Perspective to buyers from a 14 year DVC owner

[crisi]

So the overriding message of your post is don’t overextend yourself and sacrifice your financial future...sound advice but certainly not unique to buying DVC.

Lots of ways someone could overextend themselves and never take a vacation, let alone buy into DVC.

DVC by itself can be a solid tool for vacations, but like anything you can overextend and spend too much.

Not really any different than most other things in life...Top Ramen being an exception.

Yep, exactly. Understand the trade offs in life. Balance is important. So is discipline. Keep long term goals in mind when making decisions. Know what your priorities are. And don't pretend for a second that DVC is an investment in the same way that the 529 you have for your kids or your 401k is. Don't use an increase in value for someone else over 14 years - or in my case 20 years - to justify it unless you understand the financial impact on your life holistically.

And, when you've been taking regular Disney trips and your brother in law announces after a life of relative frugality that he is retiring at 55 once the last one graduates from college debt free, don't moan about the choices you made to him. He's laughing at you behind your back. No choice is necessarily better or worse - but most of us don't get to make both those choices.

 

[Drewski77]

Yep, exactly. Understand the trade offs in life. Balance is important. So is discipline. Keep long term goals in mind when making decisions. Know what your priorities are. And don't pretend for a second that DVC is an investment in the same way that the 529 you have for your kids or your 401k is. Don't use an increase in value for someone else over 14 years - or in my case 20 years - to justify it unless you understand the financial impact on your life holistically.

And, when you've been taking regular Disney trips and your brother in law announces after a life of relative frugality that he is retiring at 55 once the last one graduates from college debt free, don't moan about the choices you made to him. He's laughing at you behind your back. No choice is necessarily better or worse - but most of us don't get to make both those choices.

And balance doesn’t just mean living a frugal life and running the risk that you might not make it to 55, 65, or beyond.

Life is all about choices, and people value different things.

Good on those that choose frugality, and good on those who spend a bit more...hopefully they each get what they want.

 

[irazabul]

Love this thread! I have been an owner since 2008, SSR, resale about $65 per point. I can't argue with it being a great investment at that price. I do about 60/40 vacation and rent out my points, and ignoring the time value, I have already recouped my initial cost from rentals already all the while enjoying all the vacations I wished to take (including in Hawaii). The ROI, ROE, ROC and almost any other financial metric has worked out very well for anyone who purchased on the dips.

 

[Bobby2443]

I thought the same thing. My 19 year old wants to go now more than he did when he was 7.

I'm happy to hear that. Honestly why I got into DVC in the first place was I did a "try before you buy" staying at beach club in a one bedroom for about 11 days and when I saw how much I spent on that trip it made me feel sick. I refuse to pay that much again without owning something so that got me into buying beach club contracts and now I'm finishing up buying grand floridian contracts because I figure my young kids will like staying in the MK area.

 

[Meglen]

Any of these numbers factoring in ticket prices? When you book a package they tend to have sales on tickets and such. Also the longer you stay the cheaper they are. So even if the room is "free" your still spending a decent chunk on tickets.

 

[Nie0214]

Any of these numbers factoring in ticket prices? When you book a package they tend to have sales on tickets and such. Also the longer you stay the cheaper they are. So even if the room is "free" your still spending a decent chunk on tickets.

We've done things having DVC that we wouldn't have otherwise-- like we took a quick trip to run the Star Wars Rival Run and did the Backstage Magic tour. Neither of those required tickets and we had a blast! We also often get Gold APs and take a trip then another trip the next year just a week before, so we get two trips out of one set of tickets. You can get very creative, but yes, you absolutely give Mickey more money every way.

 

[Drewski77]

Love this thread! I have been an owner since 2008, SSR, resale about $65 per point. I can't argue with it being a great investment at that price. I do about 60/40 vacation and rent out my points, and ignoring the time value, I have already recouped my initial cost from rentals already all the while enjoying all the vacations I wished to take (including in Hawaii). The ROI, ROE, ROC and almost any other financial metric has worked out very well for anyone who purchased on the dips.

