go longer and spend more elsewhere since the room is covered. I looked at dvc as a way to ensure Disney trips for me, my kids, their kids and maybe their grandkids. It is as much about desire and emotion as it is dollars, but it works well both ways. If you can afford, do it. Dont over think it. Good Luck!!

 

[Missyrose]

Have they inflated proportionally historically? I highly doubt it, but maybe I'm wrong. Maybe someone can find this data. I'm not tech savy enough to do so.

Here are some projections a Diser did on MFs.

 

[rlmas]

The projections should also include cost of accomdations to compare. In the base year such as the one I used above, the dues were $83 and the rooms were over $300. Applying the appropriate percentages, it seems impossible that the dues will ever catch the actual costs. JMHO.

 

[ELMC]

The projections should also include cost of accomdations to compare. In the base year such as the one I used above, the dues were $83 and the rooms were over $300. Applying the appropriate percentages, it seems impossible that the dues will ever catch the actual costs. JMHO.

The dues shouldn't catch the cost of booking a room for cash. If they were equal, it wouldn't make much sense to pay $25,000ish up front to use points for something that could be bought with an equal amount of cash with no annual commitment. Why do you think so many other timeshares end up on eBay for a dollar?

That being said, dues increases are essentially guaranteed and they are exponential, so it will be interesting to see what happens ten or twenty years into the future.

 

[rlmas]

That was my point exactly that they will never catch up. I think it will be equally interesting to see what cash rates do 10 or 20 years in the future as well. When I was a child in the early to mid 1970s, we stayed as a family at the Contemporary. It was a MK view tower room for less than $100/ night. Now those rooms go for $800 in the summer.

 

[JimMIA]

What about 20 years from now when the price per room OOP has inflated but the points haven't?

First of all, the reality is that very, very few of us will still own DVC in 20 years. Which means we'll have to unwind our holdings and that's not going to be a pretty picture for everyone.

Second, the comparison to Disney hotel rates (even at a discount) is a bogus comparison unless you really would pay those prices. It assumes there are no other lodging options in the Orlando area, and we all know nothing could be farther from the truth. Comparing to Disney hotel rates is a sucker bet suitable for timeshare salesmen, not serious discussion.

And third, MF's and hotel rates will both increase. Will one increase faster than the other? Who knows? So does that mean we should assume DVC MF's will increase less? You know what happens when we ASSume.

 

[JimMIA]

When I was a child in the early to mid 1970s, we stayed as a family at the Contemporary. It was a MK view tower room for less than $100/ night. Now those rooms go for $800 in the summer.

This is exactly the kind of comparison I'm talking about. Unless you would actually pay $800 per night for that room, this is an absolutely meaningless exercise.