Monthly Fees vs. Cost of OOP Room

[alice99]

The 2nd biggest problem is having rental rates increase at the same rate as MF. Historically this has not happened.

So you have an asset with a diminishing value and probably a shrinking rate of return. At what point does it no longer become such a good deal?

Anyone that wants/plans to do something like this had better look at what MF increases vrs rental rates increases are going to be as this can make some serious differences in the numbers.

Compounding is great when it is working for you, but a really ***** when it is working against you.

Yes, I have been thinking about this myself. I haven't seen any change in the rental rates since I've been a DVC owner..... yet, my maintenance fees continue to rise.
When I rent through David's I receive 10$ per point, but my true cost per point is about 8.50. I'm not going to be breaking even for much longer if rental rates don't go up soon.

 

[chalee94]

Alot of other factors for long term, but renting will be here to stay for awhile and the spread (MF compared to rent/) will stay fairly steady.

this is a strange assumption as it hasn't been true historically. rental rates have been fairly constant over the last 10-12 years while maintenance fees have gone up 50% or so. as some have stated, there are more owners with more pts to rent now...not sure demand for renting those pts has gone up an equal amount...

there might be other timeshares that it makes sense to buy to rent, but i wouldn't recommend buying DVC to rent as the returns don't justify the risk IMO.

 

[bakerworld]

Not sure why no $$ value is placed on ownership - because of the MF?

If you own a car, isn't the depreciating value a $$ amount? When is the use of the car/DVC considered 'free'?

 

[ELMC]

Not sure why no $$ value is placed on ownership - because of the MF?

If you own a car, isn't the depreciating value a $$ amount? When is the use of the car/DVC considered 'free'?

The thinking that people operate under is that your DVC contract will eventually be worth $0 (because it expires). Add to that the fact that the value of a DVC contract is in it's use, which directly conflicts with the fact that in order to get any cash value you would need to sell the contract. (Put aside renting for the moment). So it's very difficult to place a value on the contract as a whole because if you are using it you can't get $ for it and if you get $ for it you can't use it.

Also, it's very difficult to get a job without experience, but you can't get experience without a job.

 

[disneynutz]

Also, it's very difficult to get a job without experience, but you can't get experience without a job.

Isn't that a line from the movie; "The Secret Of My Success" with Michael J. Fox?

Bill

 

[cookpr]

Well, I think we can all assume those thinking DVC is an investment instrument to be exploited for consistent gains will be the people we see selling contracts for pennies on the dollar down the road.

I don't own simply because the numbers never work in my calculations. Those MFs always kill the financials for me, compounded with an attractive rental market out there where I can get all the benefits of DVC with no commitment.

Simply put, Disney continues to expand DVC at a fast pace because it is great for their bottom line...not the consumer.

I think too many people get caught up in the fantasy. Separate the emotion....DVC is likely only a good fit for a very small group of people.