How could this be though???

The “only” investment is putting all your available resources into the stock market, anything else cannot be considered an investment.

And people can only overextend themselves with DVC purchases. Nobody overextended themselves with buying stocks on margin or trying to time the market with frequent trading.

Plus, who can deny the joy and lifelong memories that come from gathering the family around the computer to look at a stock portfolio...who needs vacations when you and your loved ones can analyze investment reports together

 

[wdw&sonny]

The math has never worked for me. The OP says he paid $37,890 total for the 14 trips covering 70 nights. That's $541 per night average since 2008. The dues alone were $17,090 or $244/night.
If instead, he invested his $20,800 (even in an S&P index), he would have $58,591.
He could have rented DVC points and stayed in the same DVC accommodations for the same $244 per night. We do so frequently (and have the $58,591 to spend on other things).

Don't get me wrong...if you have the disposable finances, and choose to buy DVC, great for you. It's like buying an expensive car. It may not be necessary, but some choose it as a luxury. I just have trouble when people try to justify it as an "investment". It's not an investment. It's a purchase. More power to you if you can do so. Heck, if I inherit a great sum, I would love to leave DVC to my children.
For now, I'll spend the equivalent of your 'dues' on my vacation and keep the initial investment for myself.

 

[Drewski77]

The math has never worked for me. The OP says he paid $37,890 total for the 14 trips covering 70 nights. That's $541 per night average since 2008. The dues alone were $17,090 or $244/night.
If instead, he invested his $20,800 (even in an S&P index), he would have $58,591.
He could have rented DVC points and stayed in the same DVC accommodations for the same $244 per night. We do so frequently (and have the $58,591 to spend on other things).

Don't get me wrong...if you have the disposable finances, and choose to buy DVC, great for you. It's like buying an expensive car. It may not be necessary, but some choose it as a luxury. I just have trouble when people try to justify it as an "investment". It's not an investment. It's a purchase. More power to you if you can do so. Heck, if I inherit a great sum, I would love to leave DVC to my children.
For now, I'll spend the equivalent of your 'dues' on my vacation and keep the initial investment for myself.

Actually the OP can sell his contract today and get back more than the original cost, so only paid MF’s.

For most investors not every available dollar is earmarked for stocks, so the tired comparison to the S&P500 is a false premise.

Compare it to where the money would be sitting, and for me, my annual DVC trip savings is worth far more than the near zero my funds would be earning at the bank or in bonds.

I have plenty in the market, DVC is an alternative to idle cash earning practically nothing...whether it’s classified as an investment or not means nothing to me.

 

[Yinn]

To those considering DVC and trying to project costs, here's my history/cost of owning DVC. Purchased AKV, a 200 point contract purchased at $104/point in January, 2008.

Initial cost: $20,800 (200 pts @ $104/pt)
Annual Dues to date: $17,090
Total DVC Cost to date: $37,890

Trips taken via DVC:
2008 SSR 1BR 7 nights July ( rack rate at time of stay $2,385 - more on this below)
2009 AKV 2BR 7 nights Aug ($5,670)
2010 no trips
2011 SSR 1BR 7 nights Nov ($3,060)
2012 OKW 1BR & 2BR 7 nights Aug ($5,910)
2013 AKV 1BR 5 nights Sep ($3,689)
2014 no trips
2015 OKW 2BR 4 nights Sep ($1,950)
2016 BLT 2BR 5 nights July ($5,160)
2016 BLT 1BR 4 nights Sep ($3,600)
2017 BLT studio 4 nights Apr ($1,173)
2018 SSR 2BR 6 nights July ($4,866)
2019 BLT 1BR 3 nights June ($2,596)
2019 SSR studio 4 nights Aug ($1,095)
2020 no trips - canceled July res.
2021 BLT 1BR 5 nights Jan ($4,445)
2021 BLT 1BR 3 nights May ($3,337)

So that's 14 vacations using DVC which would have cost, if I booked the room directly without having DVC, a total of $49k. Roughly $3,500 per trip - but as you can see many of them were 3 or 4 nights (these are weekend getaways).

