When is it worth getting a DVC contract with a 2042 expiration?

[Brian Noble]

But if I can pay $5 for that cup and know it's my freezer and I can grab it anytime, as opposed to $4 for that cup and I need to depend on things going smoothly with a stranger I'll never meet, it might be worth the $5.

I also need to be pretty darn sure I want chocolate ice cream for dessert for the next 20 years.

 

[havoc315]

I love the analogy. But if I can pay $5 for that cup and know it's my freezer and I can grab it anytime, as opposed to $4 for that cup and I need to depend on things going smoothly with a stranger I'll never meet, it might be worth the $5. Of course, it would be a no-brainer if the cost diff was only a $1! I realize the price diff could be an important driver. A significant driver.

Fair point.
But then there are the downsides of ownership as well -- What if there is another pandemic and you're stuck with points you can't use. Or 10 years down the road, you don't want to take WDW trips every year anymore. Or global warming leads to Orlando being a truly miserable location in 10 years, etc.

So let's go back to the ice cream analogy -- Your local ice cream shop has been around for 30 years, they do good business. You have your tradition, you go get a cup of chocolate ice cream every Tuesday night. The price is $4 per cup. But they will let you lock in your next 20 weeks! You can lock in your next 20 weeks for $100! ($5 per cup). Now, it does protect you from possible price increases, though it's unlikely the price is going to skyrocket over the next 20 weeks. They are also guaranteeing they will put your cup of chocolate aside, so you don't have to worry about them running out of chocolate. Of course, they only ran out of chocolate 1 day in the last 30 years.

So, is it worth pre-purchasing, where you almost certainly will end up paying more? Yes, you do get some benefit from the pre-purchase, but not much.

The point of pre-paying is almost always to save money. A discount almost always accompanies pre-paying. The only significant reason to pre-purchase apart from a discount is scarcity -- Buying a year's worth of toilet paper in the pandemic at inflated prices because it might run out!
So yes, if you truly don't believe there would be point rentals available, then scarcity is a reason to over-pay. But just checking the rental forum today, I see multiple people renting out BWV points (for 11 month bookings) for $16 to $18 per point.
If I can rent for $16 to $18 per point, it makes little sense to pre-pay $150 per point (plus annual dues). Even ignoring the time value of money, the break even point would be 17 years, so you'd only save money the last 2 years of ownership. When you factor in the time value of money, you end up at a significant loss by having purchased.
Basically, you can invest that $150 -- and spent the earnings on your DVC annual rentals.
Under this scenario: Total cost of buying: Approximately $300 per point (purchase plus 19 years of dues -- (19 as 2021 is almost over, and contracts end Jan 2042))
Total cost of rent points: Approximately $150-$200.

Buying was twice as expensive as renting the points. Now, there are other factors such as the rate of inflation of point rentals, inflation of dues, etc. So this is a very very rough estimate.

This is also the dirty secret Disney doesn't want you to know -- It actually takes longer for DVC ownership to become a value than they advertise. When they talk about breaking even after just 8 years, etc, they are comparing it to full rack rate rooms. Not comparing it to renting points, not factoring in room discounts, etc. The real break even point is much closer to 15-20 years.

 

[Chuck96]

Very useful thread. My family has been eyeing DVC for almost 2 years now. The goal wasn't whether we wanted DVC, but where and how much. We are coming to it late (but at the right time). Our son is 17, and we lucked into my parents paying for our WDW trips until he was 12 or so. Now, we mostly go on our own. My wife loves Disney, my son loves Disney, and I love Disney. Less than them, but enough that I'm willing to go in on committing to WDW for the long run. We struggled with where to pick the home resort. I'm marginally obsessed with value, so I keep wanting to make certain we get everything possible for the investment. We rented points at Poly (which would be my choice) in early 2020. Poly would be my choice. It is on the monorail (a near must for me), it is a huge part of WDW history, I dig the theming. But my wife was ambivalent. I really want her to be excited about where we pick. This year, we rented as Beach Club and wife and I loved it. I'm an EPCOT guy anyway. I scheduled an hour or two at VGF to walk around as well, because I figured that would be a slam dunk for her (she loved Mary Poppins and Alice in Wonderland). She found it (in that one hour) a little stuffy and "too nice."

