Spreadsheet Warriors - how have you calculated the all in real cost?

[Mousemath]

First and foremost, buying DVC is an emotional decision, but for those who love numbers….. I’ve been comparing resale costs at various properties to assess overall cost and value. Right now I’m looking at the yearly amortization of the initial cost assuming a 4% risk free rate, and then adding in dues increasing over time based on history. How have you looked at this?

It’s quite interesting that doing the math this way it really stands out that dues are way more of a cost driver than initial investment, and the longer deeds hold great value. It’s not hard to run scenarios where the value (relative to current resale price) of VGF is greater than SSR.

Anyone else ever geek out like this?

 

[airjay75]

Oh yes. You should check out this thread: https://www.disboards.com/threads/most-economical-resort-beyond-year-1.3950476/

I think you're looking at it right, although I don't personally get too focused on the risk free rate of return on my money or expected increase in dues because both of those are bit unpredictable. I tend to think, looking at prices and dues today, how much am I going to spend per year over the life of the contract and then I compare resort/contracts on that basis. It is so easy to focus on the upfront cost, but dues are far and away the most expensive part of DVC ownership. I know as I was getting into this, I toyed with resale Vero Beach contracts for a few minutes and, after doing some of my own calculations, quickly realized how that made no sense.

IMO, the best resale values are currently CCV/BLT/SSR (and probably in that order). That said, some people really fall in love with individual resorts where the 7-11 month booking window makes a difference. For those people, paying a premium to stay where you love may well be worth it. And direct points purchases are a bit different calculation too (how do you value the direct benefits?) and then there is also the issue of resale restrictions to complicate decision-making further. No doubt, you can analyze the heck out of DVC purchases!

 

[Chili327]

Anyone else ever geek out like this?

Yes, definitely!!
I just love it when someone does it for me to read.

 

[Mousemath]

Oh yes. You should check out this thread:

Oh wow, that’s my kind of post… thanks for sharing!

 

[Spinster Travel]

I bought in during the great shut down of 2020 and over analyzed just about every aspect I could think of. I still have my spreadsheet and ALL the tabs LOL. When the time came to make the first purchase (I opted for resale first then direct), I felt like I knew what I was signing up for! Have fun with it - the geeking out is the best part of the research process.

 

[Mouseforward]

ChatGTP will run the numbers for you in minutes , you can ask for a breakeven point in years for a disney vacation club contact assuming dues go up 4.5% a year and hotel costs go up 3% a year ( pick your own numbers) - it will then ask you to plug in some numbers as below:

Resort

RIV

Use Year

Oct

Contract End Year

2070

Purchase Price (Total)

$

Points Purchased

Annual Dues per Point

$

Total Annual Dues

Points Needed per Night

23

Hotel Cost per Night (cash)

725 $

Years You Plan to Use

25

It will then create the spreadsheet for you.

 

[reddog21]

People over analyze everything.

 

[Dodgerburt8]

ChatGTP will run the numbers for you in minutes , you can ask for a breakeven point in years for a disney vacation club contact assuming dues go up 4.5% a year and hotel costs go up 3% a year ( pick your own numbers) - it will then ask you to plug in some numbers as below:

Resort

RIV

Use Year

Oct

Contract End Year

2070

Purchase Price (Total)

$

Points Purchased

Annual Dues per Point

$

Total Annual Dues

Points Needed per Night

23

Hotel Cost per Night (cash)

725 $

Years You Plan to Use

25

It will then create the spreadsheet for you.

Keep your chatgtp away from my DVC! Do these llms have to infect every aspect of our lives?

 

[reddog21]

Keep your chatgtp away from my DVC! Do these llms have to infect every aspect of our lives?

When it makes your life easier then absolutely.

 

[Brian Noble]

How have you looked at this?

In addition to the above-mentioned thread, I also like the MouseSavers analysis framework. The thing they have in common: they account for the time value of money, unlike nearly every other "analysis" I've seen.

https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

 

[Brian Noble]

As an aside: Because the straight-division "analysis" is the most common to be found on the Internet, it's also the one that the various plagiarism engines come up with. Which is to say: They are wrong, too.

 

[Stateman]

In addition to the above-mentioned thread, I also like the MouseSavers analysis framework. The thing they have in common: they account for the time value of money, unlike nearly every other "analysis" I've seen.

https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

I understand why people may prefer to analyze the total cost using future cash flow-only considerations. But agree fully with Brian that an accurate cost analysis should include a time value of money component. Otherwise the $ opportunity cost is not considered, but it is real considering the significant upfront outlay by us all and how else that could have been deployed.