My rationale for buying in at DVC was we preferred the higher end resorts, so we likely would book trips at those anyway. My DVC cost, including annual dues to date, is $38k. To date I would've spent $49k on the trips I've already taken, so I'm $11k ahead.

Or am I?

When you consider the perks Disney includes when booking complete packages online, you're often getting extra days on the park admission and/or even free dining plan. That kind of negates the "savings" of owning DVC. At least from my perspective.

I think the biggest question you need to ask if considering DVC is are you typically one who prefers the higher end resorts? That is what you're buying here. For me, it's worth it. The other reason to own, which a price tag can't really be put on, is that having DVC discourages the "we'll have to plan another trip" and then before you know it you've been saying it for 2 years. I have a 19 year old off at college. I might not have done those weekend getaway trips with him if not for having points I needed to use.

From that perspective, DVC is completely worth every penny. Don't do it from the perspective of saving money. You'll break even, or maybe save a bit. Do it because you'd book those rooms anyway, and because you want the push to make those annual vacations before time slips away.

Hope these ramblings help someone else on the fence with deciding.

Some of this depends on which contract you buy and how you use it though.

For example,
Contract #1, AKV Direct
Purchase Price: $13,372.64
Annual dues since Purchase: $1180.61
Rental income since purchase: $2056.50
Value of personal use since purchase @ rack rates: $2199.39

Projected breakeven from purchase: 7 Years

Contract #2, PVB Resale
Purchase Price: $26,500
Annual dues since Purchase: $2852.15
Rental income since purchase: $2424.40
Value of personal use since purchase @ rack rates: $11,779.90

Projected breakeven from purchase: 4 Years

Contract #2, CCV Resale
Purchase Price: $28,100
Annual dues since Purchase: $1518.06
Rental income since purchase: $1596
Value of personal use since purchase @ rack rates: $2315.27

Projected breakeven from purchase: 6 Years

My PVB contract is on track to breakeven twice as fast as my AKV contract. And even though contract #2 and #3 have similar purchase prices, (and per year of annual dues) the breakeven point is vastly different due to how we've been using and renting that contract.

 

[crisi]

How could this be though???

The “only” investment is putting all your available resources into the stock market, anything else cannot be considered an investment.

And people can only overextend themselves with DVC purchases. Nobody overextended themselves with buying stocks on margin or trying to time the market with frequent trading.

Plus, who can deny the joy and lifelong memories that come from gathering the family around the computer to look at a stock portfolio...who needs vacations when you and your loved ones can analyze investment reports together

Visit us over on Bogleheads or another financial forum and you will hear exactly that - don't overextend yourself in the market....diversify....keep cash on hand....don't speculate with money you can't afford to lose, do your research, don't borrow to invest. Its honestly a lot of the same advice. But that is off topic and inappropriate for this forum so that isn't what we post here.

 

[RivShore]

The math has never worked for me. The OP says he paid $37,890 total for the 14 trips covering 70 nights. That's $541 per night average since 2008. The dues alone were $17,090 or $244/night.
If instead, he invested his $20,800 (even in an S&P index), he would have $58,591.
He could have rented DVC points and stayed in the same DVC accommodations for the same $244 per night. We do so frequently (and have the $58,591 to spend on other things).

Don't get me wrong...if you have the disposable finances, and choose to buy DVC, great for you. It's like buying an expensive car. It may not be necessary, but some choose it as a luxury. I just have trouble when people try to justify it as an "investment". It's not an investment. It's a purchase. More power to you if you can do so. Heck, if I inherit a great sum, I would love to leave DVC to my children.
For now, I'll spend the equivalent of your 'dues' on my vacation and keep the initial investment for myself.

We couldn't make the math work for us until hotel costs really jumped in 2018-19, then it started to make sense for us.

As for your math, your forgetting that you have amortized the full purchase cost against those 14 trips, that means that all future trips will be free, other than the dues. That's when DVC can start to make sense - the out years after breaking even.

