Should We or Shouldnt we?

[Tdisney]

Hello new to the board. Still cant make up or minds if this will be a good financial investment. By becoming a DVC member do you actually save money over time. We would use the DVC no less then once every two years for at least a week. As of now we have been staying at the beach club once a year which is quite pricy anyway. Vacation this year for 3 in a junior suite plus park tickets is around 5000. So it seems like We could make that pretty quickly by joining, but the biggest concern would be hte maintenance points since disney has hte right to increase them up to 15% a year if they wanted to. Now there is noway by the time the contract expires the hotels would be increasing that much as well. So do you really save money by buying?

Any help would be greatly appreciated.


Thanks a bunch

 

[browniemtb]

Hello new to the board. Still cant make up or minds if this will be a good financial investment. By becoming a DVC member do you actually save money over time. We would use the DVC no less then once every two years for at least a week. As of now we have been staying at the beach club once a year which is quite pricy anyway. Vacation this year for 3 in a junior suite plus park tickets is around 5000. So it seems like We could make that pretty quickly by joining, but the biggest concern would be hte maintenance points since disney has hte right to increase them up to 15% a year if they wanted to. Now there is noway by the time the contract expires the hotels would be increasing that much as well. So do you really save money by buying?

Is it a good financial investment.....no. Is it a great investment in the family....yes. You can not look at this as an investment per say, even thought you could possibly make money on a resale. Do you save money, yes, on accomodations. Going every two years would work out fine especially if you buy a small contract. As far as payback....everyone here has their own math. I figure 6 times to WDW would basically make me even. That $5000 you spend when you go, thats what we did the last 3 years and there are more trips on the horizon. So I spent time here on the boards and learned all I could from the experienced owners and finally pulled the trigger. Our first trip to our home resort this past March was fantastic...and the best part about check out was a bill for $0. Granted we have a separate credit card for food and other stuff still. So to sum this choppy paragraph up......DVC will and does save you money on your accomodations. Is it worth it for you to buy in....well that you have to think about, yes there are dues and yes they do increase but that $5000 stay could be cut in half.
Brownie

 

[jonestavern]

We didn't look on it as a financial investment, but as browniemtb so wisely said, a family investment. DH would just never take vacations--previous to 2004, just 1 that lasted more than 2 nights--so now he feels he has to go & he is wild about WDW! He feels our DVC purchase commits him to r & r & I feel that is good for family harmony & great for his health~
Yes, I confess, I am concerned about the maintenance fees--someone here will most likely give you a history on their rising, I know when told, I thought the history of increments is reasonable-If I ever felt uncomfortable re: fees I would simply sell~
What appealed to us was a much nicer room than we felt comfortable spending $$$ on & the wide choice of spots to stay all over the US & the world.
We took our 1st trip to HHI & we will be back

I do know some believe it is better to rent DVC points & that their rental value has not appreciated much in the past few years--perhaps someone will fill you in on this viewpt far better than I'm able. We do like the DVC owners' fringes, though & these would not be available to you as a renter.

All in all, it does have to fit your family. We are happy with our decision tp purchase & just may be adding on within the next couple of years!

Jean

 

[Paging Tom Morrow]

Let's assume two options:

1. You purchase 150 points @ $95 per point. Dues increase 3% a year and after 7 years you elect to sell your membership and get $90 per point.

2. You invest the money and get a return rate of 8% per year, but accomodation that are $2000 this year increase 3% a year for seven years.

Option 1: Your total cost will be $6,141 or $877 per vacation.
Option 2: Your total cost will be $9,186 or $1,312 per vacation.

There are plenty of assumptions built into the above analysis. The 8% ROI may be aggressive, the 3% increase in rack rates and dues, may be understated. It also doesn't account for additional compensation you get for being a DVC member - annual pass discounts, other discounts....

There are 100s of ways of looking at it, but in the end, you own a piece od Walt Disney World - how cool is that?

 

[bcvillastwo]

Investment? After reading hundreds of posts asking whether DVC is a good investment I am getting to the point where I cringe everytime I see the word investment used in conjunction with DVC.

Why? Because so many people take the word "investment" so literally. That's fine, as words do indeed have meanings and it's important to be as precise as possible in word choice.

As the OP has already seen, the conventional wisdom is that DVC should not be considered an investment.

