My DH isn't convinced

[kathyg]

I think the idea of buying in is a good one. But, please, help me convince my DH. He thinks the whole thing is too "nebulous" As Director of Finance, he's always looking at the numbers. He wants to be assured that what he buys into today will at least have some predictabiltiy as far as price increases. Can't say that I blame him, but he has questions I can't answer. Like:

1. How do I know that if it costs me x number of points this year to stay at BCV. it won't cost me 2x points(or even more) to stay there next year (or down the road);

2. How do I know how much dues will increase over the span of time?

3. Are the deeds transferable?

4. What are my options if I don't want to go to Disney and how much extra will it cost me.

And, my favorite one....

4. What if Disney goes out of business.

I really want to do this, but need to give him answers to these questions. He doesn't trust the guides and equates them to car salesmen.

I need honest answers, please.

Thanks, kathy

 

[jel0511]

I'll give it a whirl.... DH is a VP in finance so I know where you're coming from:

1. Disney can't change the total amount of points it takes to book a particular room. They can reallocate the points, ie. it costs 30 points and 45 points during the summer for a one bedroom, they can raise/lower those amounts, but must reallocate another season accordingly. Basically, if you buy enough points for a week now, you'll have enough points for a week until 2042.

2. Dues historically have gone up around 2-3%, but they have also decreased a couple of times. Disney can't raise them anymore than 15% in one year though.

3. Yes, you're buying a real estate interest and you can transfer, sell, even will it to someone.

4. There are MANY other options, staying at any other DVC resort, a Disney resort, using the Concierge collection, DCL, the Adventure Collection and you can trade through II for timeshares around the world.

5. In reality, out of luck, but an unlikely event.

I hope this helped!!

 

[caverill]

Additional followup...

On Item 2 - Maintenance fees can be raised up to 15% but only for actually maintenance. They can't raise them to make more profit.

On Item 3 - There is a transfer fee when exchanging your points out of the system of $75. We have traded out once and it is very easy. Member Services does all the work.

 

[fkj2]

He wants to be assured that what he buys into today will at least have some predictabiltiy as far as price increases

Well, I think DVC over time has been cost effective if your family wants to stay at a better accommodation for a reasonable cost. Aside from that, has your husband looked at the action of the stock market lately?

There are no total guarantees in any investment but you can have some great vacations.

 

[Richyams]

When we bought eleven years ago, OKW dues were less than $2.20 per point. Today they are $3.17. I don't know what the average percentage increase was, but it is certainly under 5% annually.

If points go up on one room, they must go down on another. In eleven years there has been one adjustment, that was at OKW back around '96. Unless vacation patterns seriously change, I really don't expect another adjustment. No matter what, points can not go up on one room without going down on another.

If this thread doesn't work, I would suggest leaving him.

 

[jimmytammy]

Sounds like your DH is under a lot of stress so he needs to make sure to vacation a lot more! I had to do the convincing in my family to my DW. My advice, go for it before the pts. go up again. We looked into DVC 1 yr. ago, decided not to buy, then ended up buying in Jan. and glad we did. I could kick myself for not buying sooner. If you really, really like WDW you probably won't be dissapointed. The info. you got from posts above sounds accurate so I won't go into that. What I can tell you is I know some folks personally who have been in DVC since the beginning and they have absolutely no regrets. And we know a family who joined 3 yrs. ago and they have no regrets. This forum is very positive about DVC. I have not used any pts. yet and I am very excited about being a part of DVC. Hope everything works out for you like you want it too. Good Luck!!!!!!!

 

[Caskbill]

Since DH is a numbers person, you might throw some numbers like these around.

DVC originally sold for a little over $50/point. Today it's at $80/point. Some members who have sold there points (for whatever reasons) have actually made a profit. This is very unusual in the timeshare industry.

I had a chart at one time, but not now, but the only changes in the point structure was a one time adjustment at OKW about 6-years ago, and a recalibration of points at BWV when they went to a two tiered point system for "standard" rooms and "preferred" rooms. At OKW, they changed just a few points in some (not all) of the Disney seasons, mostly around 1 or 2 points/night. The largest change to my recollection was about 8 points/night to a Grand Villa at Christmas time (Premier season). Of course, as mentioned, if they raise points somewhere, they have to lower points somewhere else. Basically, the TOTAL number of points to rent all the villas for the entire year CANNOT change.

OKW dues have gone up about $1.00/point over the past 10 years. In Adventure season a 1-B/R there is 16 points/night weekdays. In Premier season it's 30 points/night weekdays. So based solely on dues, 10 years ago that OKW 1-B/R weekday stay was about $35/night. Today at about $3.20 in dues it's at about $51/night. During premier season, or weekends, the numbers of course are a little higher, (about double), but still maintain the same ratio. Of course the other resorts have a slightly higher point structure, but not much.

Meanwhile ask him to name any other first class hotel whose daily rates have gone up only $15 in 10 years. That's an average of only $1.50/night/year. (Someone once checked on some of the Disney hotels at WDW and found that over that same time frame rates went from about $60-$80 to $180 - $240 or so for the better hotels. And those are still just hotel rooms, not villas, like DVC. Don't forget that also a hotel at Disney (or anywhere in Florida) has an additional 11% room tax. There is no tax with DVC villas.

