Possible Buyer - Is it wrong to think about it this way?

[Stichey]

Hi!

My family is considering purchasing interest in DVC. I have read the various posts within this great board, but near as I can figure it, the club is essentially a large buy-in amout for the ultimate right to take vacations for the next 40+ years at the cost of your fees.

Here is my thinking, if I were to buy in at about 150 points, it would cost me (ballpark figures here), $12k plus closing (about $500). In addition to that buy in, I am obligated to pay for the fee charge equal to my points (about $700-$800 points). Once that initial chunk is all paid, then the real value of the DVC is being able to have the deluxe Disney accomodations year after year for the fee amount (again $700-$800).

Yes, I'm still liable for the cost of food, transportation and park admission (at a discount), but lodging from that point on, is greatly reduced.

So, is that sound thinking, or am I missing something? Even with DVC framed in that manner, I still think that it is a benefical venture, since we do really enjoy visiting the Disney parks in both California and Florida and the ability to have tremendous accomodations is worth the $800 for the next forty years. We do like the more upscale accomodations like the Grand Californian or the Old Key West, so most vacations will cost us more than that. In addition, the flexibility of deciding when we want to go and the ability to increase the size of our accomodations (while expending the proper amount of points) is perfect, but again, all of you that actually own interest in the club would know best. I would love to hear any thoughts on this matter. From the reading I have done, it is obvious that this is a thoughtful group that performed a considerable amount of research before purchasing. As a non-number cruncher, again, I would love to hear anyone's insights into this matter. Thanks in advance!

 

[Bottlejet]

Actually you have really hit the nail on the head! However you could save the up front costs and just rent DVC points. It's far less expensive. Remember DVC is not an "investment". Our family stayed at a DVC property last week for about 60% of the going rate. Make your money work for you, not the DVC.

 

[vernon]

Your logic and understanding is reasonably sound. I disagree with botlejets summary of the situation, in that I think in the longterm your money works best by buying into DVC not paying on a year by year basis. I feel there are special circumstances that account for some of the good deals available at the moment and that longterm it will work out more cost effective tobe member, but that's up to each individual to do their own costing

 

[Dean]

Only buy in if you want to go to WDW most every year and staying on property is something you'd pay for. Even then it doesn't work out well for long weekends.

 

[Beth]

Bottlejet's logic might be sound if you intend only to take short stays, lasting only Sunday thru Friday but, if you intend to take longer stays which would include Friday and/or Saturday nights, renting is no longer that much of a savings over just paying cash.

If your stays are going to be longer than for 5 nights, investing in DVC would be the better option, IMHO.

You have grasped the concept beautifully, by the way...

- Owners since '97, no regrets, need more points......

 

[poj7]

I was laughing to myself because your method of deciding/rationalizing buying in to DVC was exactly the same as mine. I'd be happy to give you my thoughts on DVC. We bought in Sept '02 when we were visiting WDW and paying cash at BCV. Let me know if you want to talk further about this.

Paul

 

[dbond]

Your logic is exactly how we approached our purchase in 1997. However, we have since added on twice because we love it so much. You'll hear many different rationale's pro and con, I get a chuckle out of the accountant's in the group and the way they crunch the #'s. We justify our "investment" 2 ways, we have invested in years and years of memories for our family and their families as they grow, and second our initial cash "investment" is now worth about 20% more. I haven't had that kind of return on my money anywhere else in the last few years. I don't know if that value will hold up over time, but the same holds true for where the rest of our money is invested, but I do know that the memories we are creating are priceless and the opportunities are endless and that's enough for me.

 

[KNWVIKING]

Can bottlejet guarantee you points will always be availible ? when you want to go? or what thier price will be in 20 years ? As a DVC member your only real variable is the cost of dues, but you have 10-11 yrs of OKW dues history to see that increases have been minimal-some years actually decreased. I want to be at WDW three times a year, and DVC is the best way for me to do that.

 

[vbfamily]

FYI-I'm sure you know this but your fees aren't set for the next 40 years.

I couldn't tell from your post if you knew that or not.

It doesn't look like it has been or will be a problem-some go up 2, 3, 4% a year and I guess a couple times they have actually gone down.

They are capped (sp?) at 15 or 20%-DVC can't raise them more than this each year.

Just wanted to make sure you knew this. We tried to figure the cost of the annual fees over the next 40 yrs based upon them going up 3% every year-I think that was rather conservative and it gave us a good indication of where the yearly fees may be in 10 or 20 yrs.

 

[GAIL HAYDEN]

Just a couple of points here.
There are no closing costs and the only admission discount at this time is for the UMP and that is at 10%. You do get some discounts here and there, but, that would not be a reason to join DVC.

