PLEASE Convince Me DVC is Worthwhile!

[DebIreland]

I disagree with those who say that if you're comparing dvc purchase to rack rate at a value then you shouldn't buy into DVC. For us, as a family of 5, comparing dvc to even the cheapest value rooms (week nights only in summer) we would need 2 value rooms every time. A trip to WDW every 2 years, staying for 14 week nights (and doing beach/universal etc at the weekends) = 14 x 250 = 3500 dollars. 22pts per night (week nights) with dvc will get us OKW 1 bdr* (more than twice the the square footage of 2 value rooms). It works out at 308 pts every 2nd year so we'd need a 150pt contract (along with borrowing for the initial few trips) which would cost 684 in maintenance fees so 1370 in maintenance fees per trip. Plus, of course, the initial outlay of approx 11500 dollars. By my reckoning (without knowing ahead how much the maintenance fees will increase and, of course, how much the rack rates of Disney resorts will increase) we will break even by the end of trip number 5 so by my 50th birthday we're ahead. And of course, that's comparing OKW to the cheapest possible non-preferred, no frills rooms on property. So there!

* I know that DVC might not always allow 5 in a 1 bd but even to do the comparison with an OKW 2bd, the figures aren't that far off.

 

[mygirl]

You sound as if your mind is already made up.

The values are a nice may to spend a vacation, and you'll feel better inside.

Have fun!

i agree. while you should gather as much info (and the DIS boards are incredible for that) as you can regarding a DVC purchase, it is not something you should need to be convinced of...

 

[dismorgh]

Just throwing another .02 cents in.

We bought last year, and took our first trip home a few weeks ago. We already have a 2 week July trip reserved at SSR, and a trip next June in the planning stages!! We would not have gone 3 times in 2 years without DVC.

Our first trip would have cost us almost $1700. Next trip would have been almost $4,500, and next years would be about $4,500 as well. That's $10, 700 for our first 3 trips, with a buy in of just over $15,000. I know you can make the numbers work any way you want, but it looks good to us!! We will be breaking even in about 4 years, and well ahead in the future.

I would also never look at a DVC purchase as an investment, or using any money earmarked for an investment. It is simply prepaying for a room at the inn. Albeit, a verrry nice room!

Good luck with whichever decision you make! I just wish we had bought sooner!

 

[Mickey'sApprentice]

DVC allowed us to take a trip last year that we couldn't have taken otherwise because of a tight cash situation. We love it.

Good luck with your decision.

 

[toesmom]

You're not wrong. If you are content staying in All-Stars then there is no way you can justify joining DVC. On the other hand, we stayed in an All-Star back in January for the first time in years after joining DVC and I would never do it again. You get used to certain amenities at the Deluxe resorts and it is very had to go back.

We joined DVC because my husband did not want to spend another week in a cramped room at POP. We really are spoiled now with the space and amenities of the DVC rooms. And we did the math, it was worth it for many reasons.

I also forgot that disney charges extra fee for every adult over 18 in the regular hotel room. We forgot to add that into our accounting back in 2004, but the math worked for us.

Of course, we don't have any other debts.

And we did consider the idea of renting points, but I really like to have control over my plans, not someone else, and didn't like the idea of sending money to some unknown person to make a reservation for me. And I couldn't imagine doing that for the next 10 years. I would worry if I was losing my money to some scammer who claimed to make reservation for me.

 

[DougandBeth]

Let me give you some background because I was in the same place you were about 18 months ago. In the past we always stayed off site because the cost was so low and we typically paid $59 per night for a room. In addition we also has to then rent a car of $45 per day. Therefore we were spending $104 a night plus $9 to park everyday plus gas for the rental car. So in reality it was costing us $113 a night. Still a great deal, but at a very low type motel / hotel.

Here is how things changed:
We decided we would like to go to Disney a lot more frequently. Let me do the math for you. We would go 3 weeks a year so at $113 wold cost us $2038 per year. Let's say we did that for the next 30 years and do not take rate hikes into consideration = approximately $61,000

Now with DVC we are staying as much as we want, it's extremely flexible in my mind, we can stay anywhere we want and at much higher end resorts. LAST BUT NOT LEAST AND IT'S THE MOST REWARDING FOR ME: WE CAN BRING GUESTS AND FAMILY MEMBERS!!!! DVC membership costs me $15,000 plus over the next 30 years it would be another $20,250 so in reality we are $25,000 ahead of the game at much higher end resorts, we can go as much as want, we can stay anywhere, we have Magical Express, and most importantly to me I can take as many people as I want on paid vacation!

