My head is swimming

[JackThePumpkinKing]

Sorry for the very Noob questions, however, I am thinking about joining the DVC and wanted to get some opinions from people who are actually DVC members.

1) What is the best way for me to be sure that it makes sense for me (financially) to join the club. Right now, I tend to go to Disney once every two or three years (Usually 7-9 days) with my wife and two kids. We usually stay in a Moderate Resort.

2) I built this financial model which calculated the cost of the annual dues for 175 points. It assumed a 4% annual increase in dues. (Is 4% about right?) It got really scary out in the far years (25 or 30 years out) where the annual dues started running $3000 and $4000 a year.

3) Not that I really would want to do it, but how easy is it to sell a DVC membership if I had to. I have seen some of the sites (Most noteably TheTimeshareStore), are these places reputable? What is the best place to sell (or even buy) memberships outside of Disney?

4) Can I actually think about a DVC membership as an investment? (Can I actually expect it to hold -not increase- in value so that if it ever had to be sold, I would not take a bath?

5) God forbid I could not pay the annual dues, what exactly happens? Do I get no points? Do I default on some sort of contract?

Money isn't an issue, but a 40 year contract for an annual $1000 - $5000 mandatory payment is a bit scary given the economy and job environment. Again, sorry for all the questions, but I wanted to get the opinions of people who are doing it today.

Thanks in advance for your help.

Jack

 

[tjkraz]

Originally posted by JackThePumpkinKing
Sorry for the very Noob questions, however, I am thinking about joining the DVC and wanted to get some opinions from people who are actually DVC members.

1) What is the best way for me to be sure that it makes sense for me (financially) to join the club. Right now, I tend to go to Disney once every two or three years (Usually 7-9 days) with my wife and two kids. We usually stay in a Moderate Resort.

This is probably the hardest of your questions to answer. The lowest-class DVC rooms are the Studios. The most direct comparison is a WDW Deluxe room. So any DVC room is going to be an upgrade over what you are getting at a Moderate.

I would take a look at the Rack Rates for the type of accommodation you are used to, and compare to the Rack Rate for the DVC room you have targeted. Subtract the annual dues and that would leave you with your DVC "Savings", if you well. Take this number and figure out how many years it will take for the initial investment to pay for itself.

In the end, realize that the room you are getting is much better than a moderate. Think about other ways in which you can save. If you're planning on a DVC 1 or 2 bedroom, assign some value to the full kitchen which can help you save BIG bucks on meals and snacks. Even if you don't want to cook full blown meals, you've got pleanty of room for breakfast food (cereal, milk, frozen waffles, pop-tarts, etc.) and snacks (bottled water and soda, ice cream, cookies, chips, veggies, etc.)

2) I built this financial model which calculated the cost of the annual dues for 175 points. It assumed a 4% annual increase in dues. (Is 4% about right?) It got really scary out in the far years (25 or 30 years out) where the annual dues started running $3000 and $4000 a year.

And what do you think WDW resort "Rack Rates" will do over the same period of time???

'nuff said.

3) Not that I really would want to do it, but how easy is it to sell a DVC membership if I had to. I have seen some of the sites (Most noteably TheTimeshareStore), are these places reputable? What is the best place to sell (or even buy) memberships outside of Disney?

There is a budding market for resales. This forum is sponsored by The Timeshare Store, and there are many other reputable agents.

4) Can I actually think about a DVC membership as an investment? (Can I actually expect it to hold -not increase- in value so that if it ever had to be sold, I would not take a bath?

Well, yes and no. Realistically, as long as DVC continues to exercise Right of First Refusal at reasonable levels, resales will keep substantial value. Others will argue that even without ROFR the demand for DVC will keep prices up there.

But over the long haul, it's hard to really determine what will happen. If you buy now at $89 or so per point, you're probably not going to get more than $72-74 selling, and commission would come off of that.

In the short term, you can probably count on the status quo (DVC ROFR and consumer demand) to continue. But there's no way to tell how a radical event (like the sale of DVC or even TWDC itself) might impact the program's value.

Many people use the term "Prepaid Vacation" rather than "Investment" when referring to DVC. The only guarantee is that you will be able to use your points for the contract duration (38 or 50 years) to vacation on DVC property.

5) God forbid I could not pay the annual dues, what exactly happens? Do I get no points? Do I default on some sort of contract?

Technically the points would revert back to DVC after some foreclosure proceeding.

