The "catch" to DVC

[Albytaps]

Ok guys, I really hope this doesn't start any arguments, I just want to get the low down dirty on the DVC stuff.

I recently bought into BLT and am happy to be a DVC member, same goes for my wife and my kids will soon hopefully realize into the coolness of what we bought (it'll be our first trip in Nov.) In the long run it will be a great way to spend our hotel accomodations for the next 50 years in Disney.

What nobody seems to harp on so much are the yearly fees/dues/taxes. This is the "catch." They multiply every year from now on. Why worry about the 20,000 thousand you just spent when you have to worry about the 50,000 you're about to pay over the next several years. I estimate my last 10 years of DVC I'll be paying roughly 5000 dollars a year!

I guess you can always sell, but how does that work? This is a question that never got answered before I bought into it. If I can't afford to pay anymore in the future, can I just drop it or what?

Sorry for the crudeness, but I'd appreciate some feedback on this issue.

 

[tjkraz]

What nobody seems to harp on so much are the yearly fees/dues/taxes. This is the "catch." They multiply every year from now on. Why worry about the 20,000 thousand you just spent when you have to worry about the 50,000 you're about to pay over the next several years.

You are also getting use of the accommodations every year so you are getting value for the dollars paid.

I estimate my last 10 years of DVC I'll be paying roughly 5000 dollars a year!

40 years ago the average annual wage was $7500. That's what happens when we live in an inflationary economy. Sure gas used to be $.50 per gallon and candy bars were $.05, but wages were also much lower.

Annual dues pay for the operating costs of the resort. Dues will only go up if Disney is required to continually pay more for employee salaries, benefits, taxes, fuel costs, insurance, etc.

In other words, if dues are actually $5000 per year in 40 years, you will (should!) be earning a salary much higher than you are today.

I guess you can always sell, but how does that work? This is a question that never got answered before I bought into it. If I can't afford to pay anymore in the future, can I just drop it or what?

DVC is a deeded real estate purchase. You can no more walk away from the DVC contract (and its obligations) than you could walk away from your primary home. If you abandoned your house, you would still be required to pay for upkeep (as required by local codes), property taxes, etc.

There have been situations where DVC has worked to assist owners who could no longer afford the points. But I wouldn't expect them to be quite so cooperative as contracts are winding down. Legally you are obligated to pay the dues as long as your name is on the deed and Disney can take appropriate action to collect any monies due.

 

[bumbershoot]

What nobody seems to harp on so much are the yearly fees/dues/taxes.

What do you mean? "harp on" usually means something like nagging, or going on and on... While I don't see people doing THAT about dues, it's something mentioned in the threads that I've seen and participated in when people ask if DVC is for them. People will mention the dues, as they are indeed a big part of the financial picture going down the road.

I'm super sorry that it seems you didn't see those mentions made of it.



In the future if you can't do it anymore, you can sell it...

 

[Sandisw]

I don't remember who posted it in another thread, but the related the MF"s fees and what the eventually cost over the course of a contract to worrying about what your weekly coffee at Starbucks would cost in 40 years down the road.

Things do go up and that is a factor. But, if MF's are running $5000 a year, then what it will cost to stay at WDW will be much more than that so it is all relative, IMO.

We all knew going in that once the original amount was paid (whether up front in cash or through financing), your vacation would be the cost of MF's plus the extras--food, tickets, transportation and such.

If you decide at some point, however, you don't want it, you can sell it on the resale market. Right now, DVC seems to hold value pretty well as a timeshare, but who knows what the future will hold and it may or may not be something that you can recoup any of those initial dollars.

 

[3DisneyKids]

There are also many folks who rent their points for a year here or there when money is tight--not only is it extra cash, but it will pay your dues for the year and then some.

Look at today's numbers. Dues are about $4 per point at the cheaper resorts. The average rental price is $10 per point. So if you really can't swing your dues, just rent 40% of your points and that will cover your dues. And you will still have 60% of your points remaining for a shorter stay. Or if you can't afford to go at all, then you rent all of your points--again, 40% will cover your dues for the year and the remaining money will go in your pocket to help you out during a tough time.

 

[vicki_c]

I don't see it as a "catch". Everyone here on the DIS that advises people on DVC makes it a point to say that your annual fees will far, far outweigh the original purchase price. And I was told that (in less ominous terms, I'm sure) by our guide when we toured as well. So it's not like anyone's trying to hide it.

It's not a magical product - it's a timeshare, so I don't see the annual fees as anything I would consider sneaky or a "catch".

The only catch I think there is (and I don't really think it's a catch as much as something people don't always think of - including me) is how much it still costs you to go to WDW on a regular basis, even when your room is paid for by points. Tickets, transportation, eating, etc. That part is way more expensive than your annual dues.