But we were thrilled that we were both big fans of Beach Club, and decided we'd look for the right contract there. Son liked Poly a bit more, but he's not paying and was amenable to whatever. Problem solved. And then as I dug around, I realized BCV was a 2042 sunset. Which, for us, sadly takes it out of the running. Yes, less dues. But I wanted something my son could utilize at least until our age or later. 20 years is about as long as I'd plan to go to WDW, but he's got years and years left. SO we went back to the drawing board. I was still considering a smaller BCV, so wife and I could do F&W, but the arguments made above about renting make more sense to me. I would not be paying any maintenance fees renting a studio for a few nights. Nonetheless, you have to be excited about where you are considering buying. You just also have to make the math work, too, across any and all options.

 

[CarolMN]

I love chocolate ice cream. But if I have a choice of paying $4 per cup or $5 per cup, I won’t spend the extra just out of the love.

If purchasing BWV is more expensive than renting the exact same rooms, then the math still matters. I’ve never seen an inability to rent BWV at 11 months.

We'll have to agree to disagree. Renting is not the same as owning. Owning gives me control & flexibility, and some perks in addition to the room. Those things have value to me.

In your example, I'd be paying the $5 to get chocolate ice cream mixed with nuts or chocolate bits.

 

[RoseGold]

I also need to be pretty darn sure I want chocolate ice cream for dessert for the next 20 years.

I don’t view any resale as that huge of a commitment, even 2042. I can see the argument for buying BC/BW being pretty persuasive in 2032. If you really want boardwalk view or beach club, I think it makes sense to pay more.

Factor in the legacy charts and the obvious risks from renting, and I can see why buying is right for some.

 

[havoc315]

We'll have to agree to disagree. Renting is not the same as owning. Owning gives me control & flexibility, and some perks in addition to the room. Those things have value to me.

In your example, I'd be paying the $5 to get chocolate ice cream mixed with nuts or chocolate bits.

What are the nuts or chocolate bits? What are the perks you get with re-sale ownership versus renting at 11 months out?
Same access to rooms, same parking privileges, etc.

If anything.... in my mind, it's $5 for a cup of chocolate. Locked in to that chocolate cup for 20 years.
Versus $4 for a cup of chocolate or vanilla, or any other flavor you want at any time, $4 to have a fruit salad instead of ice cream one year, $4 to have it in a cone instead of a cup 1 year..

Maybe I'm missing something, but I really don't see much in terms of nuts and chocolate bits, when owning instead of renting at 11 months.

 

[ray3127]

What are the nuts or chocolate bits? What are the perks you get with re-sale ownership versus renting at 11 months out?
Same access to rooms, same parking privileges, etc.

If anything.... in my mind, it's $5 for a cup of chocolate. Locked in to that chocolate cup for 20 years.
Versus $4 for a cup of chocolate or vanilla, or any other flavor you want at any time, $4 to have a fruit salad instead of ice cream one year, $4 to have it in a cone instead of a cup 1 year..

Maybe I'm missing something, but I really don't see much in terms of nuts and chocolate bits, when owning instead of renting at 11 months.

She answered this. "Control & Flexibility".

I typically book a few extra nights, then modify down to what works best with the available flights. I can't do this with renting.

I also NEED to own if I want a Beach Club Studio at certain times of the year. Same goes for BWV (Boardwalk & Standard view studios). Not always, but sometimes.

I think it's a disservice how so many throw around renting like it's a simple thing to do on these boards. It can work, but it is typically not flexible, nor is it often you'll find an owner willing to get you a reservation that you must book exactly 11 months out (or even walked).

I'll take my flexibility and control, thanks. And I don't care who thinks I overpaid for my Beach Club points to do it.

 

[havoc315]

She answered this. "Control & Flexibility".

I typically book a few extra nights, then modify down to what works best with the available flights. I can't do this with renting.

Ok, that's true. Easier to modify a trip if you own.
But she said there are other perks besides control and flexibility. Wondering what perks she is referring to.

I also NEED to own if I want a Beach Club Studio at certain times of the year. Same goes for BWV (Boardwalk & Standard view studios). Not always, but sometimes.

Not true at all. You can always rent the points 11 months in advance from a Beach Club owner.
My friends rented a Beach Club Studio for this coming Christmas.
It's not that hard to find someone renting their points. Worst case scenario, you go through the agencies.

But it is true that you lose the ability to walk the reservation, you lose the ability to modify it.