Realistically you could "rent" your DVC points if you cannot use them. In today's marketplace, there is a market for rented points at about $10 each. With dues running in the $3.50 to 4.50 range, you can easily cover your dues and have a few dollars to put in your pocket.

 

[JackThePumpkinKing]

Thanks for the quick response. . . I am really interested in getting people opinions who are in the club, so your advice is invaluable.

A couple of questions that got sparked by your response. . .

Originally posted by tjkraz
Technically the points would revert back to DVC after some foreclosure proceeding.

So I would still keep the deed to the property (since I purchased it, but then the points would revert? Or would my inability to pay the maintenance fees mean I would forfeit the actual property itself?

(I know I may be a worry-wort, however, my fear is that today, the investment and the maintenance fee is not a problem, my fear is with the economy the way it is, what would happen in a "worst-case-scenario")

Realistically you could "rent" your DVC points if you cannot use them. In today's marketplace, there is a market for rented points at about $10 each. With dues running in the $3.50 to 4.50 range, you can easily cover your dues and have a few dollars to put in your pocket. [/B]

1) Is there a site for renting points? Does this get done on The Timeshare Store as well?

2) What legal responsibility do I have for tennants who rent my points? Do I need to draft a contract for the rental? What happens if my renters trash the place? I am assuming that Disney's insurance covers any insurance for my renters so that I do not have to worry about a lawsuit if they trip and fall, etc?

 

[dianeschlicht]

2) I built this financial model which calculated the cost of the annual dues for 175 points. It assumed a 4% annual increase in dues. (Is 4% about right?) It got really scary out in the far years (25 or 30 years out) where the annual dues started running $3000 and $4000 a year.

Historically, maintenance fees have not gone up anywhere near that much each year, and sometimes have actually gone down. I can almost guarantee that dues are ALWAYS going to be much cheaper than paying for a ressie at a WDW hotel!

 

[HookdonWDW]

Originally posted by JackThePumpkinKing
1) Is there a site for renting points? Does this get done on The Timeshare Store as well?

2) What legal responsibility do I have for tennants who rent my points? Do I need to draft a contract for the rental? What happens if my renters trash the place? I am assuming that Disney's insurance covers any insurance for my renters so that I do not have to worry about a lawsuit if they trip and fall, etc?

1) There is a site right here on these boards : Rent/Trade Board

2) You are legally responsible for whatever damage your renters may do, although there have not been reports of renters trashing rooms. Having a contract for rentals is a good idea. I'm not a lawyer, but I do believe that Disney would be responsible for injury lawsuits, since they would be responsible if the same things were to befall you during a stay. Here is a link to some sample rental agreements: Sample Contracts

 

[JackThePumpkinKing]

Thanks so much for your answers. . . any other opinions/advice would be most welcome.

Jack

 

[JackThePumpkinKing]

One other question I had. Lets say I have some point number (for arguements sake, 150 pts). Lets say that on a one week vaction (which costs 146 points) I would like to stay an extra day (lets say at a 12) point cost.

1) Must I borrow the extra 6 points, or do I have the option of paying cash for the extra day?

2) If I know I want to have enough for a 7 day trip each year, do I need to find a 156 point contract (I'm thinking about looking at a BWV home if I can find it), or should can I pay cash for the extra day each year?

Sorry for all the questions.

Jack

 

[tjkraz]

You could pay cash for a day and have it linked to the rest of your stay on points. Some people do this with weekends becuase the point costs are so much higher. Other people will arrive at WDW on a Saturday afternoon / night and stay at an off-site resort (or WDW Value Resort) before moving to their DVC room on Sunday.

You could very well borrow a handful of points from the next year.

You could also rent points (typically at $10 each) from a DVC member and have them transferred to your account.

There really are quite a few options.

Most of all I would suggest considering the real reason for not just buying all of the points you need for the stay you want. If the reasoning is you'd rather pay cash on the weekends, then I think that makes some sense. With most other reasons, you're probably better off just buying the points up front. If you don't, you'll end up regreting it later when costs have risen.

And remember if you ever want to add on to your contract (permanently buy additional points) you have to get a minimum of 25 points per transaction or 50 points if you intend on financing through DVC.

 

[ripleysmom]

Just something to give you perspective on the savings Jack.