 

[PoohNFriends]

The only catch I think there is (and I don't really think it's a catch as much as something people don't always think of - including me) is how much it still costs you to go to WDW on a regular basis, even when your room is paid for by points. Tickets, transportation, eating, etc. That part is way more expensive than your annual dues.

These costs definitely do add up fast. I am helping a friend plan a trip which includes renting her some points for less than $6/point so her cost for using 100 points would be $600 (but split with someone her share is only $300). But then add on $200 - $225 for airfare, park ticket for 5 days $235 (for basic MYW thru Undercover Tourist) + food which could anywhere from a PB&J week to dining plan + tips. Maximum estimates she's nearing up to $1000 just for herself. Fortunately, $300 for 5 nights is less than she would pay at a value plus she's getting a better room.

Anyways, all that just to say people considering DVC really do need to think about these other costs besides just $ to buy in and MF's.

 

[ToddyLu]

I have to agree with you guys....the $1000 or so that we will pay yearly is so much better than getting a value room (not knocking them as we have enjoyed those resorts over the years) IMHO. I knew that buying in. We have decided to make Disney our definite yearly vacation with other small trips thrown in. The last time we booked at Pop in 2008 on the DDP our 10 day trip was about $2200 if I remember correctly. So if I use say $1000 of that as my MF for points at AKV, that leaves $1200 for tickets and food...not too shabby.

Every thing has a glitch....including free dinning which really isn't free.

 

[ChiSoxKeith]

If you had a guide that was worth anything, they clearly spelled out the dues to you when you signed up, so it isn't a "catch".

If at some point the dues get to high, you can always sell your DVC contract.

Each of us has our own reasons for buying in, and I'm sure arriving at your DVC was a long process. One of the most common things I see on this board is (and it goes for me too) "we wish we bought earlier".

Do I know what does are going to be like in 2054 (my BLT contract runs to 2059)? No. Do I care? Nope. Heck, I'll be 82 in 2054 if I'm still alive and kicking.

What I do care about was the trip I just took over Mother's Day weekend where everyone (including my two stepkids that are off in college) could be there. I care about holding our DD3 during Wishes with tears rolling down my face (we adopted DD3 after our solo anniversary trip in 2006 - she was our wish the final night of the trip and it came true). I care about the trip that me, DW, and DD3 are going to in December so we can see Disney World decorated for Christmas. And I care about the trip we'll take in 2011 to Disney World on DD3's birthday on Halloween.

The memories are what is going to matter. Not how much I paid for it.

 

[ToddyLu]

What I do care about was the trip I just took over Mother's Day weekend where everyone (including my two stepkids that are off in college) could be there. I care about holding our DD3 during Wishes with tears rolling down my face (we adopted DD3 after our solo anniversary trip in 2006 - she was our wish the final night of the trip and it came true). I care about the trip that me, DW, and DD3 are going to in December so we can see Disney World decorated for Christmas. And I care about the trip we'll take in 2011 to Disney World on DD3's birthday on Halloween.

The memories are what is going to matter. Not how much I paid for it.

Oh ChiSox, you had me at "hello".

 

[LIFERBABE]

There's not 1 thing we own that does Not require maintenance fees I look at DVC dues as any other purchase such as a car, boat, home etc. Nothing is without costs.
DVC is much cheaper to maintain than a Florida vacation home and I don't look at the fees as a rub or catch.

 

[stichy]

DH did a spread sheet before he would agree to buy. I know he's such a dork. He figured in a 4% increase in dues. I think the total price he came up with was a little over 100k for inital buy in and dues over 50 years. He also averaged it per day stayed at DVC. It came out to an average of $95 per night. Not bad for a deluxe stay.

 

[Lynne M]

I wouldn't call it a 'catch', any more than I'd call having to pay utility bills and property taxes for my house a 'catch'. It's a timeshare - we share ownership, and we each pay our share of the operating costs of the resort. That's what the maintenance fees are. Housekeeping, general maintenance, utilities, real estate taxes, landscaping upkeep, that sort of thing.

Increases are capped at 15% a year, and in the nearly 10 years I've owned, it's been 3-4% a year.

When you buy DVC, you have to look at the whole cost to see if it's a good value for you. Look at the buy-in cost and the maintenance fees, and compare that to the cost of a cash reservation for a comparable room/villa.

And remember, while maintenance fees will go up each year, so will the cost of a cash reservation at a resort. In your last 10 years of DVC, what will a cash villa reservation cost? I'd bet it'd be a lot more than $5K, for what your points will get you in a comparable villa.

 

[disneynutz]

IMHO the biggest catch is that I don't see most members keeping their contracts for 50 years.

