Renting vs Buying, and other questions

[limace]

I've been tossing around the idea of buying into DVC for almost a year now, and am gradually bringing DH with me. We still have lots of questions, so here's a little bit about our family and travel preferences to give you some background.
*My hope would be to start with a small contract, spending under 8K or so, so we could pay cash.
*We live on the West Coast, and have lots of other places we like to vacation (I know! Blasphemy!) so would probably be at WDW every 2 or 3 years. We like to come for a week to 9 days. Although we have a middle-schooler, we're OK pulling her out of school if we have to; preferred travel times would be first week in January, early June, early December, or late August/early September.
*We will soon be a family of 5. I know we can swing it for a few more years in a studio or one bedroom but we would probably need to or want to upgrade after that. We do occasionally like to travel with extended family.
*Our plan right now is to do an exploratory trip to the world (DH has never been) in early January for my 40th, hopefully renting a reservation, to check it out before we buy.

Questions:
-DH asks why we wouldn't just save our money, and rent points when we want to go. I wasn't really able to convince him with hard data about why that eventually will cost more money. Do you have the facts for me? How did you decide to buy vs. rent (if you did)?
-I don't have my elaborate notes in front of me, but it seems like I figured I could buy 90 points (if such a contract could be found ever) at BLT, 75-90 at AKV, or 75-90 at OKW for the amount we're looking at spending and have some options for every two or three years (traveling in low season). Any feedback or opinions about that choice?
-How bad is that first week in January really? I was thinking that it was a low-crowd time, and it's the week of my birthday (plus a short school week), but now am learning that the second weekend is mobbed for the marathon. Would you skip it? Are the attractions less likely to be shut down for refurb/parks open late due to crowds? We aren't fans of crowds, but hate really hot weather more.

I'll have many, many more questions, but thanks in advance for your patience.

 

[Crystal_27]

Questions:
-DH asks why we wouldn't just save our money, and rent points when we want to go. I wasn't really able to convince him with hard data about why that eventually will cost more money. Do you have the facts for me? How did you decide to buy vs. rent (if you did)?
-I don't have my elaborate notes in front of me, but it seems like I figured I could buy 90 points (if such a contract could be found ever) at BLT, 75-90 at AKV, or 75-90 at OKW for the amount we're looking at spending and have some options for every two or three years (traveling in low season). Any feedback or opinions about that choice?
-How bad is that first week in January really? I was thinking that it was a low-crowd time, and it's the week of my birthday (plus a short school week), but now am learning that the second weekend is mobbed for the marathon. Would you skip it? Are the attractions less likely to be shut down for refurb/parks open late due to crowds? We aren't fans of crowds, but hate really hot weather more.

I'll have many, many more questions, but thanks in advance for your patience.

Okay, I'll try and help you out with regard to your DH's questions.

1. This question is honestly a very valid one. Renting points is a significant savings and the big draw of DVC's "money savings" is really tageted at those who stay in Deluxe accommodations and who pay rack rate for those accommodations. So, obviously, the break-even point when you're paying $300/night for a hotel comes a lot sooner than if you were renting points and paying the equalivalent of $150/night. And, while there certainly is a savings when you buy DVC, a smart vacation planner searching for deals can probably do as well or better if they shop around for deals or rent points. Also, when you consider that your annual maintenance fees in the equation, in the slower economies, when deals are aplenty, it's more difficult to justify any cost savings with DVC. However, Disney is going to keep increasing the rack rate for hotels so, at some point, you will break even.

2. Remember, with regard to BLT (with the exception of very few resales), you will be required to buy the minimum 160 points through Disney, unless you can get very, very lucky in finding a smaller contract via resale (which, in my opinion, is not very likely at this time). Certainly, though, there are smaller resale contracts for sale at the other resorts and, when travelling in the slower seasons, you will use less points, which is good. But, also keep in mind that the studios only sleep 4, so, with your soon-to-be family of 5, you will need a one bedroom, which is going to cost roughly double the points. Still, you may find that, at least for the first few years after the baby, that you can bank/borrow enough points for the one bedroom for several years to come, especially since you're only planning on going every other year.

3. January is still considered "slow season" and is a great time to visit the parks. There will always be various refurbishments, but, especially with DVC, you will have an excuse to come back to Disney for many many years to come - LOL. Also, if you are worried about crowds, use one of the tour planning websites (Tour Guide Mike is my favorite) and you'll be fine. Disney is never not going to be crowded, but if you learn how to navigate the crowds, you will be fine.

Hope that helps get you started. Any other questions?

 

[logan115]

For us I figured the break-even is anywhere between 10-14 years - but it really depends on how you use it.

We just bought 160 points at SSR (resale) and paid about $12K all in. If I took that money and invested it and received a 10% return (post-tax and a VERY generous assumption - I'd love to have my 101K do that ), and used that to rent points, I'd run out of money in about 10-14 years and be at square one. Buying DVC with the $12K and paying MFs for the same period would get me the same vacations. I would've also paid about $7-8K in MFs over that period BUT I also own my membership, so if in 10-14 years my points are still worth $7-8K than I did ok - paid $7-8K more, but also own something worth $7-8K that I could sell.

What is also important (to me at least) is being able to be in control of our own ressies. I place no value on any other "perks" as I don't really expect that we'll ever get APs and that's the biggest one I see. We (me, DW, DS (5) and DD 6 mos) plan on going 2 out of ever 3 years for the next 15 years or so. Our next two trips (2010 and 2011) will be us + one set of grandparents and we'll be getting a 2BR. When I considered renting 300 pts per trip at $10 per point, that's $6K I would spend and have nothing to show for it, so I almost look at it like I've "paid" for 1/2 of my membership with these trips.