And, even though many on this board consider it a non-value way to use points, you can nevertheless 'spend' your points on any number of other options including standard Disney hotels, Disney cruise, Concierge collection of first class hotels around the world, Adventurer's collection of exciting trips, or exchange to any II (Interval International) resort you'd like (exchange fee required).

The biggest downside is probably the eventual expiration of the program in 2042. But if you compare on a spreadsheet (and many have already done this) 40 years of DVC vacations vs. 40 years of hotel vacations, then the break even point comes out in about 7 - 9 years. (depends a lot on financing etc.). After that there's 30 plus years of Disney vacations for just the cost of the dues.

 

[kathyg]

Wow, this board is the place to go when you need answers to questions.

I e-mailed the link to my DH this morning so that he could read the info you supplied. He e-mailed me back with "What does 'DH' mean?" Go figure.

Anyway, after pinning him down, he did agree that he felt better....I think he may be weakening a bit. He needs some more convincing though. I will keep after him.

Thanks again.

Kathy

 

[wdeversole]

Tell him the "D" in DH depends on his decision.

If he decides to buy, it means darling.
If he decides not to, it means divorced.

 

[erikthewise]

wdeversole: LOL! That says it all!

Actually getting a good answer from a spreadsheet is difficult to avoid; I went through this exercise too. That turns out to be the most straightforward issue to resolve.

If you're committed to a Disney vacation at at deluxe resort on an annual basis (perhaps an occasional year off), and plan to use your points at DVC resorts, in most scenarios you pay off your investment in 15 years or less, sometimes a lot less. I took into account historical increases in dues AND in rack rates at non-DVC resorts, but not the increase in the value of points nor the fact that you're likely getting better accommodations than otherwise.

Unless you waste points or use them extravagantly, you will almost certainly save enough on accommodations to both pay your annual dues and the interest on a typical home equity loan for the cost of membership, with a substantial amount left to apply against the principal.

Compared to buying an actual vacation home, DVC membership is inexpensive and much more flexible. The major issue IMO is commitment.

BTW Richyams, $2.20 to $3.17 in 11 years works out to annual increase of about 3.38%. I think annual increases at other resorts are likely to be less than that as the fees did not start so low as at OKW.

 

[FrozenPiglet]

My DH wasn't really excited about the idea either. A few things helped him say it was okay. First, realize that this is a "pre-paid vacation plan" not an investment plan. If he wants to put into a spreadsheet all of the money you are currently paying on vacations and your expected outlay for future vacations against the DVC amount it might help. Yes, he can choose his own discount rate and figure if it makes sense to him.

Also, DD and I took my husband along this past March and stayed in a 1br at OKW (rented points). He really doesn't like WDW, heat and crowds very much. He really liked OKW 1br though. His favorite part was the full kitchen. Then when we went into the parks and he saw how expensive food is, he realized the cost savings on food makes a big difference also (we usually eat most meals in the room). After that trip I had a much easier time convincing him. We purchased 200 pts. at BCV in May.

Another thing was that one time DD, nieces and I rented one of the vacation homes off-site for a week. DH decided maybe we should buy one of those instead of DVC. He changed his mind when he realized the liability, hassle and upkeep with those. Also re-selling those isn't easy from what we learned.

While we were at WDW DH was astounded at the crime in and around Orlando vicinity. He felt much safer having us at OKW than off-site locations. I know that is hard to financially figure into the equation, but it helped convince my DH since DD and I will be going by ourselves most of the time.

Good luck!

 

[PamOKW]

A minor correction, the dues for OKW this year aren't $3.17, they are $3.2163 per point.

If your husband would like to see a history of how they have managed the dues (comprised of maintenance, capital reserves and real estate taxes), I can give him some numbers.

In 1993, the dues were $2.5629. That's a $.58 or 23% increase over 9 years. In the early years, dues went up roughly 5% per year. However, in 1997 the dues were $3.1448. So, in the past 5 years we've seen an increase of $.07 or 2%. During that time dues have fluctuated up and down. The lowest point in the 5 year period was actually 2001, when dues were $3.1272. The highest, is the current year.

 

[Merilyn]

I also wanted to let you know about the trades to other places. It is very easy to trade. We have stayed in Washington, DC at the Jefferson. We have been to CA and stayed at the Marriott New Port Beach. We have stayed at the Plaza in NY. We are booked for next March at a Marriott on the beach at Hilton Head. We have also been to almost all the Disney locations- Hilton Head, Vero Beach, and several of the places at WDW. We have both ours kids on the contract so they are members also and we don't have to leave it to them. It is a great idea and I wouldn't trade our time there for anything. It is a great way for the family to get together and have quality time. My children are grown and out on their own and even they look forward to our disney trips.

 

[BillM]

I can recall several years ago that a potential member crunched all the numbers and said something like this.....I can take the initial investment and invest in the stock market and get a 12% a year return....
I wonder how their portfolio is doing now.
Meanwhile I've got my points bought and paid for and 40 more years of vacations for DW and myself, kids and grandkids and even those GGgrandkids down the road.
Best deal I ever made.