We have been stayed at SSR for a week, OKW for a week and brought another family, we stayed at BCV for 3 nights, and we have AKV booked for a 2 bedroom in April and BCV again in July bringing another family. Do the math to see what it would have cost us, I did:

$21,465

It's a win for us and no more commando in the parks

 

[DougandBeth]

I just wanted to reiterate one point:

You can bring other people with you, there is nothing more rewarding.

You have to ask yourself: do I have the funds or would I be willing to call my neighbor and say "Hey want to go to Disney? I am willing to pay for your hotel at $109 a night." Would you do this out of your pocket? Probably not and neither would anyone else

Now you have DVC it's not a big deal at all, you have many years to enjoy it!!

 

[BroganMc]

After 19 years, it would be cheaper, yes. But we would still be paying the $1304 annual rate or whatever it has increased to by then. It's just more worth it for us to pay off some of our debt right now. If we pay off our second mortgage, we then have $300 extra per month in a vacation account that would buy a very nice no strings attached Villa at the end of the year.

In that line of thinking it makes even more sense to put all your vacation budget into paying off all your debts.

The main issue here is, as others have said, you're comparing two vastly different resort levels and associated costs.

I've stayed in the All Stars and offsite hotels before. Those trips were "once in a lifetime" deals where I roughed it so I could become a park commando for a few days. When I discovered the timeshare world and those level of accommodations (1 & 2 bedroom apartments), it was like a whole new world. As a result, Orlando has become like a second home to me. I go down a few times a year for several weeks. I get APs (with the DVC discount) and visit parks just to enjoy the landscaping. I've happily left parks just to go back and lounge by the pool at my resort.

DVC is another style of vacationing that is fairly anethemic to a typical All Star/Pop visit. That being said, on principle, I think any timeshare should be paid for outright. It's not a long term investment but a discretionary expenditure. It just makes better financial sense to bare the barest minimum you need for ownership and avoid paying extra finance charges.

 

[javamom]

I agree, that you already seem to have made up your mind.

I boiled it down to this, after crunching and re-crunching:

A) we DO plan to come to WDW every, or at least every other, year anyway. So, we are already likely to spend that money anyway.

B) We are no longer cramming our family of 5 into a moderate, or forced to purchase 2 rooms at a value.

C) We are getting a better room, and a new attitude toward touring and can relax more at Disney instead of trying to cram our "money's worth" out of the rack rates and packages.

D) We aren't signed in blood. If somewhere down the road we decide that it's no longer "for us," we can always sell our contract.

So, we went for it. Heading home in June.

 

[Mtnman44]

Don't forget, at year 20, you could choose to sell your DVC contract, likely for a hefty sum.

After 20 years of staying at values, you won't have anything to sell.... It's just something else to think about.

Example, assuming a 3% annual increase in both DVC Dues and the cash cost of values, after the 20th year, your DVC contract would've cost a total of $58k and the cash spent on the value rooms would have added to $67k. If you had the DVC contract, you could sell it for (purely speculative estimate), let's say $120 per point, or over $33,000 (those are year 2028 dollars, so that amount is not what it is worth right now, but it is clearly more than having nothing to sell after 20 years of paying cash for rooms).

 

[mom2aredhead]

If we pay off our second mortgage, we then have $300 extra per month in a vacation account that would buy a very nice no strings attached Villa at the end of the year.

I too have crunched numbers, and I'm not sure it works for our family either.

But frankly, the above statement would be the deciding factor for me. If I had 2 open mortgages on my primary residence, I would be looking to pay that off before I considered buying ANY time-share product. PERIOD.

And just to throw another wrench in the analysis, you have to remember that the $22,000 you invest now, compounded annually at 2% would be worth about $36,000 after 20 years, and about $48,000 after 40 years.

 

[WALTSAGOD]

So,...I take it you weren't convinced?

 

[dianeschlicht]

But we own our home...

So do most of us who own DVC. I figure owning DVC is like owning a vacation home.

 

[starwood]

My 2 cents.

1. What sold DH on DVC was that if we ever decided we didn't want it any more (fat chance) we could sell it and get back most of what we paid for it.

2. I use my Disney Visa Reward dollars to help pay my annual dues every year. Last year it paid 1/2 of my dues and this year (since I put my remodeled kitchen on it) it should pay most of my dues.

3. The property tax portion of the dues is tax deductible.

 

[The 2 Sarge's]

After a land and sea package that cost us about 10k in travel food and time off our family bought a stack of points. We have used the program five times and love the deal. The point values can be sold like a stock that increased over time and remember the old saying...You can always make more Money you can not make more time.

 

[Brian Noble]

Whether or not DVC works for you depends on what you consider acceptable lodging. If you are happy in the Values, or even (gasp!) offsite, then DVC can't be justified in dollars-and-cents terms. It's really that simple.

