VGC Potential Purchase – Does my logic make sense?

[ncgator]

Hello. So with my first DVC purchase still in ROFR, I am already looking to make a second! Assuming all goes well, I will soon be the owner of 150 points at SSR with a December use year. I generally take shorter trips to WDW a couple times a year (4 nights each), am pretty flexible on when I go, studios will generally be fine, and will likely often book those closer to 7 months ahead – so this seemed like a good starting point. I will be happy to stay SSR as I enjoy Downtown Disney (or future Disney Springs), but I also look forward to trying the other resorts. We live in NC, so will also give HH a try.

I also like to visit Disneyland every 2-3 years or so and stay on site (usually in October, but maybe try D23 one day). For Disneyland, I could plan much further in advance at the 11 month mark, and I understand that this resort is a little harder to get at the 7 month mark. Would it make sense to buy a 50 point contract at VGC to be able to book there early enough? If I’m doing my math right, if I could get the points at $140 each, and then with a $4.58 per point maintenance fee, I am estimating the cost to be around $400 per year, or $800 for 2-years or 100 points total. That would get me between 4-5 nights, or $160 – 200 per night. I don’t believe the Grand Californian Hotel is ever below $200, so seems like a reasonable deal. I know this doesn’t include cost increases, but let’s assume maintenance and hotel rates increase at the same rate.

Am I thinking about it wrong? Is it a crazy idea? Would love to get any thoughts or suggestions.

 

[Hisgirl]

I am a financial counselor and I can't see times shares being a good idea at all for anyone at anytime. But then again, I'm pretty risk adverse and conservative. I ran the numbers and as long as someone takes a vacation each year, it's about 20 years before you're playing on a level field and that's not even taking into account the opportunity cost of the investment.

But that's just me.

Flip a coin. While it's in the air....what side is your heart hoping for? That's your decision.

(after, of course, you have fully funded a retirement account, paid off all credit cards, funded an emergency savings and paid off all cars...)

Hey...you asked....

 

[Granny]

I also like to visit Disneyland every 2-3 years or so and stay on site (usually in October, but maybe try D23 one day). For Disneyland, I could plan much further in advance at the 11 month mark, and I understand that this resort is a little harder to get at the 7 month mark. Would it make sense to buy a 50 point contract at VGC to be able to book there early enough? If I’m doing my math right, if I could get the points at $140 each, and then with a $4.58 per point maintenance fee, I am estimating the cost to be around $400 per year, or $800 for 2-years or 100 points total. That would get me between 4-5 nights, or $160 – 200 per night. I don’t believe the Grand Californian Hotel is ever below $200, so seems like a reasonable deal. I know this doesn’t include cost increases, but let’s assume maintenance and hotel rates increase at the same rate.

Am I thinking about it wrong? Is it a crazy idea? Would love to get any thoughts or suggestions.

I don't think it is crazy, but the key question is do you really think you will want to go to DL every other year for 40+ years? The math you have works, but figuring in the cost of airfare is that a trip you would budget for that often?

There is no right or wrong answer...as indicated you should look at what you really want out of your purchase. Personally, I'd probably buy more points at SSR and then try to book VGC at the 7 month window. If it works, fine. If it doesn't, you can easily use those points at WDW instead.

I am a financial counselor and I can't see times shares being a good idea at all for anyone at anytime. But then again, I'm pretty risk adverse and conservative. I ran the numbers and as long as someone takes a vacation each year, it's about 20 years before you're playing on a level field and that's not even taking into account the opportunity cost of the investment.

I couldn't disagree with your first sentence more. Following that logic, spending money on vacations (or anything else beyond basic needs and retirement planning) is a bad idea.

I don't know how you ran the numbers, but we've owned DVC for 13 years and I know we have more than broken even on our purchase. Now it is true we probably wouldn't have gone as often or stayed in 2BR suites on-site but if we had we would have paid substantially more than the cost of DVC.

If DVC can be part of someone's annual budget and still meet other financial needs then it can make a lot of sense.

On the other hand, those who look at it as an investment don't see it being very good. DVC is more like leasing a car. Is it the very cheapest way to drive a vehicle? No, but it works for many people who happily lease vehicle after vehicle.

Likewise, DVC doesn't necessarily save people money as much as it provides a higher quality on-site stay at better pricing than cash reservations for the same room.

 

[HokieGCC]

It seems SSR is easy to get more last minute (and you also have OKW) so for last minute trips I like it. You might occasionally get into other resorts.

Your 50 point plan for Disneyland seems reasonable to me also. You can book/borrow to make it an every 3 year 150 point trip and leverage the 11 month window.

I do need to agree with Hisgirl in that the breakeven point for DVC is years and years. I calculated it to be 8-10 years for resale (but that is for our habits). I can also see it being 20 years as stated by Hisgirl. So, my advice for people is if you know with a great deal of accuracy your vacation plans DVC "can" eventually save you some money. If not, it can cost you; maybe a lot.