OK, with all of that said, it is entirely appropriate for those considering DVC to run some numbers that would compare "renting" to becoming DVC members. There are any number of factors to take into consideration (such as how often you plan to go to WDW, assumptions to be made (room rate increases over time or DVC dues increases, etc.), and ways to conduct the analysis. I would caution anyone to use the principle of conservatism (an accounting concept) in your calculations. For instance, if you are talking about DVC dues increases or factor future room rate increases estmate a little higher than the facts bear out. Try as much as possible to compare apples to apples. If you tend to stay in moderates then use moderates as your basis for comparing rental to DVC.

After the task is completed you will have two streams of financial data with a bottom line for each stream of data.

There will be some that will tell you to factor in lost opportunity cost (the amount you wouldn't get from investing the money). I think this is appropriate if investing the money was one of the options you were considering. However, if you are pretty certain that your only two choices are (1) rent and (2) DVC then I don't see the point in looking at opportunity costs.

FYI, if we sold our points today we would make money, even though I don't consider DVC to be an investment. But, at some point the value of our points will decline below what we paid for them. However, we are approaching our break even point and from that point forward we stay on property in DVC rooms for just the cost of our dues which I am certain will be less than what on site rooms will cost in the future.

I completely agree with those who say that if you love WDW, you stay on site in at least a moderate resort, and you go at least once every two years--then DVC may be something to consider.

Good luck with your decision.

 

[byoung]

So far DVC point cost have gone up each year. If you bought in in 1992 your timeshare value has gone up a lot. How many other timeshares have gone up?

 

[Dean]

For your situation it is likely a very good deal as long as you don't go heavy on weekends by staying over two weekends and one week. You would then have 2 choices, save money with a studio or get a full 1 BR for about the price over time you've been paying for the junior suite.

 

[WKSumner]

We just bought at SSR. The contract is 12 years longer and we believe there will be more reorts by then including one at Disneyland. We too will go to WDW every 2 years and based on that alone was enough to convince me knowing what it cost us in March to stay at Wilderness Lodge. If you can buy with-out financing I think it is a good deal!

Good luck!

 

[sleepydog25]

As others have noted, there are many ways to look at buying into DVC. For the most part, the numbers you run will likely make the purchase seem anywhere from a fair to exceptional deal depending on how you vacation. The consistent thread is if you do plan on routinely vacationing at WDW over the next couple of decades or so, then you should do no worse than break even. Meanwhile, you have excellent accomodations along the way.

As for the dues, anything is possible. . .though not probable in this instance. If Disney were to begin ramping up the dues each year to the maximum allowed, then the image and stature they have gained in the timeshare world would be for naught and likely be disastrous for their reputation. Once that happens, the whole DVC concept would take a huge hit and likely unravel--not something which one can realistically believe Disney would let happen. Still, you have to make that final step based on what you believe is right for your family. Good luck!

 

[rinkwide]

...so many people take the word "investment" so literally...

investment: Property or another possession acquired for future financial return or benefit.

I think you could argue it either way (like DVC membership itself).

 

[DrTomorrow]

investment: Property or another possession acquired for future financial return or benefit.

I think you could argue it either way (like DVC membership itself).

Yep; IMHO it depends on whether you're focusing on the first bolded term or the second....

 

[gblast123]

[QUOTE=byoung]So far DVC point cost have gone up each year. If you bought in in 1992 your timeshare value has gone up a lot. How many other timeshares have gone up?[/QUOTE]

If you put a downpayment on a house (or any other property) how much would it be worth now?

You would have quadrupled your money on a simple small rental property and made some extra money in hand over the years.

Buying DVC pts are only useful in two situations:
1) you use it for vacations as a substitute for paying for Disney hotels
2) you have money in the bank making 3% interest.

DVC rentals end up giving you about 5-7% depending on how much you pay for points and the maintanence invovled.

Under any other scenario, it is better to do anything else with your money and rent the points as you need them, even if you pay $11-$12 per point.

NEVER BORROW OR FINANCE POINTS - then you are on the losing end of the interest curve.

NEVER BUY POINTS IF YOU HAVE YOUR OWN BUSINESS - putting money into your own business will always yield you more than 7%.

If you do the math, you will see that I am right.

Don't forget. DISNEY HAS DONE THE MATH!!! THEY MAKE ALL THE MONEY!!!

Anyone who thinks that Disney is going to let anyone make money off of Disney is foolish.

 

[bcvillastwo]

Buying DVC pts are only useful in two situations:
1) you use it for vacations as a substitute for paying for Disney hotels (or)
2) you have money in the bank making 3% interest.

I agree with point (1) above. This is the way I looked at buying into DVC. As many of said before, we almost certain that we would be going to WDW at least once a year for a good long time and maybe two times a year since we love the whole WDW experience. So, when we ran the numbers we ran them as if we were renting a moderate and compared the costs of that moderate with the cost of DVC. For us, it made better sense to "prepay" our room rental cost by joining DVC. We were going to be spending the money at WDW anyway and it was pretty clear to us that DVC was the better way to stay on site.