I haven't checked the math, but the dues seem high at $244 a night, maybe it's because they are mostly one and two bedroom units. I don't think you can rent those rooms at $244 a night, that's usually a studio cost, if your lucky.

As for comparing it to what could have been made investing it, I have preached on these boards that DVC is not an investment, it is just a pre-paid 50 year vacation. But you can't ignore the residual value in your comparison. They could basically sell it today for the same cost they paid for it. So, in that case, the 14 years of vacations only cost ~$6/pt of dues. Not a bad deal and a whole lot cheaper than renting.

 

[MonaMN]

We couldn't make the math work for us until hotel costs really jumped in 2018-19, then it started to make sense for us.

This is literally the reason we just bought points - I looked at the current prices of moderates and nearly fell off my chair.

I don’t think of it as an investment as much as pre-paid lodging at places nicer than I could get out of pocket. We bought resale at CCV so we have many years to use our points - so our initial cost will be spread out over a long period of time - unit cost will be much less than paying OOP.

 

[Nabas]

Love this thread! I have been an owner since 2008, SSR, resale about $65 per point. I can't argue with it being a great investment at that price. I do about 60/40 vacation and rent out my points, and ignoring the time value, I have already recouped my initial cost from rentals already all the while enjoying all the vacations I wished to take (including in Hawaii). The ROI, ROE, ROC and almost any other financial metric has worked out very well for anyone who purchased on the dips.

Our first DVC purchase was a BWV resale at $55/point, back when market bottomed out about 10 years ago.

I've calculated that with all DVC costs included, we've spent about $12.50 per point so far.

Meanwhile, BWV resales are selling for about double what we paid.

My spouse tells me we should sell and then our last decade of WDW vacations would be almost free, but I want to keep taking WDW vacations!

 

[sethschroeder]

If instead, he invested his $20,800 (even in an S&P index), he would have $58,591.

Except you take that $20,800 and do the rentals: (pricing is estimated but point charts were pulled)

I assumed going on weekend and always picked Standard Views and went with the cheaper timer period for the month listed by the OP. Also since you are renting points you need to pay for those rentals earlier thus not getting any growth on the money you pulled out of the S+P.

This is fairly basic but I also never accounted for the taxes you would need to pay on the money earned on your S&P investment.


2008 - 1BR @ SSR was 243 Points ($2400 rental @$10/point)
2009 - 2BR@ AKV was 198 Points ($1980 rental)
2011 - 1BR @ SSR was 197 Points ($2167 rental @$11/point)
2012 - 1BR/2BR @ OKW 458 Points ($5038 rental)
2013 - 1BR @ AKV 118 Points ($1298 rental)
2015 - 2BR @ OKW 130 Points ($1560 rental @$12/point)
2016 - 2BR/1BR @ BLT 374 Points ($4862 rental @13/point)
2017 - Studio @ BLT 82 Points ($1066 rental)
2018 - 2BR @ SSR 254 Points ($3302 rental)

S&P 500:
2008 - -38.49% $20,800 - $2400 = $18,400 ($11,317.84 after market loss on $20k)
2009 - +23.45 $11,317.84 - $1980 = $9,337.84 ($11,527.56 after market gain)
2010 - 12.78% = $13,000.78 after market gain
2011 - 0% $13,000.78 - $2167 = $10,833.78 (no market gain/loss)
2012 - 13.41% $10,833.78 - $5038 = $5,795.78 ($6,573.00 after market gain)
2013 - 29.6% $6,573.00 - $1298 = $5,275.00 ($6,836.40 after market gain)
2014 - 11.39% = $7,615.06 after market gain
2015 - -0.73% $7,615.06 - 1560 = $6056.06 ($6,011.85 after market loss)
2016 - 9.54% $6,011.85 - 4862 = $1,149.85 ($1,259.54 after market gain)
2017 - 19.42% $1,259.54 - $1066 = $193.54 ($231.12 after market gain)
2018 - Negative $3,070.88

We didn't even get to the bigger trips in 2019 and 2 trips in 2021

 

[CarolMN]

My spouse tells me we should sell and then our last decade of WDW vacations would be almost free, but I want to keep taking WDW vacations!