 

[todsue99]

I like your thinking. We bought into DVC for one reason and one reason only. I would not pay the kind of money it cost for 40 years to stay in a two bedroom at any of the resorts. I know all the number crunchers out there will laugh, but buying into DVC makes me go on vacation at least once a year (3 times last year to WDW) and stay in a very nice place. If I was not a member I would be looking for places off site or still Camping. We loved the camping, but it wasn't what we wanted to do for 40 years. The intial cost is hard to take, but I think it will pay for itself in the long run. Just my thought.

 

[poj7]

Tod,

I couldn't have said it better myself. You can think this stuff to death but the bottom line is that we love the place and it makes it so easy to go and when we go we really get to enjoy it the way it was meant to be enjoyed.

Paul

 

[lacool]

Tod, I am a number-cruncher by trade, and your reasoning exactly why we bought in to DVC. We could have stayed elsewhere cheaper, but could not have come close to the DVC accomodations. And now we are required to vacation at least once a year -- or, if we miss a year and bank, in extreme luxury that we would never, ever have done if we had to pay in cash. We like to live well on vacation, and now we will for the next 40 years. Sounds like a logical investment to me!

 

[TandyR]

I am with Tod, Paul and lacool. My DH is a computer programmer and I am a stay at home mom and we have two DDs. It wasn't until we bought into DVC did we start taking regular vacation and planning them and going on them. Before we would talk about vacations, but never take them. We know now we will be going on vacation to WDW at least every other year. It might not be the best financal investment, but it is a wonderful investment in our family and our sanity. (said looking out my window with the snow falling and a ton of snow on the ground.)

 

[todsue99]

Glad see everyone seems to agree. One more note: It makes you plan ahead for vacations and there is nothing better than counting down to the next one. People at work hate you for it, but sometimes it gets you through the tough days. I don't think I am alone on this either, just look at all the count downs on the board. My only problem is I don't have my next one scheduled yet.

 

[Stichey]

Really, I cannot express how grateful I am for each and every insight shared. This can be such a large decsion for my family or any other, I simply wanted to be certain that my reasoning was sound.

To respond to some of the questions that were raised, I should have explained that I was looking into purchasing a DVC share from an individual selling their's and that is why I mentioned closing costs. Based on a casual look, it seems like there might be some advantages in purchasing from an owner over Disney (although without doing any real research, it seems like Disney is doing the same).

If it wouldn't be an imposition, I was now curious if it made more sense to try and obtain a package with a lower fee amount (due to the home resort) over a higher one since all are available anyway (aside from the four month difference in making reservations between home and alternate resort)?

Regardless, thanks to everyone who replied. I do so appreciate it!

 

[Dean]

Originally posted by Bottlejet
Actually you have really hit the nail on the head! However you could save the up front costs and just rent DVC points. It's far less expensive. Remember DVC is not an "investment". Our family stayed at a DVC property last week for about 60% of the going rate. Make your money work for you, not the DVC.

I don't really believe this is the case in the long run and we have discussed this before. At the risk of getting censored, your approach rubs me the wrong way. Maybe it's because I know you were talking down the price before saying you could consistently rent for $5 pp or so.

 

[todsue99]

I agree Dean, but Bottlejet might be correct if you are going to do it once or twice and don't really care where you stay. If you want to have control and go on vacation every year then we are talking a whole different story. I want to go to Disney every year or some place else with similar quality and DVC makes me do this. Or maybe 3 times like last year. To say again what I did before It makes you stay in very nice places. Let me see, I have been to Disney camping in a pop-up trailer 6 times and now I stay in two bedrooms. Which do you think is better? Don't get me wrong I like the camping experience and will probably do it again, but the two bedroom is so much nicer. The biggest thing with Disney is the cost of tickets. If we can get DVC to get us a discount now that MKC is no more. It sure is nice to dream anyway.

 

[Cruelladeville]

We bought into DVC because Caribbean Beach had gone up to this un-Godly rate of $163 per night, and it finally penetrated my thick skull that I was paying $1630 plus tax every year, and, at that rate I could have DVC paid for in 6 years, and actually own something. I didn't even consider--at the time--that DVC accommodations were so much nicer, for me it was $$. Later on I realized that I had done something REALLY good when I had bought in, and I have become even more excited about it over the years.

 

[Lilly's Dad]

Just as when buying a car you should keep in mind how much it will be worth when your ready to trade it in "salvage value"); you need to realize that your DVC property investment will probably bring you back 80-90% resale when you're ready to sell it. Current conditions considered, of course. Naturally, some Arabs scare (the "T" - word) people in Disney all values are anybody's guess.: we're all in trouble.