JimMIA
There's more to life than mice...
- Joined
- Feb 16, 2005
- Messages
- 21,168
From time to time, we see posts (usually involving the economics of an owner renting out their points) that indicate some really have no idea how much one of their points cost them. To properly value our DVC ownership, we should all know our approximate cost. Otherwise, how do we know if we're getting a good value or terrible value for things like cruises, exchanges, stays at the Poly, etc? Or whether we're making money or losing money when we rent our points out?
I'll give an example.
I own an OKW contract which I purchased for $72 per point including closing. At the time I purchased it, I had a full 37 years remaining on the contract, so my acquisition cost was $1.95 per point. That cost remains constant throughout my ownership.
For this year, my dues are $4.97 per point, and that figure will obviously change each year as the dues change. So my total cost in 2011 is $6.92.
Therefore, my May two-weeknight stay in an OKW 1 BR cost 54 points @ $6.92, or $373.68 ($186.84 per night). That's not the best deal in town, but not a bad value for those accommodations. (You don't want to know what the other three nights at Wyndham's Bonnet Creek are costing me!)
If you finance, the math changes, of course. To get an accurate acquisition cost for a financed contract, you have two choices...IMHO. If it's already paid off, obviously you just add your down payment and the total of the payments you made, divide by the number of years remaining when you purchased, and you've got it. Add this year's dues cost and you have your real cost for each point.
If it's not yet paid off -- or if you're considering a financed purchase -- I think the only sensible way to calculate your real cost is to add your down payment and any costs, plus the total of the monthly payments in the loan agreement. (Yes, you might pay it off early and save some interest, but to be safe I would not plan on that. I'd rather be pleasantly surprised than unpleasantly surprised.)
If you're so inclined, you can throw in things like "opportunity costs," but for most owners those calculations are probably not worth worrying about.
Interesting exercise that you might want to try...
I'll give an example.
I own an OKW contract which I purchased for $72 per point including closing. At the time I purchased it, I had a full 37 years remaining on the contract, so my acquisition cost was $1.95 per point. That cost remains constant throughout my ownership.
For this year, my dues are $4.97 per point, and that figure will obviously change each year as the dues change. So my total cost in 2011 is $6.92.
Therefore, my May two-weeknight stay in an OKW 1 BR cost 54 points @ $6.92, or $373.68 ($186.84 per night). That's not the best deal in town, but not a bad value for those accommodations. (You don't want to know what the other three nights at Wyndham's Bonnet Creek are costing me!)
If you finance, the math changes, of course. To get an accurate acquisition cost for a financed contract, you have two choices...IMHO. If it's already paid off, obviously you just add your down payment and the total of the payments you made, divide by the number of years remaining when you purchased, and you've got it. Add this year's dues cost and you have your real cost for each point.
If it's not yet paid off -- or if you're considering a financed purchase -- I think the only sensible way to calculate your real cost is to add your down payment and any costs, plus the total of the monthly payments in the loan agreement. (Yes, you might pay it off early and save some interest, but to be safe I would not plan on that. I'd rather be pleasantly surprised than unpleasantly surprised.)
If you're so inclined, you can throw in things like "opportunity costs," but for most owners those calculations are probably not worth worrying about.
Interesting exercise that you might want to try...
That's what makes me really happy.
. I specifically purchased DVC to only stay onsight. I've heard nice things about Bonnet Creek, but don't want to worry about car rental and driving to the parks. I can see making the comparison to renting points from a DVC member, or even another timeshare to trade into DVC. But both of those options mean I lose some control over when I can go and where I can stay.