So renting gives you a ton of additional flexibility -- only rent what you need, where you need, when you need. But you do lose the flexibility of modifying the reservation once you book.

 

[ray3127]

Not true at all. You can always rent the points 11 months in advance from a Beach Club owner.
My friends rented a Beach Club Studio for this coming Christmas.
It's not that hard to find someone renting their points. Worst case scenario, you go through the agencies.

I'm sorry, you can't ALWAYS rent points from somebody... often times you can. But there are times you can't.

At this moment Boardwalk View studios are unavailable Sept. 28-30, 2022, exactly 11 months out. People may walk over those reservations, but they also may continue to be completely unavailable. And Standard View studios at BWV are unavailable Sept. 28-29.

Currently Beach Club is fully available at 11 months. But typically that changes at some point in October (with "Fall Frenzy").

Did your friends' stay include New Year's Eve? Because that's another date that is awfully hard to get at the aforementioned properties (all properties, really), unless you own there.

I am just providing an alternative to the constant drumbeat of "renting is simple." Again, I admit that it can be, and I've done it myself. I can see the value in not being tied down by not owning a contract, just renting what you need, etc. This is especially true if your needs change from year to year.

But if you need the same thing every year, then owning makes more sense. Even at today's prices for 2042 resorts.

 

[DonMacGregor]

It all boils down to each individual. Age, financial situation, vacation expectations, level of interest in "working" the system to either rent or walk points, all play into it.

 

[Ruttangel]

I bet buying now and selling in 5 years is cheaper than renting for 5 years.
Prove me wrong maths wizards!

 

[DVCPAT]

She answered this. "Control & Flexibility".

I typically book a few extra nights, then modify down to what works best with the available flights. I can't do this with renting.

I also NEED to own if I want a Beach Club Studio at certain times of the year. Same goes for BWV (Boardwalk & Standard view studios). Not always, but sometimes.

I think it's a disservice how so many throw around renting like it's a simple thing to do on these boards. It can work, but it is typically not flexible, nor is it often you'll find an owner willing to get you a reservation that you must book exactly 11 months out (or even walked).

I'll take my flexibility and control, thanks. And I don't care who thinks I overpaid for my Beach Club points to do it.

I agree 100%. I like the freedom to change plans. DVC value will always correlate with resort rates and who knows what Disney will charge in 5-10 years. 20 yr contracts might be attractive to some buyers. BWV standard rooms are a great deal and it’s nice to book them at 11 months for family and friends. If plans change, it’s easy to cancel.

 

[havoc315]

I'm sorry, you can't ALWAYS rent points from somebody... often times you can. But there are times you can't.

At this moment Boardwalk View studios are unavailable Sept. 28-30, 2022, exactly 11 months out. People may walk over those reservations, but they also may continue to be completely unavailable. And Standard View studios at BWV are unavailable Sept. 28-29.

Currently Beach Club is fully available at 11 months. But typically that changes at some point in October (with "Fall Frenzy").

Did your friends' stay include New Year's Eve? Because that's another date that is awfully hard to get at the aforementioned properties (all properties, really), unless you own there.

I am just providing an alternative to the constant drumbeat of "renting is simple." Again, I admit that it can be, and I've done it myself. I can see the value in not being tied down by not owning a contract, just renting what you need, etc. This is especially true if your needs change from year to year.

But if you need the same thing every year, then owning makes more sense. Even at today's prices for 2042 resorts.

Yes, they are staying through Jan 2.
If there is no availability at 11 months, then you can’t book even as an owner. Owners and renters are both equally out of luck.

The advantage of owning is being able to do your own walking. A renter may have trouble finding someone willing to walk a reservation. So yes, if you know you are going to need to walk many of your reservations, owning does give you that flexibility to modify your own reservation.

 

[Dizzydizney]

My eyes and brain hurt from all the math.
Would this be a cash purchase? Would it make you happy to have the 11 month advantage at this particular resort? Are you thinking of adult only getaways for when the kids are older and a grandparent can watch them? This whole “renting” argument....I would much rather have total control of my trip and be able to make changes on the fly and stalk the website for a better room/date.
If the MFs are reasonable enough go for it. And you could always rent the points out to someone. My situation is different.....I’ll be in my 80s when BWV expires, but also have BLT and Riviera to leave for the kids and grandkids. We could sell BWV right now and make a nice profit, but I would be very unhappy about not being able to get a room there easily during my favorite times (Food and wine, Flower and Garden). But again, my situation is different. We are not what you would call world travelers....we are happy at Disney and take an occasional cruise.
When people talk about the great 30% off rooms you can get with Disney offers or AP offers, I’ve checked them out occasionally.....seems like they never have the rooms I want for the dates I want.

