We keep renting points, should we just buy already?

[joeytdog]

This is our 3rd year in a row renting points

2007 BWV $2000

2008 BCV $2500

2009 BWV $3000 (already paid)

We keep renting points, should we just buy already? We would have to finance it at the rate of 14.25%

Or do we just keep renting until we have enough to pay for it with cash, which may be never

Also, do we invest in a newer resort like AKV or stick with the where we like to stay motto, BWV?

So confused and impatient

So badly want to own

 

[Dodie]

I think you're answering your own question. You've already paid $7500 in three years. If you can afford to do that, you could pay off the transaction for 160 points in maybe what - 8 years maybe - including interest.

Whether you want that debt is up to you.

 

[jlewisinsyr]

How many points are your renting? As of right now, you have spent $7,500 on renting points. If lets say you are renting 200 points, that means, for a resale of BWV you'd already have paid almost a third of the total initial investment off (including annual dues).

No one can tell you what to do, but from a pure financial investment, it would be most likely a much better option to buy.

 

[Callalily6]

Im in the same boat. Been renting for years.

What made some of you decide to go for it? How did you chose your home resort?

 

[Grandbuddy]

That kind of interest is way too high for financing something that would be lovely to have, but which you do not NEED to feed and shelter your family. I would never finance a purchase like DVC unless everything below applied:

I had stellar credit (in which case the finance rate would be closer to 10.75%)

I had no other outstanding consumer debt (beyond a mortgage and maybe one handleable auto loan) - NO credit card balances

I had an emergency fund sufficient to take care of at least basic expenses for several months

The monthly payment for the DVC loan, and the added expense of MFs would not be a burden on my finances

I could see a way that I could also save enough money each month that I could afford to travel to WDW and purchase admissions and food, so that my family could enjoy their DVC membership

We did not purchase DVC until our kids were grown and had kids - we could not afford it. We bought so that we can share it with them. (They have good jobs, but could not afford it at this stage of life, either.)

 

[dianeschlicht]

Im in the same boat. Been renting for years.

What made some of you decide to go for it? How did you chose your home resort?

We waited 4 years from the first time we took the DVC tour until we purchased. We waited until we could pay in full. It didn't take a rocket scientist to figure out that it was cheaper to own than to pay OOP for each trip. Now, we did NOT rent from owners....we payed CRO prices, so it was an even bigger bill each trip.

As for home resort...When we first purchased there were only two available, and we didn't care for the size of the BWV units or the hotel style there, so we purchased OKW. We have not regretted it for a minute! The lower point requirements there are perfect for us! We always said if they ever put DVC at AKL, we'd be there, so that was our final add-on. Choosing home resort is so much a personal decision, I don't think anyone elses decision should enter into the one you make.

 

[browniemtb]

We never knew you could rent points until we bought in. But after traveling to WDW 5x and staying in deluxe accomodations I said enough is enough. With the money we spent over those 5 stays my ownership would have been pretty much paid for. Since you are already $7500 in to this I would seriously consider a purchase, either resale or disney. Financing with Disney should be around 11.75%, someone correct me if I am wrong.

 

[Mickey'sApprentice]

I say...skip your '10 trip and purchase in time to pay for your '11 trip.

I'm assuming that you would probably spend at least another $1,000 on park tickets, transportation, etc. in 2010.

Take the $4,000 ($3,000 + $1,000) that you saved from NOT going in '10, and the $3,000 you would spend to rent points to go in '11 and purchase 75 points resale. You might want to purchase at OKW, BWV, or AKV. That would allow you to stay at least 5 days in a studio for most of the year. (You may still have to borrow some points, or have some points transferred into your account.)

You can then take DVC trips using your own points or combination or your points/transferred points for a few years until you can purchase another contract. You should save the $3000/yr. after your purchase, so if you budget you should be able to buy a lot more points in a few years.

Oh yeah, we love BWV. We have 100 points and it is great to have the option to go with Boardwalk or Standard points.