So ... my suggestion is to hold off until you are very certain with your plan. You can go to Disney whenever you want regardless of DVC in the meantime. Then when you purchase use cash and buy resale.

 

[ExpeditionEverest]

I also like to visit Disneyland every 2-3 years or so and stay on site (usually in October, but maybe try D23 one day). For Disneyland, I could plan much further in advance at the 11 month mark, and I understand that this resort is a little harder to get at the 7 month mark. Would it make sense to buy a 50 point contract at VGC to be able to book there early enough? If I’m doing my math right, if I could get the points at $140 each, and then with a $4.58 per point maintenance fee, I am estimating the cost to be around $400 per year, or $800 for 2-years or 100 points total. That would get me between 4-5 nights, or $160 – 200 per night. I don’t believe the Grand Californian Hotel is ever below $200, so seems like a reasonable deal. I know this doesn’t include cost increases, but let’s assume maintenance and hotel rates increase at the same rate.

Am I thinking about it wrong? Is it a crazy idea? Would love to get any thoughts or suggestions.

VGC has very limited availability due to the low number of DVC units. If you are interested in going to Disneyland and staying at VGC on points, you generally need to VGC to be your home resort.

 

[bethy]

If you decide this is something you want to do, your biggest challenge will be finding a 50 point contract. Whether direct or resale. Especially if you limit your search to a specific use year.

 

[ncgator]

Thanks everyone for the input. I'm probably going to wait to see how my first contract works out before making a decision on VGC. I think I got into a bit of a rush when I saw 3 50 point contracts pop up for sale, but I need to slow down

 

[bethy]

Hmmm I stand corrected! I guess there are some resales out there. It's been awhile since I've checked.

 

[Dean]

I am a financial counselor and I can't see times shares being a good idea at all for anyone at anytime. But then again, I'm pretty risk adverse and conservative. I ran the numbers and as long as someone takes a vacation each year, it's about 20 years before you're playing on a level field and that's not even taking into account the opportunity cost of the investment.

It depends, for some situations you are dead on, for others dead wrong. For DVC one must meet certain criteria to make it financially feasible including being able to plan ahead, being OK with the timeshare compromises, being able to afford it (not just pay the payments) and saying on property is important to the potential buyer. And I do agree with you on your financial requisites. After that it's simply running the numbers in a reasonable way (most don't though and frequently overestimate savings and underestimate risk). Many do ignore the risk aspect of debt and timeshares in general, I'd agree with you there. For one of my timeshare systems i probably average a return well over 100% (often 200-300%) per year return (bluegreen) and for Marriott and DVC maybe 30-50% some yrs the returns are dramatically more. Those numbers assume ROI over 10 yrs where applicable, consider the TVM and assume usual to above usual discounts to non owners for a similar accommodation (or renting the same item). For example we had nine 2BR units for a week in Nashville at the Wyndham a few years ago with the total cost around $1500 direct costs and under $2K with indirect costs added in. Another example, a few yrs ago we had nine DVC units all exchange, four 2 BR and five 1 BR between BWV & BCV and the total cost around $3500 direct and indirect combined. You can do the math on the value or savings as well as I can but clearly a significant savings no matter how you cut it even compared to values or off property private rentals. In both cases it likely didn't save me personally a dime as I only stayed in one unit but it did allow me to arrange a family vacation to give back and get family together for little to no additional cost.

 

[disneydenisel]

To the OP, I think that your buying strategy makes sense for the trips that you want to take. A VGC 50-point contract should suit you well when you are ready to make the purchase.

I like to plan 11 months out and then not think about it anymore. We bought where wanted to stay--BCV and VGC--because we are tied to the school calendar for years to come. Our first two contracts were resale, and then I bought more VGC points direct from Disney (twice!) and another resale BCV. We are going to splurge at VGC for the first time and stay in a two bedroom next year . I know that I might not break even for about 10 years, but I plan to be going to DLR and WDW for at least 20 more, so I know we will be able to stay in great accommodations and save $$ at the same time.

Hope you pass ROFR on your SSR purchase and then you will probably start adding on soon afterward .

 

[McCrae]

I am a financial counselor and I can't see times shares being a good idea at all for anyone at anytime. But then again, I'm pretty risk adverse and conservative. I ran the numbers and as long as someone takes a vacation each year, it's about 20 years before you're playing on a level field and that's not even taking into account the opportunity cost of the investment.

But that's just me.

Flip a coin. While it's in the air....what side is your heart hoping for? That's your decision.

(after, of course, you have fully funded a retirement account, paid off all credit cards, funded an emergency savings and paid off all cars...)

Hey...you asked....

Need to call you out on this post. By saying that you are a Financial Counsellor you are implying an expertise in this area and people may regard your view as accurate.

Your comments are a generalisation and as such don't apply in every case.