Are we saving money? Yes, we save on our accomodations and now we save a bit on our annual passes.

Are we saving money overall? Probably not, as we have averaged almost 2.5 trips a year since joining DVC so there is extra transportation, food, and other costs that we pay because we go more often.

Do we care? Heck no, we love it. Given the enjoyment we get from going to WDW I have no problem if Mickey gets his cut because it is well worth it to this family.

 

[shantay1008]

Are we saving money? Yes, we save on our accomodations and now we save a bit on our annual passes.

Are we saving money overall? Probably not, as we have averaged almost 2.5 trips a year since joining DVC so there is extra transportation, food, and other costs that we pay because we go more often.

Do we care? Heck no, we love it. Given the enjoyment we get from going to WDW I have no problem if Mickey gets his cut because it is well worth it to this family.

I love this explanation, and it's exactly how our family feels about our DVC purchase (although we're just going once every two years...but the numbers still work out fine for us). We are typically quite frugal, but after staying at the CR for a conference and then at the BCV, we knew our vacation habits were forever changed.

I wish I could remember the person on these boards who described the actual DVC purchase as paying for the buildings and infrastructures themselves, and the dues as paying for the extra things we use each year, like buses and staff and energy costs, etc. This is probably very obvious to most of you, but it helped me not feel like we were paying for our room every year for the next 50 years.

Shannon

 

[rinkwide]

...Anyone who thinks that Disney is going to let anyone make money off of Disney is foolish.

...Sees the sun going down.
And the eyes in his head,
See the world spinning 'round...

 

[FlyingfreeWDW]

[QUOTE=byoung]So far DVC point cost have gone up each year. If you bought in in 1992 your timeshare value has gone up a lot. How many other timeshares have gone up?

If you put a downpayment on a house (or any other property) how much would it be worth now?

You would have quadrupled your money on a simple small rental property and made some extra money in hand over the years.

Buying DVC pts are only useful in two situations:
1) you use it for vacations as a substitute for paying for Disney hotels
2) you have money in the bank making 3% interest.

DVC rentals end up giving you about 5-7% depending on how much you pay for points and the maintanence invovled.

Under any other scenario, it is better to do anything else with your money and rent the points as you need them, even if you pay $11-$12 per point.

NEVER BORROW OR FINANCE POINTS - then you are on the losing end of the interest curve.

NEVER BUY POINTS IF YOU HAVE YOUR OWN BUSINESS - putting money into your own business will always yield you more than 7%.

If you do the math, you will see that I am right.

Don't forget. DISNEY HAS DONE THE MATH!!! THEY MAKE ALL THE MONEY!!!

Anyone who thinks that Disney is going to let anyone make money off of Disney is foolish. [/QUOTE]



I find this post very interesting. For starters let me say tht I purchsed DVC with the intention of using all of my points for family enjoyment not financial gain. I did not care if it was saving me money or not. I simply wanted access to the larger rooms on WDW property. Now, there is some truth to your post but I can't help but wonder this: Aren't you the guy who has over 1000 DVC points? Aren't you also the guy that rents them out? If this is you, what scenario did you use to justify that buy in? You yourself claim that there is far better ways to use your money. You also state that "anyone who thinks Disney is going to let anyone make money of of Disney is foolish." Please clarify this for us and the OP because this seems to be a mixed message on your part.


This is a section of gblasts post on the rent trade board.

" I am a 1000+ point DVC member and I have a new allotment of points. I have numerous references, etc."

 

[dalt01]

OH MY ???!!!

 

[MagikMom]

You can't look at it as a financial investment. You look at it as a prepaid vacation. You pay for your future vacations at todays prices. If you like staying in Deluxe resorts like BCV, those prices are going to keep increasing over time. If you buy into DVC, your point values never change. Buying into DVC should only be for people who plan to visit Disney at least once or twice a year for many, many years.

 

[Dean]

You can't look at it as a financial investment. You look at it as a prepaid vacation. You pay for your future vacations at todays prices. If you like staying in Deluxe resorts like BCV, those prices are going to keep increasing over time. If you buy into DVC, your point values never change. Buying into DVC should only be for people who plan to visit Disney at least once or twice a year for many, many years.

I agree, but you should look at the value of what is returned as part of the decision process. Anyone that simply buys on an emotional decision is making a mistake though there will be an emotional component to any such purchase.