My numbers are not helping me--what am I overlooking or miscalculating?

[sjdisneywedding]

If you are a non-DVC owner you cannot buy a small contract. I know if I put my 50 pt contracts up for sale (I own VWL and BCV) I will put the price at 100 minimum. The small contracts are premium and deserve a premium price.

I have no doubt if I put either of my two for sale at 100 I would bet they would sell quickly.

BCV = MAYBE

VWL = doubtful, theres 2 sales pending now for 50 pts @ $88 and $93

 

[Slakk]

BCV = MAYBE

VWL = doubtful, theres 2 sales pending now for 50 pts @ $88 and $93

Per my guide BCV contracts are coming in regularly at over around $100. We have seen E-Bay go for way over 100. The difference to a buyer for the small contracts is negligible the difference between $100 and $93 50 point contracts is $350 - that is a pretty cheap entrance fee into DVC for a non member.

I can almost guarantee that if I put them on the market at $100 they would sell.

 

[sjdisneywedding]

Per my guide BCV contracts are coming in regularly at over around $100. We have seen E-Bay go for way over 100. The difference to a buyer for the small contracts is negligible the difference between $100 and $93 50 point contracts is $350 - that is a pretty cheap entrance fee into DVC for a non member.

I can almost guarantee that if I put them on the market at $100 they would sell.

yes, BCV not VWL.

doesnt matter anyway, the OP isnt looking for 50 points

 

[Dean]

Like others have stated if you sell your DVC after 20 years you will likely get some if of your 10,000 initial purchace back. Although there will only be 16 years left on the DVC it will still be worth something.

Unlikely a VWL or similar contract will be worth in 20 yearsw anywhere near what it is worth today. It will likely have a value, but something less than today baring major inflation.

FutureSailor, I'm not going to go through the numbers but tell you more what I would do given certain circumstances. I don't recall seeing your currently family size or lenth of vacation. Assuming you are looking at studios, that could be your undoing as it's unlikely you'd continue to use that unit type long term. DVC will only work out for you in the best case scenario if you are going light or neutral on weekends. For example, going 9 days with 4 weekend days, you would never even break even compared to cash from Disney regardless of discounts or not. Especially given that Disney currently carries your rate through from the first night of your stay, a way to get an automatic discount for those that can take advantage.

100 points may be tough but you should likely at least consider 150 points anyway and if $4500 more makes it where you can't afford it, your likely stretching yourself too thin at 100 pts anyway. Much easier to find 150 pts and likely cheaper per point plus the option of a direct purchase. Many members find they end up needing more than they think they do. If you can truly get 5 or 6 good trips and the other parameters fit for you (light weekends, DVC resorts only), I'd suggest you seriously consider it. If your set on resale for less than 150, I wouldn't lock myself into 100 only. If you get 75 or 120, it could still be workable given your stated needs. Good luck, I hope it works out.

 

[steve and julie]

I've posted quite a few questions here over the last week and I am thankful to everyone who has answered. I have figured out that for my family, we need 200 points every two years. (One more-or-less weekly stay before Christmas every other year. We are tied to the school calendar for the next 10+ years. I know some people suggest thinking about longer-term but we have never been to Disney without the kids and have no idea if we would want to go without them. So for the forseeable future, it is Disney every other year in December.)

So to have these 200 points every other year, I thought about purchasing 100 points at VWL, which would cost about $100 per point (buying resale of course and including closing costs) for a total of $10,000. Annual dues is about $450. (I am pretty confident about my numbers up until this point--here's where I try to figure out the long-term costs . . .) If we rented the points, the cost would be $2000 every two years, meaning over the next twenty years we would spend $20,000. If we purchased the points, we would spend the initial $10,000 plus $9,000 in annual dues. So far, buying seems like a slightly better way to go. Until I looked at ing's savings calculator and figured that putting the $10,000 in a savings account earning even just 4 percent over the next twenty years would result, at the end of those twenty years, in a balance of $21,000!

I realize that the cost of renting could go up (as could the annual dues, though). But what else am I not factoring in, or factoring incorrectly??

And I do realize that buying DVC is not an investment--I am not looking to make money. I would like, though, not to pay more for my vacations than necessary. The one thing people have said on these threads that might convince me to buy even if it was a very bad money decision is that they would not take vacations otherwise--that by committing themselves to DVC they commit themselves to taking vacations. Our situation, though, is not like that--we are very regular vacation-takers!

that in ten years you will be able to sell your contract for something. I understand that the available years left on is shrinking, but would have to be around what 5,000 buying imho is the way to go

 

[Plutofan]

Looking at the 4 major DVC resellers I find 4 150 point contracts at various prices and a 100 point $84 per point contract. It would appear that 100 points contract are few right now.

 

[salmoneous]

I'm actually going to agree with your overall conclusion: If you can rent for $10/point, it makes no financial sense to buy DVC. But that brings up two issues.

1) Can you really rent for $10/point. The question isn't, "is it possible for somebody to rent for $10/point" but "can YOU rent for $10/point?" If you wanted VWL the week before Christmas this year, it would have been near impossible to get something for $10/point. And even if you get it this year, can you get it next year and the year after and every year you want?