A DVC time share is not the same as other time shares and if you are going you value it you need to look at in detail.

Our DVC payback period was around 6 years, no where near the 20 year time scale you suggest.

Taking into account annual dues, the depreciation of our points over the life of the contract and the opportunity cost of the cash we spent on DVC we still have substantial annual savings on our DVC holiday.

If we decide not to go on holiday we can easily rent our points out. At the current rates after all our costs our net return is more than what we would have gained had we placed our initial investment in a high performing mutual bond fund.

In the resale market we can sell our points at a price higher than we bought them for.... Pretty unusual in a time share.

In our case your comments don't apply. Individual circumstances will be different. I can see how they may be be right for someone that uses finance to purchase DVC.

When offering advice sweeping generalisations don't often work and you have fallen into this trap.

 

[judydvc]

To reply to the OP I bought at VGC when I realized I was using my points more at Disneyland than WDW. I have a small contract but it works well for me.

 

[moreisgood]

Just do it. If you don't want to take trips in 5 years, you can resell - likely at the same price, or better.

 

[Hisgirl]

Need to call you out on this post. By saying that you are a Financial Counsellor you are implying an expertise in this area and people may regard your view as accurate.

Your comments are a generalisation and as such don't apply in every case.

A DVC time share is not the same as other time shares and if you are going you value it you need to look at in detail.

Our DVC payback period was around 6 years, no where near the 20 year time scale you suggest.

Taking into account annual dues, the depreciation of our points over the life of the contract and the opportunity cost of the cash we spent on DVC we still have substantial annual savings on our DVC holiday.

If we decide not to go on holiday we can easily rent our points out. At the current rates after all our costs our net return is more than what we would have gained had we placed our initial investment in a high performing mutual bond fund.

In the resale market we can sell our points at a price higher than we bought them for.... Pretty unusual in a time share.

In our case your comments don't apply. Individual circumstances will be different. I can see how they may be be right for someone that uses finance to purchase DVC.

When offering advice sweeping generalisations don't often work and you have fallen into this trap.

You are correct that I was generalizing and I do apologize. Before I used the 20-year comment, I had researched other financial professionals and found others who stated 18-20 year time periods for a level playing field. You are correct that all situations are different and someone could have gotten a great deal on a resale.I'm truly glad you have enjoyed yours and that the numbers work for you! That's what it's all about!

 

[chrisaman]

The thing that a lot of u are missing is that u can always resell your contract later on. Things can change but currently prices have held pretty steady. I could sell my VGC contract today and make money on it from when I bought it a year ago and I have taken two vacations on it. If u know I are going to be going to disneyland every other year or want to do that and u want to stay at a disney resort, I think u would be making a mistake not buying a small contract.

 

[DVCMomBLT]

I am a financial counselor and I can't see times shares being a good idea at all for anyone at anytime. But then again, I'm pretty risk adverse and conservative. I ran the numbers and as long as someone takes a vacation each year, it's about 20 years before you're playing on a level field and that's not even taking into account the opportunity cost of the investment.

But that's just me.

Flip a coin. While it's in the air....what side is your heart hoping for? That's your decision.

(after, of course, you have fully funded a retirement account, paid off all credit cards, funded an emergency savings and paid off all cars...)

Hey...you asked....

What is a financial counselor?

 

[AddieAidey]

In over the year that we have owned an SSR contract, I have booked VGC twice. Once I was up at the crack of dawn to book our dates but I got what I wanted. Booking VGC can be done without owning there.

Is owning really logical....ehhh, but it creates great memories and forces us to use our points. We would not stay in Deluxe resorts on cash rates. I love owning and I would be so sad if we had to sell. If we did then we would make more than what we paid and taken several vacations.

 

[apple9117]

To the OP, I think what you're saying makes sense, as long as this is financially feasible for you.

My wife and I currently own points at AKV and GCV. Our contract at GCV is pretty small at 50 points. But we wanted to be able to book out at the 11 month window, as we heard GCV fills up fast.

Gluck!

 

[Hisgirl]

What is a financial counselor?

I'm so happy to hear all the happy owners of DVC! This seriously flies in the face of so many other time share stories out there but... leave it to WDW to bring magic to the world of time shares!

(A financial counselor is someone who works with individuals or families to increase their financial literacy, helping them to live within budgets, plan for the future, put together a remedial plan in the face of a financial crisis and overall, gain a better understanding of all things financial that affect one's life.)

 

[Dean]

I'm so happy to hear all the happy owners of DVC! This seriously flies in the face of so many other time share stories out there but... leave it to WDW to bring magic to the world of time shares!

Again, I must disagree somewhat. While there are many satisfied DVC owners, there are many that are less than satisfied but continue to own because it's a means to Disney. As for other timeshares, it sounds like you've heard rumors and assumed them to be true. They are to a degree on the sales side and for those that are sold something and never use it or learn to use it. However, there are also many satisfied owners for many other timeshares as well.