 

[permavac]

My husband and I are in the same boat. We've been addicted to Disney since 2005 and discovered points renting last year. We typically do 2 trips there per year and we rented this year and already have a reservation for January 09. When we initially looked at owning, it was something we realized we could not afford at this point - I personally don't want to have to finance. So we decided that this year, we would forgo the second trip and use that money to get a 25 point resale contract. That way, we have the "high" of being DVC members without the financial burden AND we can add on as our financial position allows. Obviously, we will need more than 25 points for our annual vacations so we expect to continue renting until we add on enough points for our needs. We currently have a signed contract and are waiting for ROFR ! We didn't get our "dream" resort (BWV too!) but we always go during the slow seasons so 7 months out will still get us what we want. Anyhoo - my two cents are: if nothing less than becoming a DVC member will scratch that itch for you, but you know (deep down in the bottom of your wallet) that spending all that money up front is fiscally irresponsible in your position, then a starter point contract to get your foot in the door might work for you too. Good luck! Personally? I've been on cloud nine since we sent the paperwork in - hope, hope, hope it goes through!

Terri

 

[srenga]

I was in the same boat before I bought into AKV. When I did the math, I came up with a cost per point between $9-$11 per year. That's assuming you pay cash and rent out your developer points or buy resale. The big variable that people tend to ignore is the "cost of money" So if you can pay cash it's about a wash vs renting, but you gain control of you ressie. From a financial standpoint if you can't pay cash renting would cheaper in the long run. IMHO

 

[bookwormde]

At 14+% you are better to just keep renting if you are getting the points for $10. It looks like you would need 250 points so $25,000. That is almost $3900 per year in interest initially. Add on some capital amortization and you can add another $1000-1500 per year. If you have that much extra cash per year then it is best to save for a few years and try resale for less than your final point needs to get your foot in the door even if you have to rent some extra points or do weekend CRO or cash DVC to make it work.

bookwormde

 

[Brian Noble]

One reason to keep renting: you see yourself no longer going to Disney in the medium term. For example, if you have grade school kids, it's possible that your idea of a fun family vacation will be different 5-10 years from now.

 

[Callalily6]

I thought you could use your DVC points to rent at locations other than WDW too. Did I understand that correctly?

 

[Granny]

One reason to keep renting: you see yourself no longer going to Disney in the medium term. For example, if you have grade school kids, it's possible that your idea of a fun family vacation will be different 5-10 years from now.

This is a really excellent point. If you are buying "for the kids" and don't see WDW as a long term vacation destination, then I'd keep renting.

It also depends on what people are charging you to rent. If you consistently are able to rent points in the $7-9 range, then it would be hard to justify. Think of it this way...you'd have to fork out the cost of buying a contract and still be paying $4-$5 a year for maintenance fees. Pretty hard to make that work financially as a break even.

 

[Blahnde]

I say...skip your '10 trip and purchase in time to pay for your '11 trip.

Thank goodness someone said it! While I truly understand and appreciate the "invaluable" nature of vacationing (especially when children grow-up so fast before your eyes!), I also see quite clearly the financial mess many people have found themselves in over the past 2-5 years due to the "I want it all, and I want it now!" mentality. If you can truly afford $4,000 - $5,000 vacation every year (ALL expenses: air, hotel, meals, car, etc.) then it will take only 2-3 years of "skipping it" to have up to 50 years of vacations (at least the lodging portion) paid in full.

But, to be most honest, it does not seem like you can really afford the vacations you have had since the interest you quoted is for less than stellar credit. I know, I know there can be many reasons for this, but if you cannot even get the 10.95% that DVD offers (or a 2nd on your home at a MUCH lower rate!) then not only should you not buy, but you should probably not be vacationing. Vacations are not a necessity, and it is not financially responsible to take them if you simply cannot afford to.

Now if I wrong, please do not be offended. This is not directed at simply your situation, but the many others out there that are wondering the same question. As someone who sees clients everyday who have dug themselves into an almost bottomless pit of debt, I just hate to see people advised to buy when they should not even be renting. Just like your primary residence buying is almost always preferable over renting; unlike your primary residence, DVC is not the "shelter" in food, clothing, and shelter.