We stayed in a 2BR Villa at the Wilderness Lodge over President's Week. While we were there we were talking to a woman on the elevator about how nice it was to have the extra room to spread out. We mentioned that we belonged to DVC and that we were happy with the purchase. She asked about that and told us that she was paying over $900/night for a 2 BR. We told her that $900 was about 1 yrs worth of dues for us (we have 225 pts at BWV) and that it had cost almost 2 yrs worth of points. A stay that normally would have cost well over $7,200 only cost us about $1,800 (excluding the buy-in). The savings on that one stay paid for over 1/3 of our initial buy-in.

You can always stay cheaper at Disney if that is your preference but you cannot stay in any better accommodations on property especially when you get into the 1 and 2 BR units. DVC allows those accommodations to be affordable for families.

 

[DebbieB]

Originally posted by JackThePumpkinKing
One other question I had. Lets say I have some point number (for arguements sake, 150 pts). Lets say that on a one week vaction (which costs 146 points) I would like to stay an extra day (lets say at a 12) point cost.

1) Must I borrow the extra 6 points, or do I have the option of paying cash for the extra day?

2) If I know I want to have enough for a 7 day trip each year, do I need to find a 156 point contract (I'm thinking about looking at a BWV home if I can find it), or should can I pay cash for the extra day each year?

Sorry for all the questions. Jack

I have 250 points but the stays I want are adding up to about 300 points a year. I don't want to commit to an extra 50 points so I pay cash for one weekend night on my OKW trip in May. It's easy to get a cash 1 bedroom then (first or second week). I just got an AP rate for $301 incl tax. It would have been 48 points so it comes to about $6.27 per point, about a $2 per point surcharge over the dues I would have paid on extra points, not taking into considering the initial purchase price on those points. Works for me right now.

 

[MikeBW]

ripleysmom,

I heard something when we were checking into the AKL during President's week that still has me in disbelief. The family in front of us was asking about a bigger room for their stay and the clerk searched the rooms and said we have a 2 bedroom suite for $1300 per night. The husband looked at the wife and said, "Well, this is the only vacation that we will take this year". And they booked 6 nights ($7800!!!) The 65-70 points for our 2 night stay at AKL looked like the bargain of the century.

 

[Pa@okw95]

When I joined back in 95 DVC was never considered a savings nor was it touted as such. Now it is being sold as a savings! It is one big expense! Nothing more. Let me give you real life example of what I mean by expense and someone may call a savings. OK_ My wife and I were at our favorite maul the other day and she stopped into one of her favorite women's clothing stores. She bought an outfit that cost about $190.00, walking out she told me she just saved about $140 on a $190.00 outfit. Now did she save money???There are different ways to look at this, if you take the alleged retail top price of about $330 like she does and subtracts what she paid $190, she claims to have saved $140. When I got the a bill the other day I paid $190.00 that was an expense not a savings. Now you can tell yourself using whatever figures you want to that DVC is a savings, but trust me it is an expense. If it is an expense that you can afford then by all means do it, but please don't up with a figure at least to me saying it is a savings. What you get when you join is a bunch of points that you are leasing and paying for in advance to use at DVC. the accomodations are superior to anything WDW has to offer, I stayed in a room at GF that ran me $650 a night and it was nothing like the rooms they have at DVC, DVC was much better. So if you can afford it go for it, but keep in mind it is an expense not an investment. Please do not be like my wife and try to tell me that you just saved money by buying into DVC.

 

[crisi]

I have to agree with Pa....

I'm sure it is possible to buy into DVC, stay in nothing but studios, not change your travel patterns and actually save money...

but the more common pattern is.....

"I'll buy 200 points. My trip will cost 157 points. Now what am I going to do with 43 points - well, lets take an extra quick trip every other year"

or

"We intended to stay in studios, but treated ourselves to a one bedroom....now there is no going back. And then we discovered with a two bedroom we didn't need to pull out the hideabed....heaven! Now instead of using 100 points for our week we use 282! (But we save money by cooking in our room)."

Your main concern seems to be value for your dollar, not "quality prepaid vacation." I suspect you won't be happy in the long run - unless your mindset were to change. We spend more with DVC, but it forces us to take regular vacations. It encourages us to treat our family (which isn't cheap - but its wonderful!). It enables us to sleep in a different room than our kids (my husband likes the romance enabling nature of this arrangement). So its worth every penny.

 

[doubletrouble_vb]

maul...heh heh heh

Let me preface this by saying I'm female. It seems to me that if your wife had to buy the $330 outfit, was committed to it for some reason, you could at least give her the benefit of an Expense Reduction if you won't let her call it a savings.