Well, I tell me we should sell, too, but like you, I still want to go to WDW and stay at the BWV for way, way, way less than Disney's awful cash prices.

Why can't we eat the cake and still have it? That's what I want to know!!

 

[Nabas]

The math has never worked for me. The OP says he paid $37,890 total for the 14 trips covering 70 nights. That's $541 per night average since 2008. The dues alone were $17,090 or $244/night.

The math does not work for a lot of people. It really depends on how you vacation. My sister, for example, easily could afford a DVC membership but is perfectly happy staying at Value Resorts. DVC does not make sense for her.

The OP has a different vacation pattern. As noted in the original post, the OP's stays have mostly been in one and two-bedroom villas (with rack rates listed):

Trips taken via DVC:​

2008 SSR 1BR 7 nights July ( rack rate at time of stay $2,385 - more on this below)​

2009 AKV 2BR 7 nights Aug ($5,670)​

2010 no trips​

2011 SSR 1BR 7 nights Nov ($3,060)​

2012 OKW 1BR & 2BR 7 nights Aug ($5,910)​

2013 AKV 1BR 5 nights Sep ($3,689)​

2014 no trips​

2015 OKW 2BR 4 nights Sep ($1,950)​

2016 BLT 2BR 5 nights July ($5,160)​

2016 BLT 1BR 4 nights Sep ($3,600)​

2017 BLT studio 4 nights Apr ($1,173)​

2018 SSR 2BR 6 nights July ($4,866)​

2019 BLT 1BR 3 nights June ($2,596)​

2019 SSR studio 4 nights Aug ($1,095)​

2020 no trips - canceled July res.​

2021 BLT 1BR 5 nights Jan ($4,445)​

2021 BLT 1BR 3 nights May ($3,337)​

Staying in a one or two-bedroom villa is a very different experience than crowding into a single room.

Disney charges a great deal for its villas, much more than its single rooms. Whether it's worth it really depends on your vacation habits.

When pricing out DVC, rather than look at the total price, the more important consideration is how much you pay per point. Based on my calculation, the OP has paid $13.53 per point to date, which is less than someone would pay elsewhere. The OP is already ahead of the game.

The OP will end up paying even less as time goes by and the original purchase price gets spread across more years.

Really, if you want to stay onsite cheaply, then always stay at an All Star Resort. We have stayed at all Value Results (and all Moderate Resorts) and enjoy them, but they got repetitive after a while. DVC gives us flexibility without paying Disney's Deluxe Resort prices.

For someone who goes to WDW frequently, a DVC membership allows them to experience several Deluxe Resorts that, over time, end up costing about the same as a Moderate Resort.

IMO, DVC is for someone with disposable income who is looking for a place to vacation every year and has decided they like Disney. DVC does not make sense for everyone.

 

[RivShore]

This is literally the reason we just bought points - I looked at the current prices of moderates and nearly fell off my chair.

I don’t think of it as an investment as much as pre-paid lodging at places nicer than I could get out of pocket. We bought resale at CCV so we have many years to use our points - so our initial cost will be spread out over a long period of time - unit cost will be much less than paying OOP.

We are the same! Got Moderate sticker shock and took another look at DVC. Now we get far superior rooms and should break even with Moderates at 10-12 years and the kids should get the full 50 years of use out of Riviera.

 

[davidl81]

The math does not work for a lot of people. It really depends on how you vacation. My sister, for example, easily could afford a DVC membership but is perfectly happy staying at Value Resorts. DVC does not make sense for her.