Blahnde

 

[pinnocchiosdad]

This is our 3rd year in a row renting points

2007 BWV $2000

2008 BCV $2500

2009 BWV $3000 (already paid)

We keep renting points, should we just buy already? We would have to finance it at the rate of 14.25%

Or do we just keep renting until we have enough to pay for it with cash, which may be never

Also, do we invest in a newer resort like AKV or stick with the where we like to stay motto, BWV?

So confused and impatient

So badly want to own

You can buy a resale at OKW in the $60 range and book anywhere you wish at the 7 month mark. You could own there for what you paid in rent the last 3 years. Don't forget that owners must pay maintaiance fees in addition to a loan that you may take. You mentioned AKV, be advised that DVC also has a new property, BLT that was announced last week. Good luck in your decission.

 

[kristenrice]

We stayed in OKW with my parents in a 2BR back in 2001. We paid full rack rate through CRO scared1: ) and took the DVC tour while we were there. We opted not to buy in at that time, mainly because we were newly engaged and wanted to buy a first house before a vacation "home". The tour is where we first heard about the point rental process.

Fast forward to 2006...we have a 3 year old and a 1 year old and we want to plan a trip in 2008. So, I start looking into this point rental thing. I found a great owner (who lives not too far from us!) and we rented points for a January stay at OKW in a 1BR. Then and there, I decided that we would never go to Disney again unless we stayed in a DVC resort. The point rental process was too good of a deal.

Although renting points is relatively easy, it still bears an element of risk. I also felt like I was "pestering" the owner with requests for points. They assured me that they had plenty (for now) and I was helping them out too. Normally, we will not be able to afford to go to WDW every year. Every other year is the most we could do, but every third year is more likely. With Disney only offering minimum buy-ins of 150 points (at the time), a DVC purchase was unreasonable. We wouldn't need 300-450 points for our vacations AND we didn't have $15K to shell out up front. Seemed like rentals were our only option, but I felt like I was "taking advantage" of owners. I kept thinking, "Why should I get to use their points dirt cheap while they shelled out the $$$ for the membership and the annual dues?" I just knew that I wanted to be a member myself, but that minimum threshold was holding me back. Then, I found out about RESALES!

We started saving (and saving!) and we finally accumulated enough to buy a 100 point contract at AKV! We are staying there (on a rented reservation ) in October and it will be our first time staying there. We've visited the lodge a few times on our honeymoon and loved it!
Our resale contract recently closed and we're planning our first trip for 2010. I even have a friend who is going to rent the 2008 points from me since we can't use them. And the circle of life continues....

Now that we are owners, it is a sense of relief. Now, I know that when we want to go to WDW, we don't have to solicit point rentals, deal with contracts or worry about availability. We can handle the reservations ourselves and not worry about changes, cancellations or requests. I don't think we will travel any more or any less than if we continued to rent, but now I KNOW I will have points when I want to go. I don't have the uncertainty of trying to find someone to accommodate us. With a 100 point contract, we have enough points to go alternating years over spring break for 5 nights and stay in a 1BR savanna view villa! We might not always travel over spring break, but that is the most points we would need.

There is always a resale market if we discover that DVC no longer suits our needs. Although I would never want to sell my contract that I worked so hard to acquire , I know that it is at least an option. Overall, we felt that it was the right time to purchase so we jumped on board. I look forward to many years of vacations. I just hope that the economy turns around a little so we can still afford to actually get to WDW!

 

[jamstew]

We did not purchase DVC until our kids were grown and had kids - we could not afford it. We bought so that we can share it with them. (They have good jobs, but could not afford it at this stage of life, either.)

My story exactly, except it's just "me" now, not "we". I purchased small contract for cash, and have added on when I had the cash on hand (I actually put the add-ons on my credit card to get the frequent flyer miles and paid it off at the end of the month, as I always do).

 

[Grandbuddy]

My story exactly, except it's just "me" now, not "we". I purchased small contract for cash, and have added on when I had the cash on hand (I actually put the add-ons on my credit card to get the frequent flyer miles and paid it off at the end of the month, as I always do).

I hope your children are as thrilled as mine are.

 

[jamstew]

I hope your children are as thrilled as mine are.

Oh, they definitely are