That's a long time to vacation at the same place. Who knows what Disney will be like in 5, 10, 15, 20, or more years down the road? At what price will Disney exercise ROFR? Who will own Disney and how will it change?

Bill

 

[SFD998]

The only thing I "caught" is that dreaded disease "add-on-itis". 3 times so far and counting

 

[chalee94]

I guess you can always sell, but how does that work?

you'd call a broker like the timeshare store - you can see where resale contracts are currently pricing by looking at the link in the top right-hand corner of the screen. the seller is usually responsible for a 10-12% commission.

If I can't afford to pay anymore in the future, can I just drop it or what?

if you still owe DVC money on a loan, they can foreclose on it and just take it back. unless you are very early in a loan, you'd be better off trying to resell it. if the value crashes completely (as many timeshares have done), you would still be responsible for maintenance fees through the expiration date if DVC is not willing to take it back.

but i'd agree with the others that your "catch" is mostly silly. if you went to disney in the 70s and paid less than $20 per day for a ticket and about $40 per night to stay at the contemporary, you'd probably think no one would go to disney in 2010 if they were trying to charge $80 per day for a ticket and $200-300 per night at the CR... if you are paying $5000 in dues in the future, what do you think a room at the GF or BC will run?

 

[dmoore22]

Ok guys, I really hope this doesn't start any arguments, I just want to get the low down dirty on the DVC stuff.

I recently bought into BLT and am happy to be a DVC member, same goes for my wife and my kids will soon hopefully realize into the coolness of what we bought (it'll be our first trip in Nov.) In the long run it will be a great way to spend our hotel accomodations for the next 50 years in Disney.

What nobody seems to harp on so much are the yearly fees/dues/taxes. This is the "catch." They multiply every year from now on. Why worry about the 20,000 thousand you just spent when you have to worry about the 50,000 you're about to pay over the next several years. I estimate my last 10 years of DVC I'll be paying roughly 5000 dollars a year!

I guess you can always sell, but how does that work? This is a question that never got answered before I bought into it. If I can't afford to pay anymore in the future, can I just drop it or what?

Sorry for the crudeness, but I'd appreciate some feedback on this issue.

You buy a house you pay property taxes which pays for services provided by the municipality. You purchase a car you pay personal property taxes which covers the costs of road maintenance/sidewalks. You purchase a condo you pay property taxes/condo association fees which covers services. The tax portion of the MFs is a tax deduction should you itemize. Depending upon how your purchase is financed the interest is deductible. The "catch" is being dumb like a fox while enjoying the Disney magic.

 

[Camping Griswalds]

DH did a spread sheet before he would agree to buy. I know he's such a dork. He figured in a 4% increase in dues. I think the total price he came up with was a little over 100k for inital buy in and dues over 50 years. He also averaged it per day stayed at DVC. It came out to an average of $95 per night. Not bad for a deluxe stay.

I love when people figure these things out and it makes me feel like I got a steal!

For us, the absolute best thing about DVC is that we have vacationed more. Because we have the points, it forces us ( not really, but it does work) to go and spend time together. We have taken my daughter with just hubby and I, I have taken her on some Mommy and Daughter trips, we went as our family of 5 and then just husband and I. I know I am guaranteed this for as long as I am alive and want to use it. I see the MF fees as LESS expensive than my cell phone bill. And I hate that bill. And its a bill none of us had 20 years ago, so who knows what bill we will all have in 20 years? And I like that some pennies are tax deductible. NOTHING on my cell phone bill is.


Curious though, if DH and I die, and our kids don't want DVC what are their options? Can they just "let it go?" or will they have to sell it?

 

[bytheblood]

I have to agree with you guys....the $1000 or so that we will pay yearly is so much better than getting a value room (not knocking them as we have enjoyed those resorts over the years) IMHO. I knew that buying in. We have decided to make Disney our definite yearly vacation with other small trips thrown in. The last time we booked at Pop in 2008 on the DDP our 10 day trip was about $2200 if I remember correctly. So if I use say $1000 of that as my MF for points at AKV, that leaves $1200 for tickets and food...not too shabby.

Every thing has a glitch....including free dinning which really isn't free.

 

[DenLo]

The only catch I really notice is that by joining the DVC we have now committed ourselves to vacation at a DVC property at least every other year, if not yearly. In the past we rarely went to WDW as we thought the vacations were too expensive as we preferred to stay on property at a moderate resort. We found we could do 10 to 14 day cruises for less dolllars than we were paying at WDW for a 5 day stay. Somehow we never got the fabulous discounts on a WDW room. Now after joining the DVC, the 14 day cruise will cost us more. BTW we always compare total costs for each vacation, not just the accommodations.

Perhaps a Disney Cruise will be in our future.