As for the people getting the AKL 2 bedroom suite...there are people who prefer to pay that and not be bothered with the details of DVC...I knew one of them. Her family went to Disney once or twice every year, stayed in places like GF, bought the full package (yikes) and were happy campers. For them a Disney vacation meant pampering all the way...never mind that they could put a hefty deposit on a DVC unit for what they were paying and never mind that maybe they weren't actually using the full benefits of the package they purchased.

 

[doubletrouble_vb]

I dunno...visits every two to three years? Although I was in this pattern myself I think you might be better off either renting or buying a small contract where you could do a combination of planning ahead and/or adding cash reservations. Most likely renting. For myself I was actually visiting Orlando annually but Disney every other. If you are visiting every other only I don't think I'd buy.

 

[JackThePumpkinKing]

For the record, I never viewed DVC as an investment, in the sense that it would make money, I am just looking for it to still have some resale value if I decided to sell it in the future.

As for the expense/savings concept, I hear you Pa@okw95, however as crisi points out I realize that it is an expense, however, since I like Disney and am making semi-regular trips down there, it is an issue of "bang for the buck" or as Crisi calls it "value for your dollar".

What confused me Crisi is that to my mind, I had better be getting "value for my dollar" if I am going to agree to the concept of "quality prepaid vacation". If not, since Disney is not a closed community, what is the sense to pre-pay? Why not just pay when you go on the vacation? I mean isn't that the same idea with cell phone rates? Pay a little more for your cell phones monthly bill and you can get more minutes (re: points), those minutes are (per dollar) cheaper. In effect, your pre-paying provides you with a discount, however, over-estimate the amount you will use your cell phone and you will end up paying for minutes (points) that you don't or can't use.

At least on the surface there seems to be a better "bang for your vaction buck" (minimally) on staying at a moderate resort (typically $20 or so per night when you factor in an amortized amount of initial buy-in) and more when you stay at a premium resort like the Boardwalk and the Grand Floridian and of course the best pay-off seems to be staying in a studio (which from what people are saying is better than some of the Deluxe accomodiations). Am I figuring it out wrong?

All of that being said, your point is well taken Crisi in that, I can see how once you get in, you can easily get hooked into the mindset of bigger and better vacations, and from reading the boards here and noticing how many people are looking for more points, I can see that you are right.

Personally, I hope to take my standard vacation (7-8 nights in a moderate resort or studio) as a regular thing and occasionally splurge for a better vacation (Deluxe Resort or 1B or 2B) as an ocasional thing by banking points. Assuming I have the discipline to stick to the concept.

Am I being realistic?

Thanks to EVERYONE for all the advice,

Jack

 

[laceemouse]

Hi Jack...Welcome to the DIS!!! We have a dog named Jack and we call him the Pumpkin King all the time LOL!!! Anyway, what are the ages of your kids and do you plan to have more? I know this sounds like kind of a nosey question but the big deciding factor for us was...we have 4 kids and therefore would always have to get either 2 rooms or some super pricey suite thingy so for us it was a no brainer. Even with a small family as the kids get older they are gonna want their privacy. We own another TS and I have to say once you start staying in condos with kitchens, washers and dryers, 2 or 3 tvs, whirlpool tubs, and all that space it is hard to go back to a regular hotel room. We only bought 160 points so will just go every other year or so for now (we only travel when school is out) but we are getting the add-on bug. My feeling is that if you do buy DVC you will start wanting to go to WDW more often...good luck with you decision....Lacee

 

[JackThePumpkinKing]

For myself I was actually visiting Orlando annually but Disney every other. If you are visiting every other only I don't think I'd buy. [/B]

Hmmm. . . the thinking I had was if I buy, we would make a 7-8 stay every year, occasionally skipping a year to bank points for a upscale vacation (more nights, better accomadations, multiple trips).

 

[JackThePumpkinKing]

Originally posted by laceemouse
We only bought 160 points so will just go every other year or so for now (we only travel when school is out) but we are getting the add-on bug. My feeling is that if you do buy DVC you will start wanting to go to WDW more often...good luck with you decision....Lacee

Lacee,

Well we have two now and there may be another on the way in a year or two. Right now the once we have young-uns, but to my mind PRIME disney age (the oldest is 6). So although we will most likely stay at three, in the future we could be in a similar boat to you in terms of the kids and privacy. Good Point.

Our trip plans seem to match yours exactly. Given Crisi's comments and yours it seems that the biggest thing will be to fight the add on bug.

Jack

 

[Pa@okw95]

To Doubletrouble--I get mauled at the mall all the time