The OP has a different vacation pattern. As noted in the original post, the OP's stays have mostly been in one and two-bedroom villas (with rack rates listed):

Trips taken via DVC:​

2008 SSR 1BR 7 nights July ( rack rate at time of stay $2,385 - more on this below)​

2009 AKV 2BR 7 nights Aug ($5,670)​

2010 no trips​

2011 SSR 1BR 7 nights Nov ($3,060)​

2012 OKW 1BR & 2BR 7 nights Aug ($5,910)​

2013 AKV 1BR 5 nights Sep ($3,689)​

2014 no trips​

2015 OKW 2BR 4 nights Sep ($1,950)​

2016 BLT 2BR 5 nights July ($5,160)​

2016 BLT 1BR 4 nights Sep ($3,600)​

2017 BLT studio 4 nights Apr ($1,173)​

2018 SSR 2BR 6 nights July ($4,866)​

2019 BLT 1BR 3 nights June ($2,596)​

2019 SSR studio 4 nights Aug ($1,095)​

2020 no trips - canceled July res.​

2021 BLT 1BR 5 nights Jan ($4,445)​

2021 BLT 1BR 3 nights May ($3,337)​

Staying in a one or two-bedroom villa is a very different experience than crowding into a single room.

Disney charges a great deal for its villas, much more than its single rooms. Whether it's worth it really depends on your vacation habits.

When pricing out DVC, rather than look at the total price, the more important consideration is how much you pay per point. Based on my calculation, the OP has paid $13.53 per point to date, which is less than someone would pay elsewhere. The OP is already ahead of the game.

The OP will end up paying even less as time goes by and the original purchase price gets spread across more years.

Really, if you want to stay onsite cheaply, then always stay at an All Star Resort. We have stayed at all Value Results (and all Moderate Resorts) and enjoy them, but they got repetitive after a while. DVC gives us flexibility without paying Disney's Deluxe Resort prices.

For someone who goes to WDW frequently, a DVC membership allows them to experience several Deluxe Resorts that, over time, end up costing about the same as a Moderate Resort.

IMO, DVC is for someone with disposable income who is looking for a place to vacation every year and has decided they like Disney. DVC does not make sense for everyone.

You are spot on here. These are vacations and like any trip there are tons of choices you can make to save money or splurge. If one really anted to save money they could just get an off site hotel for an example. There is no world where DVC would compete with that from a cost standpoint. Even renting a VRBO home would be much cheaper. Of course that changes the experience, you are no longer in the Disney bubble. We personally like being in the Disney bubble for that week when we go. I don't want to drive a car, I don't want to see the tacky souvenir shops around Disney. We just really enjoy being in that bubble but we also don't want to be in very small rooms. So we made a decision to buy into DVC and enjoy the benefits of the larger rooms etc but at least save over rack rates. I'm sure I could do the math and see how much money I could have "saved" if we made different vacation choices, but would we have enjoyed the time as much as we did?

 

[crisi]

You are spot on here. These are vacations and like any trip there are tons of choices you can make to save money or splurge. If one really anted to save money they could just get an off site hotel for an example. There is no world where DVC would compete with that from a cost standpoint. Even renting a VRBO home would be much cheaper. Of course that changes the experience, you are no longer in the Disney bubble. We personally like being in the Disney bubble for that week when we go. I don't want to drive a car, I don't want to see the tacky souvenir shops around Disney. We just really enjoy being in that bubble but we also don't want to be in very small rooms. So we made a decision to buy into DVC and enjoy the benefits of the larger rooms etc but at least save over rack rates. I'm sure I could do the math and see how much money I could have "saved" if we made different vacation choices, but would we have enjoyed the time as much as we did?

Yep, but you'll pay for the privilege of not seeing tacky souvenir shops and having room to spread out. Which is great - its been an awesome value for my family. But it hasn't come cheap....cheaper than paying rack rate for a two bedroom, sure - but we would have never paid rack rate for a two bedroom. I am a Disney snob. I'd rather not go than stay offsite. Heck, I'd rather not go than stay at a not-near-park resort - no SSR or Riviera for us! Only walking to Epcot or the MK will do (exceptions made for being able to see zebra from your patio when traveling with small children). Snobbery costs, though.