2) There are non-financial considerations to consider. First, how much work/stress is there involved in renting. The person who isn't picky has an easier time renting. But it you have one and only one week you can go, and want points at a popular resort, you are going to have to work to get that rental reservation lined up. And after all that work, you are always going to have the stress of knowing your "landlord" can do something to mess up your rental anytime until you actually check in.

What's it worth knowing you don't have to do any of that - just pick up the phone and you are all set?

 

[Parkhopper13]

I would like to weigh in as the rare person who thinks this makes financial sense for your family. My reasoning is this:

- Your investment strategy is flawed because the return from your ING money market account is pre-tax...so assuming you are in the 20% tax bracket (conservative assumption), one-fifth of your return goes to Uncle Sam. That will limit your return quite a bit.

- Also, money markets fluctuate their return daily. What you get now may not be what you get in 10 years. Some may argue it might be higher...but that leaves you at the mercy of the economy.

- I think, like many others, you DVC points will be closely valued in 20 years to what they are today. My logic is that inflation will raise the weekly cost of a stay at WDW. Rough numbers show that it could very easily cost $5000/week to stay in VWL (depending on many factors), and with 16 years still left on your contract, that could easily maintain a value of $10,000. Your $10,000 would be worth less in 20 year due to inflation, but what do you care, you've received a dividend of a cheap vacation every other year.

- Inflation will also be a problem when renting. Points will almost certainly go up in price every year. You probably will be paying $20/point the last year or so you rent.

These are the biggest errors I noticed in your assumptions. Believe me, I am in finance and have done these numbers every which way when I bought. I agree that DVC is not right for everyone, but in your case, I think it would be very beneficial.

 

[marcomouse]

If you want to save money DONT STAY AT WDW !! DVC does not save money for anyone in almost any situation. I originaly thought it would save my family money on our trips to WDW and found that I just go more often and spend more money all around. I even bought a second contract because we love DVC soooo much. There are many many cheaper ways to go to WDW than DVC but none better. Most people say they want a certain amount of points to stay a certain week at a certain resort but it rarely works out that way. The overall flexability of DVC makes you want to stay at all the resorts at different times of the Year. You cant compare dvc TO OTHER TIMESHARES WHERE YOUR LOCKED INTO A CERTAIN WEEK. Before we owned DVC we went to Disney every other year for a week. Since owning over the past 6 years we have been to WDW 6 times from 1 to 2 weeks each time and 4 Disney cruises.

 

[Plutofan]

There is way to much risk from Disney and taxing authorities to assume that rental rates will remain at $10 in the future. I would assume a much higher rate in any analysis.

 

[SleepyatDVC]

I'm actually going to agree with your overall conclusion: If you can rent for $10/point, it makes no financial sense to buy DVC. But that brings up two issues.

1) Can you really rent for $10/point. The question isn't, "is it possible for somebody to rent for $10/point" but "can YOU rent for $10/point?" If you wanted VWL the week before Christmas this year, it would have been near impossible to get something for $10/point. And even if you get it this year, can you get it next year and the year after and every year you want?

2) There are non-financial considerations to consider. First, how much work/stress is there involved in renting. The person who isn't picky has an easier time renting. But it you have one and only one week you can go, and want points at a popular resort, you are going to have to work to get that rental reservation lined up. And after all that work, you are always going to have the stress of knowing your "landlord" can do something to mess up your rental anytime until you actually check in.

What's it worth knowing you don't have to do any of that - just pick up the phone and you are all set?

There REALLY is a non-monetary value in being able to call MS and book your own trips and change them a gazillion times if you want.

For example, I booked Presidents' Week at OKW at almost 11 months out "just in case" since I knew my girls were out of school that week. At 7 months out, I switched the reservation over to VWL (Sat to Sat).

However, since Presidents' Week is peak season for airfare to MCO, the fares were literally sky high ($400-$600/pp) and too rich for my blood. If I couldn't find a good sale, I was prepared to cancel the trip altogether and either stay home or do something else.

Same thing happened this past Presidents' Week. I didn't find a sale and purchase plane tickets until mid-December even though I had a DVC reservation at BWV for months before then and was prepared to cancel the trip if need be.

Well, I finally snagged a Delta sale this past weekend for $223.10/rt pp but it was for Sat to Sun. The sale was very brief, the fares were up again that evening and they are back to almost $400 today. If I didn't know that I would be able to call MS myself today to make changes to my DVC reservation by adding or wait-listing for an additional night, I probably would have missed the sale and been worried about purchasing cheap airfare for my DVC rental. Driving would have been out of the question, since DH was staying home.

Btw, I added the additional night this morning with no problems - although I did have to borrow 17 points. Even if you rent from a very flexible DVC member that was willing to add nights to your existing reservation, they may not have the additional points and/or may not be willing to borrow points for a rental.

Even before DVC, I usually made hotel reservations before securing airfare since hotel modifications and cancellations were usually easier to make without the penalties that airlines charge.

