Planning Ahead - Things to Consider

[Andrew015]

Hey DVC Gang,

I am planning on a DVC Membership within the next two years, but wanted to start doing my homework now. I am interested in purchasing in the WLV, as this is my favorite Disney Resort. I would also consider the new Contemporary villas depending on the price differential.

Anyways, a few "Newbie" questions: I'm trying to understand the total cost structure. As I understand it, you pay a one-time upfront cost of $16,640 (plus closing costs). In addition, you also pay annual dues based on the # of points that you purchase (which is a fixed $ amount based on the resort X the # of points you want).

Can you change the amount of points that you want year in and year out, or is that a fixed # that is established in the beginning?

For someone who would wish to spend 4-6 weeks per year at WDW, what would be a good range of points to start with? What are the current point rates for WLV?

Thanks for any insight offered.

 

[JenSop]

First, I recommend looking at the points charts so you can see how many points a room "costs" per night in each season. (Link at the top of this page near that little bird in the top right corner.)

When you buy into DVC, you buy a certain number of points. That is the number of points you are given each year. For example, we bought in at 160 points, which means that each year, we get 160 points. We then have the option of banking those points into the next year (or a portion thereof) OR borrowing from the next year's points.

I'll demonstrate. Let's say I want to take a really big trip in 2010. I'll bank all my 2009 points into 2010, then I'll borrow my 2011 points.

Another example: This past summer, we took a big trip with extended family. I used ALL my 2007 points, all my 2008 points, and borrowed some points from 2009. So next year we are doing a smaller trip, as we only have 75 points left in 2009.

We are looking to save up for an add-on. I'm hoping for a 40 point add-on. That would put us up to 200, so every year we would get 200 points.

To buy into WLV, you'll either have to go on waiting list with Disney, as the resort is not currently being sold, OR you can buy a contract resale. (Again, you can click on the big banner for the Time Share Store that's at the top of the page to see a listing of resales.

I hope I've answered most of your questions. We LOVE our home resort of AKV and can't wait to get more points there!

 

[dudelydude]

Jen did a stellar job explaining about purchasing a fixed amount of points that you can use each year with all of the banking and borrowing info. Let me just add a few things. First, you stated a dollar amount for the initial buy-in, but this dollar amount varies so much by resort and also by reseller if you buy a resale contract. If you are not going to buy at AKV or BLT where you can take advantage of current or possible future incentives, you should look into buying through the resale market. It'll be cheaper to buy resale than it will be to buy through Disney via their wating list for the older resorts. Also, you said that you assume a fixed dollar amount for annual maintenance fees. Annual fees increase each year. If you look around this board enough, there is a chart that shows the history of dues increases. I don't know the percentage of increase off hand, but I think I noticed that one increase was from $4.25 per point to $4.50 per point, so that gives you some idea. I don't know if you have checked the points charts and resale listings yet, but 4-6 weeks worth points at WDW per year could cost you roughly between $50k and $100K just in contract costs alone, to say nothing of the thousands in maintenance fees. Sorry for the comedown, but that's quite a desperity from the $17k you were looking at initially. Keep the questions coming and don't get discouraged. You can always start small (through resale or directly through Disney) and keep building as time goes by.

 

[Andrew015]

Thanks for the explanation. I think I'm starting to catch on a little bit better.

I'm not too discouraged by the large entry fee to obtain 4-6 weeks. I think in the long run (provided you can take advantage of it), this is well worth the price of admission (and is still much cheaper than investing in a vacation home of some sort).

Aside from the lead time with which you can make reservations, is there any great benefit to choosing one resort over another? I understand that if you have no intentions of staying at a given resort, then it's probably not a good pick to make that your home base of operation. But looking at the WLV and BLT (two resorts I like very much), it would probably make more sense to invest in BLT, given the longer period of ownership, correct?

Is the 7 month vs. 11 month differential only crucial during peak seasons?

 

[Rileygirl]

If you are thinking about retirement, and spending 4-6 weeks consecutively down at Disney, I think you should consider SSR and and Extended OKW contract.

Reason being: these two have longer contracts. These two are more like vacation home living (do you want to be immersed in Disney for 6 weeks at a time, or do you want to have a vacation type living with the advantage of being minutes away from any theme park?)

One HUGE bonus of OKW- you park right outside your condo. If I was treating this as 'vacation home' type of deal, having your car right outside your spot is a giant advantage - just think of grocery shopping for #1, or going anywhere besides disney, you just pop in your car and go. Another big Plus, plus, plus of OKW - room sizes are bigger. Hang on, it gets better, OKW has one of the best MF's going, AND costs one of the least in amounts of points. Another big plus-- on the resell market you can get very good deals for OKW - you just need to factor in the cost of extending the contract, and determin if buying from Disney directly is a better deal.