For those folks, DVC can be viewed as a way to significantly upgrade lodging quality/location without a significant increase in overall costs, but it's not "cheaper".

 

[PADisFam2]

Wow it sounds like you have all done a good job with the dollars and cents of DVC vs. going it on you own.
Let me just throw one more view out there.
It has to do with why we bought a DVC.
Ya see DW and I work very hard in our careers and sometimes forget we need to take a vacation away from everything (work, home, relatives, ect...)
In Aug. 07 we spent 9 nights and 10 days at CBR, this was our first family vacation ever. (also my first ever trip to Disney) On our last night when leaving Epcot I knew we could never let a long period of time go by with out taking time away for just our family. DVC allow us to do that.
We joined AKV in Nov. 07 and will be getting a new set of pionts every year for the next 50 years.
Our next vacation will be at AKV from 10/28/08 to 11/3/08 in a 1 bedroom Savana view room.
Next trip 8/09 and then 12/10 then 8/11.
I could probally write 3 or 4 pages on the money end of things, but it all comes down to this how much will 50 years of point cost vs. the cost for 50 years hotel rooms.

 

[tidefan]

And just to throw another wrench in the analysis, you have to remember that the $22,000 you invest now, compounded annually at 2% would be worth about $36,000 after 20 years, and about $48,000 after 40 years.

Just a point, but your analysis doesn't take into effect going to WDW (or other vacation) every year. Sure, we could invest everything and sit on a pile of cash, but if you are going to vacation every year, it won't exactly work out your way.

First, your vacation this year would cost you $1500 - $2100 in lodging (assuming DLX or MOD with taxes - don't forget the cost of taxes in your hotel rates!), so your initial investment would really only be $19,900 to $20,500. Now, if you continue the habit, you must subtract this out EACH YEAR, then accrue the interest.

Comparing apples to apples, use the DVC studios (most like hotel rooms) as a basis for comparison. You can do a week from anywhere from 80 to 160 points per year, depending on where you stay. So, your DVC dues for 1 week would be on average, let's say $500. So, at some point down the road, all of this becomes a zero sum game. If it is less than 50 years, then DVC is more economical in the long run.

Now, this happens very quickly when compared to deluxes, a little longer when compared to moderates, and seems to about break even when compared to values. I look at DVC as a way to get deluxes for the price of a value. More of a getting more for my money type of thing rather than saving money that I would have spent anywhere.

What tipped me on DVC is that I can come close to recouping my initial costs if I needed to sell, however, I'm not planning on that anytime soon...

 

[mearjan]

We just recently bought our DVC points at AKV and pretty much like many people have said comparing POP to AKV is an apple to oranges conparison.

Here is why i think its an unbelievable deal moneywise
We can get a 2 BR every year without fail for a week and have points left over. I was shocked when i looked up the rack rate for a 2BR AKV Sav view it was $1400 dollars per day thats 7k per 5 days and we have points left over for a studio next feb for another $1500 so thats $8500 dollars rack rate over 50ish years thats $400k+ not counting inflation or any increase whatsoever.
where else can you get that much of a return on a 20,000 dollar investment

Here is why i think it just makes good sense

We used to go budget all the way every year as cheap as i could get the rooms and for 5 of us it was still $2k no we are paying $2600/year+another 800 dues so for 1400/year its a non issue with the amount of time i spent looking for the bargains and planning. I have already planned 3 trips over the next year and the amount of time i spent planning was minimal to say the least.

I read someone else mention being less and less commandoish on trips and I have noticed that our last 2 trips we pick out things we want to do but its nowhere as hectic as our first 4-5 trips.

 

[YoMickey]

Here is what I would do if I were you.




1)Pay off the second mortgage ASAP, I see nothing wrong with 1 mortgage and owning points outright, but 2 mortgages and financing points is crazy.

2)Save the $300/mo. or so over the next year.

3)In one year pay cash for the smallest resale contract you can afford without financing. I really don't think financing DVC is a good deal. When you add in the interest you're paying, annual dues, and lost opportunity cost of investing the money in something as simple as a money market fund it just doesn't add up. Compare that to paying CASH through DVC or the rack rate

4)This gets you in the door, bank the points and save cash for 1 more year, or take a short trip( split stay 1/2 pts and 1/2 value resort on cash).

5)You now have 25-50 pts. or more, you may also have an additional $3-$4k saved, add on more points and take a trip, or buy and transfer points into your account.

This is how I would do it, but each to his own. We saved...and saved....and saved....and sold my sports car....and landscaped our new house and bought 200 pts at BCV. Wrote a check for both. I wish you well in your decision. I know I agonized over it for a few months. Good Luck