 

[CarolMN]

What are the perks you get with re-sale ownership versus renting at 11 months out?

You picked the least important reason to highlight, lol. Resale purchasers get access to TOTWL (when available), free DVD rentals, pool hopping (when allowed), and dining & merchandise discounts. Some have even been able to purchase the Sorcerers annual pass. I know the last two are not supposed to be available to resale purchasers, but there are many, many reports of those being offered to white card members, anyway.

As others have already posted, flexibility & control have a lot of value to many of us. Renting is not as easy a thing as some make it out to be, especially when plans change.

You may have the last word if you like. It's OK with me if you don't agree.

 

[davidl81]

FWIW, math doesn't matter if the BWV are where you want to be most of the time, especially if you want a standard or Boardwalk view. BWV contracts are still less expensive than Disney's cash prices. Getting into the BWV is tough at 7 months for many times of the year.

I love BWV. The ability to walk to two parks & the skyliner is a HUGE plus. Vacation time is too precious to me to spend it wishing I were stying somewhere else.

I do think BCV or BWV can make sense to buy but not really math related, more because you know you want to stay there, and it’s close enough in pricing to rent where it’s not a huge difference. Someone posted they own a small contract for run Disney events. To me that is perfectly reasonable. You are not depending on someone renting that reservation right at 11 months etc. All this being said the contract would really just need to be a contact just used at those resorts to make any sense.

 

[pineapplepalms]

We'll have to agree to disagree. Renting is not the same as owning. Owning gives me control & flexibility, and some perks in addition to the room. Those things have value to me.

In your example, I'd be paying the $5 to get chocolate ice cream mixed with nuts or chocolate bits.

I agree, renting and owning are very different things. Having control over the reservation and being able to modify or cancel is absolutely worth it to me. I went through this about 3 years ago when my oldest was almost 2yo, and decided it was worth it to buy BWV since the Epcot resort area is my favorite. We also want Boardwalk view rooms, and either 2BRs or GVs, so it’s not as easy to get at 7 months. Now we have 3 kids and when our contract expires, our youngest will be 21. That’s still 20 years of family memories and I’d rather own DVC than invest the money and rent. We already have other investments. DVC is fun. And it’s about more than just the cost; it’s also about the flexibility of managing your own points.

So for the OP, I’d say it’s worth it if you really want to stay at one of the 2042 resorts over and over again, and if you care about being able to manage your own reservations.

 

[DonMacGregor]

I do think BCV or BWV can make sense to buy but not really math related, more because you know you want to stay there, and it’s close enough in pricing to rent where it’s not a huge difference. Someone posted they own a small contract for run Disney events. To me that is perfectly reasonable. You are not depending on someone renting that reservation right at 11 months etc. All this being said the contract would really just need to be a contact just used at those resorts to make any sense.

This is why I bought 50 points at BRV. I love the resort, I am pretty sure they'll eventually get around to the refurb (LOL), I paid cash, and it was done and dusted. I don't have the time nor the inclination to rent points, and I will NEVER expend the time needed to walk a reservation. I may, however, grab another 25 points to get past the 75-point threshold for most studio weekends during our preferred travel periods. We shall see. And, it wasn't THAT much money that I'll feel desperately inclined to stay there over and over. I have the same use year for all three of my contracts., and my SAP's at at SSR, so I'm happy.

 

[DebbieB]

If you love the resort and also consider the points charts are much lower. Compare BWV point charts to Riviera. Age is also a factor, I'll be 82 in 2042 so I'm fine. On the other hand, my love of VGC "made me" purchase a resale almost 2 years ago. Considering I paid $180 a point and it's now $285-$300, I think I'm good there too. Totally a decision of the heart (and a great 401K return in 2019).

 

[RoseGold]

I bet buying now and selling in 5 years is cheaper than renting for 5 years.
Prove me wrong maths wizards!

I agree, but I didn’t put my money where my math is! I’m booking 1BR anyway.