Not to mention that unless I was flying during peak times such as Xmas, Easter, T-day, or Prez Week, I don't like to purchase airfare too far out. Airfare sales are frequent enough (except for holiday peak times) that I don't have to. Anything can happen in 11 months. Heck I can get pregnant AND have the baby in that 11 month window! Not to mention weddings, family obligations, job deadlines, and injuries that can happen after a trip is booked but not taken yet.

So, while renting DVC points is much cheaper than renting directly from Disney or sometimes even buying into DVC, you do lose out in some ways in flexibility in changing/canceling and in peace of mind.

For me - if I was on the fence about buying into DVC or renting points - and the $$$ was approximately the same - I would lean towards buying for the above convenience and flexibility.

Obviously, buying will be usually be more $$$. Depending on how much more, I would factor in "some" resale value which may not be as much in the future as it is now. But since SOMEONE will always want to stay ON property, in my mind, DVC will always be worth more than some timeshares down the road where people have to give them away to get away from the annual maintenance fees. So, while we may not be able to sell our DVC for what we paid for it in 20+ years, I think it should have some value in comparision to other Orlando timeshares.

Additionally, we totally can afford buying into DVC in cash and the annual maintenance are no problem now. In the unlikely event that our financial health changes for the worse in the future, it adds a level of security that we can rent points out to cover the maintenance as well as the buy in costs so it won't become a financial burden to us as some timeshares can become.

And, of course, it's nice to know that our worse case scenerio of selling our DVC can actually MAKE us money in the near term. While this won't always be the case, I really don't think the drop in value will happen over night so we will have time to re-evaluate maintaining ownership in the future. And since I really don't think that our financial health will turn ugly long term, even if the value does dramatically drop overnight, the OTHER underlying reasons to purchase will still be sound and as long as we have the use of our DVC until the end of the contract, we would have gotten what we paid for and be happy.

To the OP and all those on the fence about buying, GOOD LUCK in making the best decision for YOUR family and situation and happy vacation planning!!!!

 

[FutureSailor]

Thanks for all the input (especially those who drew up spreadsheets--I usually just scribble the numbers out on the back of an old envelope . . .). We are definitely leaning towards buying. I am convinced it is not a financial disaster, like many timeshares seem to be (we might not come out ahead but we will not come out far behind) and I do see us going to Disney every other year for a long while.

Now my next issue is, try to find a small VWL contract or wait until AKL? (I think I mentioned somewhere that AKL is our favorite place to stay, though we really like WL too). It would be great to use points for the trip we are planning for Dec. 07 but that might not be possible if we wait for AKL (I read on another thread that Disney is likely to offer AKL to members first). Plus it seems likely that Disney will offer an incentive to members buying AKL (anyone remember what they did with the opening of SSR?). So those factors seem to weigh in favor of buying a small contract now. But is that short-sighted if we probably plan to spend most future stays at AKL?

 

[SleepyatDVC]

Thanks for all the input (especially those who drew up spreadsheets--I usually just scribble the numbers out on the back of an old envelope . . .). We are definitely leaning towards buying. I am convinced it is not a financial disaster, like many timeshares seem to be (we might not come out ahead but we will not come out far behind) and I do see us going to Disney every other year for a long while.

ITA That's the conclusion I finally came to. It may not be the BEST financial decision. But it's really not too bad considering the many potential "safety nets" and boy oh boy will I be having fun in the menatime!!! So that amount of financial risk was worth it for us.

Now my next issue is, try to find a small VWL contract or wait until AKL? (I think I mentioned somewhere that AKL is our favorite place to stay, though we really like WL too). It would be great to use points for the trip we are planning for Dec. 07 but that might not be possible if we wait for AKL (I read on another thread that Disney is likely to offer AKL to members first). Plus it seems likely that Disney will offer an incentive to members buying AKL (anyone remember what they did with the opening of SSR?). So those factors seem to weigh in favor of buying a small contract now. But is that short-sighted if we probably plan to spend most future stays at AKL?

Sorry I can't help with this decision.

Best of luck!

 

[RobDoc]

...Now my next issue is, try to find a small VWL contract or wait until AKL? (I think I mentioned somewhere that AKL is our favorite place to stay, though we really like WL too). It would be great to use points for the trip we are planning for Dec. 07 but that might not be possible if we wait for AKL (I read on another thread that Disney is likely to offer AKL to members first). Plus it seems likely that Disney will offer an incentive to members buying AKL (anyone remember what they did with the opening of SSR?). So those factors seem to weigh in favor of buying a small contract now. But is that short-sighted if we probably plan to spend most future stays at AKL?

If AKL is where you will really want to stay, I'd wait for a few months and just plan to purchase at that resort. While nothing is really official yet (until the resort is declared into DVC inventory for sales to begin), it's likely that sales information could be released within the next 6 months- depending on how SSR sales continue. In the past, while DVC members may have gotten advance information about sales at new resorts - there will still be contracts available for new purchase. I can't recall and financial advantage for existing members over new purchases in the past - so I would not purchase in the meantime just with the expectation of a discounted price.

Rest assured that ANY AKV sales information will be posted right here (and fully analyzed) just as soon as it is made public (and often while it is just in the pre-rumor phase - )

Stay Tuned!