SSR has its values too,, being more condo like, and a quiet retreat from the hub bub of Disney, parking is suppose to be very close to the buildings, and again, lower MF's.

However, if you are looking to start traveling to Disney sooner then the old 'retirement plan', buy a contract at WVL where you love,(or BLT but caution - high number of points for a room compared to any other resort, thus you need more points to stay there, that drives up the MF's!) for a smaller amount of points and take a week or two there. Add on with OKW or SSR pts so you can stay longer periods of time. That way you can enjoy being immersed in Disney NOW, and start gathering points for the DVC Home that you most want to stay in later... (thats my plan anyways!)

At a later date, when you are ready to stay longer, you can decide whether or not to sell your WLV to purchase more in the other home you most prefer, or simply use the WLV pts at the 7 month mark to get your room at OKW (right now its pretty easy to book OKW at the 7 month mark, but you never know what the future will be like).

This is of course, assuming that the style of vacation you want right now will be slightly different then what you see yourself doing in the future.

 

[ClarabelleCow]

I think the 7 month/11 month depends when you plan on going. Also consider, if your staying for 4-6 weeks, I would think you would at minimum want a 1 bedroom. But I know exactly where your coming from. Dumping $100,000 into DVC and maintenance fees above that, is still much cheaper than owning a home anywhere. I just looked at the point charts for 1/10/09 - 2/21/09, it would be 1357 points in a on bedroom. We own two weeks in the caribbean in a 3 bedroom penthouse, i think we spent about 50K for the 2 weeks and spend 2000 a year in maintenance. We love it, and much cheaper than owning a home on the island!!

 

[dudelydude]

Rileygirl has some good points on Old Key West. It takes less points to stay there, points are at a lower cost and fees are lower. However, the reasons that she likes (the location) is the reason I don't like it. If you have seen a large overhead map of the DVC resorts, you will see that Beach Club and Boardwalk are within walking distance of Epcots I-gateway at the back of the park that you can use to enter. Boardwalk (they say) is also within walking distance of DHS. At these resorts, you are in the center of some kind of action while OKW and SSR puts you off the beaten path a little bit. If I am correct, you said that you would go to Disney 4-6 weeks per year and not 4-6 weeks consecutively, so the condo / townhome style at OKW or SSR may or may not feel like a benefit vs. location. VWL gives you quicker access to the MK part of the property, which I like. There are pros and cons to all resorts, so you just need to figure out your priorites...cost?...location?...amenities? Once again, you can always do add-on contracts for more points and at different resorts to sample everything, but keep that 7 month booking window in mind for non-home resorts when trying to book during busier times of the year. Some DVCers say they never have a problem booking at non-home resorts, but it is always during a slower season.

 

[Andrew015]

I appreciate everyone's responses thus far. You all bring very valid issues to light, all of which have got me thinking in a few different directions. Rileygirl has provided some good insight regarding the benefits of OKW and SSR. While some may enjoy the benefits of being "off the beaten path", I myself, actually prefer to be right in the thick of what WDW has to offer. And the more that I think about it, maybe it makes sense to invest in two separate DVC properties (2-3 weeks worth at each) rather than lumping everything into one basket. This would offer a little bit more variety and flexibility into the portfolio. Dudelydude brings up a good point about being within walking distance of EPCOT. I, myself, prefer the MK location the best, and VWL is my favorite resort at WDW. However, my parents are quite fond of EPCOT, and I will most likely be gifting points to them on occassion. I think this would make for a good, ballanced plan.

I have some thinking to do over the next 12 months or so. I recently started a second online business venture, and depending upon how quickly things kick into full swing determines exactly when I'll fire up my DVC membership . And with the potential rumors of a VC at the GF or Poly, it might be worth the wait

How has the economy been effecting the resale market? I would assume it suffers similar effects as the regular resale market. Although many members are probably not as dramatically effected by the economic downturns as others, given that you have to have some disposable income to get into DVC.

 

[Rileygirl]

Just to clarify, I love being in the thick of things too - my first (and so far only) contract is at BCV I just think if we decide to get out of the snow for a month or two in a few years, I will prefer being at a more condo like setting for that length of time -- thats just personal preference on my part.

One thing I will say, buy several contracts in smaller point numbers. A small point contract is easier to sell in the future, and at a higher dollar value. There are many threads on the dis that explain the benifits of smaller contracts, you should research them, (they explain it better then I can )

hth

And... I think it is a real buyers market out there, if you have the cash to spend.... buying resell DVC can be very cost effective, as long as you do your research and number crunching to compare against buying from Disney.