There's a thread somewhere here called "Spreadsheet Fun" or something like it, do a search and take a look as there will be tons of comparison and more of the info you're looking for.

Chris

 

[Deb & Bill]

Early Jan is usually busy with left over holiday guests and the Disney Marathon that usually occurs the second weekend in January. Early Dec is also a very popular time for members so you need to book at 11 months out at your home resort. Early June is when we like to go (right after school is out) and not too busy. Late Aug and early Sept is also a pretty good time to go.

Renting VS Owning? I think the price of a point is way too high. If we were just considering buying now, I don't think we would do it. We bought our first contract in 1997 and paid about $50 a point for our first 175 points. If I had to pay $112 a point now, I wouldn't do it. Especially with the big increase in DVC members since we first bought. If you could find a member who would make that reservation for you and you pay the member on a regular basis (especially only every two or three years), that's what I would do.

 

[disneynutz]

If you are not a Disney fanatic, who wants to vacation at a DVC property every year, then I would have to say that ownership may not be for you.

As a owner you have invested a lot of money up front and Disney has you locked in for many years. They have recently changed several of the rules that have, for the most part, been beneficial for Disney and not the Members. Members don't have a say and Disney is pretty much free to do what they want.

You may loose money should you decide to sell. We own several contracts and right now we are down around $8,000 from our original purchase price. It all depends on the economy and the perceived value of the DVC.

Many forget that they will still pay a couple of thousand dollars per Disney vacation for tickets, dining, transportation and other expenses.

For some DVC makes sense, for others renting may be a better option.

 

[joeytdog]

I am a big believer in renting, as I have rented the past few years and continue to do so.

The easy way to look at is the cost for rental is $10pp and the MF's are $5pp so you pay $5pp more to rent than to own. 15 years at $5pp is $75 so your breakeven as another poster said is in that 10-14 year range on a resale contract

So why would I buy if the brekeven is 10-14 years, well I would have to finance it and to finance it the breakeven doubles to 20-28 years. So basically say 24 years.....2009 and that puts us in 2033. So I would get 14 years of free vacations, but I am sure some math guru can tell you you would actually lose out because of what you could do with your money in the meantime.

I dont know, it is a personal decision, but for us, and we go every year, stay about 10 nights in a one bedroom, we always rent and I dont think, unless I somehow come into an extra $20-$25k that we would buy

There is nothing worng with renting, as long as you find someone you feel comfortable with (very easy to do) and can plan ahead (and you dont have to even do that really)

I have rambled on enough

Bottom Line: I think you would be better off renting or at least renting for a trip or two before buying

JIMO

 

[limace]

Thanks, everyone, for your really helpful posts. Keep 'em coming. A few points of clarification/follow ups.
-I definitely DO consider myself a Disney fanatic and would happily do a vacation there every year. Since we're on the West Coast, though, we'll hit DL at least half time. We are happy offsite there, and feel the GCV point costs are way too high for us to buy there.
-we both get 5-6 weeks of vacation a year so can hopefully to a Disney vacation and some other kind of travel, money permitting.
-we really like being able to cook most of our meals in the room, esp when traveling someplace like Disney or Hawaii, where the food is either overpriced and/or not fabulous.
-we don't plan to finance this purchase.
-I'm thinking we could afford 90 points at AKV and do a 1 br every 2 years or a 2 br every 3, or 80 points at OKW and do the same. Any thoughts? Are those hard rentals to get in the off-seasons I mention above?

 

[circhead]

This thread
http://www.disboards.com/showthread.php?t=2137102 was done by a real math whiz. He shows about 12 different scenarios and what your break even point is. I think it will be very useful when I try to convince my hubby it's time to add-on.

Good luck with your decision.

IMHO buying is a better decision if you're a Disney nut at least your room is paid for in today's dollars and does not have to be part of your vacation budget. The rental price averages about 10-12 dollars per point now and is bound to go up as the price of accomodations goes up. If you rented 150 points at 10 per point for 5 years (no inflation here - not sure what size room that is) 150 x 10 x 5 = 7500. even at 112 per point (through Disney, you don't have to pay that go to the operations portion of this forum and you can get the name of someone to sponsor you for the member referred discounted rate) that's 67 points. (With the current discounts you'd pay about 98 per point or 70 points).

You could buy from the resale market for about 70 - 85 per point depends upon the resort and get nearly 100 points for the same money as renting points and then you don't have to worry about the cost of points going up. Look at Everyday Adam's spreadsheet - it can probably answer a lot more questions than I can.

Pat

 

[christa112]

Not to talk you out of renting, but I am curious why even bother renting points. You are talking about going when it is Value Season and Disney usually offers pretty good deals during that time. This past Jan was buy 4 get 3 free plus a gift card. Aug/Sept is usually Free Dining. To me you could stay in a Value or Mod for a fraction of the cost.

Just curious.

 

[jlewisinsyr]

Also remember, renting comes with risks, most are muted but there are bad apples, even with people who have been good all along.

 

[limace]

Not to talk you out of renting, but I am curious why even bother renting points. You are talking about going when it is Value Season and Disney usually offers pretty good deals during that time. This past Jan was buy 4 get 3 free plus a gift card. Aug/Sept is usually Free Dining. To me you could stay in a Value or Mod for a fraction of the cost.

Just curious.

Fair question. I've stayed in a mod before and liked it, but that was before kids. As I mentioned above, we'd love to have cooking abilities. In addition, in a few years we'll outgrow one room and will either need to rent two or go for a suite. I think we'd then be looking at spending at least as much as renting-or close but not as nice rooms. I could be way off, though.