Trying to figure out how much it really costs for DVC

[Tink6666]

Any help would be great.... I have wanted to do a DVC for 3 years now, but have not been able to figure out the real cost per month or per year. My ideal points would be equivalent to a 1 week stay per year in a 1 bedroom. Can anyone who has recently purchased either through Disney or Resale tell me about how much it would cost per year if we did a 10% down payment? I am estimating needing 250 points per year or do a little less (200) and go at a less busy time of year. I would try for AKV since it is the newest with the longest lease time.

Thanks in advance for any help!

 

[cobbler]

You can tweak and modify any calculations by going to bankrate.com and plug in the necessary number. Then just add in your dues and you are good to go.

 

[ChelleinNC]

I can tell you that we bought 250pts at SSR in June 07. We put 10% down and our loan payment thru Disney is approx $325, our dues this year are approx $75, so total $400 per month.

Seeing as how we were spending $2000-$3000 per year on 1 7-10 nt trip, and now we can take a couple of trips each year, this works out well for us in the long run

 

[spiceycat]

okay to make it be less - do you really need fri or sat - since they are so expensive.

also traveling offseason is definitely cheaper.

 

[ChelleinNC]

Forgot to add my thoughts on this,

I would try for AKV since it is the newest with the longest lease time.

Don't buy a resort based on the fact that it has a few more years on the contract. In 40+ years, is another year or 2 really going to make a difference? If you love AKV, buy there. If you really love BWV or BCV or VWL, buy there. Owning where you really want to be is very important.

 

[MickeyMom2Boys]

I have a spreadsheet that shows average resort costs if purchasing cash compared to DVC (cost to buy in plus maintenance fees) for 50 years. It takes into account inflation but does not consider any financing. I would be happy to share. PM me if you are interested.

 

[Tink6666]

Thank you for all of the advice. I am still crunching numbers to see if it will work for us. We have been spending about $3000 to $5000 per year on vacations, which includes room, flight, and hopper passes. I was thinking that in the long run DVC would be the way to go for us. Now to present it to DH and make it easier for him to say "Yes Dear we can afford it"

Wish me luck!!

If you have any other advice for me, I would appreciate it!!

 

[dznystar]

Thank you for all of the advice. I am still crunching numbers to see if it will work for us. We have been spending about $3000 to $5000 per year on vacations, which includes room, flight, and hopper passes. I was thinking that in the long run DVC would be the way to go for us. Now to present it to DH and make it easier for him to say "Yes Dear we can afford it"

Wish me luck!!

If you have any other advice for me, I would appreciate it!!

Something else you might want to consider is that you do get other perks with DVC like discount on annual passes. I think its about $100 discount now. We just bought into DVC a few nights ago. We put 10% down on our disney visa to get the rewards points, and financed the rest through disney. Then we'll probably transfer it all to our disney visa. DH really wants to get the rewards dollars. We bought the minimum 160 pts and will be able to go down a few times a year, in off seasons. And Sun through Thur is always cheaper. Our monthly payment will be about $160.

 

[bookswin]

I have done this in detail for various contracts, mostly resale, taking into account every conceivable number. This includes tax write-off for real estate tax portion of annual fees, interest assumed at 6%, federal tax bracket, etc.

Figured as an amortization over 34/46 etc. years, WITHOUT increases for annual fees (since I assume the value of the room will go up at least as fast as fees will), it often works out to something around $7.75-8 a point per year for the better resale contracts. I have seen it as low as $7.15.

The net present value of the difference between a 2042 contract and a similarly-priced AKV contract works out to be only about 8%.

Annual fees are MUCH more important in this calculation that most people think.

 

[Lynne M]

Something else you might want to consider is that you do get other perks with DVC like discount on annual passes. I think its about $100 discount now.

The key word there is 'now'.

Actually, you don't want to consider any of the perks when making your decision. None of them are guaranteed in the contract; they come and go often. Sometimes there's a good selection of perks, sometimes not so much. The AP discount is relatively recent, and could be decreased or taken away altogether the day after you buy.

 

[goalie5hole]

Thank you for all of the advice. I am still crunching numbers to see if it will work for us. We have been spending about $3000 to $5000 per year on vacations, which includes room, flight, and hopper passes. I was thinking that in the long run DVC would be the way to go for us. Now to present it to DH and make it easier for him to say "Yes Dear we can afford it"

Wish me luck!!

If you have any other advice for me, I would appreciate it!!

You can tell him that $3000-$5000 might be $6000-$10000 in 10 years depending on the price increase of a hotel room in that time.

 

[Brian Noble]

I think Mary Waring has a very reasonable comparison between renting and owning.

http://www.mousesavers.com/dvc.html#dvc

The only real question is what interest rate to use for opportunity cost. I think 6% pre-tax that the prior poster used might be a bit on the low side. Mary uses 7%. I generally use 8%.

 

[bookswin]

You can tell him that $3000-$5000 might be $6000-$10000 in 10 years depending on the price increase of a hotel room in that time.

Yes, the long term is the only thing to look at.

If you are looking out 3-5 years, it's roughly a wash over what rooms are today. You can take it or leave it.

Do you know what rooms in the Contemporary cost 30 years ago? Something like $40-50. So what will DVC-equivalent rooms cost in 2038? $800? $1000?

It's impossible to know, but you can be sure it will be a lot higher than today, and with DVC you've locked in a big chunk of it.

 

[bookswin]

I think Mary Waring has a very reasonable comparison between renting and owning.

http://www.mousesavers.com/dvc.html#dvc

The only real question is what interest rate to use for opportunity cost. I think 6% pre-tax that the prior poster used might be a bit on the low side. Mary uses 7%. I generally use 8%.

Well, 30-year bonds yield 4.35% taxable as of today, and represent a logical alternative "investment" one might make as opposed to putting the money in DVC. Or I could get mortgage money for a bit over 6%, tax-deductible, which puts it under 5% net.

If I were sure or reasonably sure I could get 8% compounded over 40+ years, DVC would be less attractive.

I remember reading analyses like this about DVC a few years ago and people were saying, "But if I can get 12% compounded on that money in the stock market over the next 50 years, why would I tie it up in DVC?" Yes, and if Grandma had wheels, she'd be a trolley.