But I do believe non-financial considerations are completely valid and relevant to people, including myself. I'm a tax attorney, so spreadsheets and financial analysis are always gonna seem necessary to me (sadly)...but I know that life should not be viewed through only those lens.

 

[VGCgroupie]

First and foremost, buying DVC is an emotional decision, but for those who love numbers….. I’ve been comparing resale costs at various properties to assess overall cost and value. Right now I’m looking at the yearly amortization of the initial cost assuming a 4% risk free rate, and then adding in dues increasing over time based on history. How have you looked at this?

It’s quite interesting that doing the math this way it really stands out that dues are way more of a cost driver than initial investment, and the longer deeds hold great value. It’s not hard to run scenarios where the value (relative to current resale price) of VGF is greater than SSR.

Anyone else ever geek out like this?

Yes I have one that includes dues increases based off historical data. TBH it's shocking and I prefer to not look at it. I prefer to just look at todays numbers and overall cost based off of todays numbers only.

 

[Brian Noble]

But I do believe non-financial considerations are completely valid and relevant to people, including myself.

Absolutely! The way I view this: How do I know if this is really how I want to spend my money if I can't compare it to the alternatives in an apples-to-apples way?

 

[CaliforniaGirl09]

I like the mousesavers analysis as well, but it seems to compare stays a "deluxe resorts" rather than the type of room you are actually staying in other with cash and with your points (edited to add: I was going off analysis since I couldn't download spreadsheet, but point is to take that into consideration). For me, as a VGC owner this was a huge reason I purchased back in 2009 (or 2008 I can't remember--it was the first year). At the time, we were getting two regular hotel rooms or a suite at the Grand. Even back then, the prices were exorbitant. With DVC we mostly stay in a 1-bedroom, which is effectively the same thing as two rooms (since we get the extra bathroom) plus we have a full kitchen. Since you can't rent the VGC rooms with cash, this kind of space is only comparable to the most expensive suites at the Grand--and even those don't have laundry and a full kitchen. When we stay in a 2 room DVC unit, the comparable price to stay in a suite is even more extreme. So for me, the accurate analysis includes the type of room we stay in.

I don't need a spreadsheet to tell me that I've made out like a bandit on this purchase, LOL. I want to say we paid $92 a point. Given that I could resell my points for 2x or 3x as much after 15-16 years of use AND I would cover my dues by a 3-night stay in a regular hotel room ... crazy.

 

[Brian Noble]

it seems to compare stays a "deluxe resorts" rather than the type of room you are actually staying in

This is easy to fix. Just plug in the room rate that is applicable.

(But there is also a comparison to staying at Mods)

 

[mkatsy]

In addition to the above-mentioned thread, I also like the MouseSavers analysis framework. The thing they have in common: they account for the time value of money, unlike nearly every other "analysis" I've seen.

https://www.mousesavers.com/other-disney-vacations/disney-vacation-club/#opportunity

Yup … living with an accountant there is little choice but to analyze it. However, I do like to counter that “time value of money” argument with a robust “good will is an intangible asset” argument (happy wife, happy life), followed by an appendix of any of my spouses assets that have depreciated over our lifetime … still got the green light on DVC.

 

[Brian Noble]

These are not incompatible, and I believe I can ask both "How do I value this?" and "What does it cost?". I am not limited to one or the other.

If I am buying something, I want to know what it costs, and I want to compare that cost to other uses for the money. For things that carry expenses over many years, that requires considering TVOM to be able to get a single "cost" number.

But, that's just what it costs. It is not what it is worth. nor does it tell me whether I should buy it. Those are all separate questions. The cost of the thing is an input to the decision, it is not the decision itself.

 

[Mouseforward]

plagiarism engines come up with. Which is to say: They are wrong, too.

AI engines do the math and spreadsheet setup - basically saving the time of setting up a spreadsheet. they are not "internet sourced"

 

[Sandisw]

We did it the simple math way… just compared the cost to what we had been paying for cash using a 35% discount which was what we were averaging at the time.

Didn’t go father than that! All additional purchases since then didn’t include analysis!

All we know is that what we have spent, what we pay in dues and the amount of WDW trips provided us with what we consider amazing value!!

But lots of others analyze with other factors and the links and info already provided will give you in depth ways to do it too!