 

[Golden Rose]

We did what you're now thinking about... we bought a decent number of points at two resorts. (Ok, we still haven't closed on our resale purchase, but we should soon.) Not as many points as you're considering, but certainly enough to do couple of weeks a year. We don't have the vacation to do 4-6 weeks a year, but doesn't that sound like fun!

We bought AKV from Disney. We love the Savannah view rooms, we think we'll love the new pool, and we love concierge. (That is the only DVC that currently has concierge level. We know they are hard to get, so we're not going to count on getting them, but we want that option sometimes. I understand you are extremely unlikely to get Concierge level at the 7 month mark.)

We're currently waiting to close on a BWV resale, because we want to be in the thick of things sometimes and we love Epcot. We found a contract with all 2007 points banked and all 2008 points coming, so we jumped on it. Including closing costs, we saved about $2000 over buying directly from Disney. We could have saved more if I had been more willing to bargain over the price, but I saw what I wanted and decided to take it rather than lose a perfect for us contract over a couple of hundred dollars.

We did buy the same use year, so we'll be able to combine our points at the 7month window. We have considered adding on at BLT, but not this year. We've just joined DVC in August and we're already adding on BWV, so BLT will have to wait. The incentives for buying it right now aren't particularly good, and although they may not improve, I doubt they'll get worse.

 

[dizplanner]

Home resort affects two things - where you can book between 7 and 11 months and your annual maintenance fees.
If you are buying VWL or BWV and maybe even BCV (have to look at this one carefully based on the individual contract), I would buy them via resale. In your situation, I would buy contracts in the 150-300 point range - contracts for lower points go at a premium and since you want a larger amount of points, why pay it? And contracts for greater than 300 are harder to sell if you want to sell of the contract later (although this fact might let you get a good deal on a large contract if you are willing to take the resale risk - just can't get it too cheap or Disney will ROFR it). VWL seems to be going for about $80/point, BWV ~$85 and BCV ~$93. You will also have closing costs and the seller may want 2008 maintenance fees. I think Disney is at $102 for these points and may or may not have points to sell immediately. Disney's closing costs are about half of resale and they prorate the 2008 maintenance fees base on number of months left (i.e. you would pay for Oct-Dec or 1/4 of a year). You need to look at the number of points you get resale - does it have all of current year and future year points? Are there any banked points? With Disney you get current year (which is 2008 points for all months that have passed and 2007 for use years that have not yet passed (like December). With resale you either have to pay cash or arrange your own financing (although it sounds like TSS has a lender they work with). Disney will finance, although it is expensive. When buying the second (and later) resale, you might want to get the same use year. If you do it before they switch the contract to you, they will be able to add it as an add-on to your first contract if the use year is the same which would make it easier to manage your points. But if it is a great contract, I don't thinik managing multiple use years/master contracts is that difficult.

Booking - if you want to stay at VWL from Thankgiving to the end of the year, you pretty much have to own there and book close to 11 months. I think the rest of the year you can get it at 7 months, but some months will be easier than others. For BCV & BWV, Food & Wine festival (October) is hard to get without owning there. I think it is getting harder to book where you want at 7 months, but not impossible. The best strategy is to book at your home resort in the 7 to 11 month time (thus needing to own where you won't be disappointed to stay) and then changing at 7 months to where you want. Sometimes you will get it (I have succeeded, but I've only done this twice - I own at VWL and switched to OKW Grand Villa in March and BCV studio in May. My other trip I wanted to stay at VWL and for my upcoming trips, I changed my reservation three months out and SSR was the only choice in Nov (and many days had no availability) and I am choosing to stay at VWL in March.)

Costs - without knowing the size of unit or the times of year you want to go, I am guessing you will need 1000-1500 points to get your 4-6 weeks/year. Let's say you buy this is 250 point chunks - via resale this will run you roughly $20,750+m.fees at VWL and $22,000+m.fees at BWV. (From Disney at AKV, it would be $23,800+m.fees+get developer points at SSR) So you are looking at $85,400-$128,100. Advantage of buying in chunks is you can start using it for a week or two - you can borrow from the next year. It would validate where you want your home and spread your expense out. Don't have exact membership fees at hand, but are calculated by point and they are in the $4.80-$5 range for these resorts. So $4800-$7500 per year on 1000-1500 points.

Another advantage of buying in chunks is that you can figure out how many points you need while using it and stop buying and then if you find you need more, you can buy another chunk.