How do you make DVC make financial sense?

[crisi]

Another factor is that eighteen months ago or so, you could buy a resale for a low enough amount that the numbers were more favorable - still not against Values - but against Deluxes and possibly Moderates. Over the past year, the resale market has seen some rather astounding price increases - good for people who bought low and now want to sell - they'll add their sales profits to the money saved and it will be hard to come out behind measuring Deluxe room against DVC room - but much harder to make it work if you are buying now. Now, its possible that DVC prices will continue to increase and you could own for the fifteen years we've owned and sell at a profit - but I wouldn't take that bet. And its possible that you could wait a year and DVC prices would come down - that isn't a bet I want to take since that means the economy has taken another dive.

 

[SarahC97]

We're actually renting points and staying at the Poly in January, so we'll experience DVC. I'm guessing if we ever do it that it'll be an emotional purchase. I love WDW and plan to go often, I would love to stay deluxe and this trip may ruin us to ever go back to value.

 

[LYSE]

We're actually renting points and staying at the Poly in January, so we'll experience DVC. I'm guessing if we ever do it that it'll be an emotional purchase. I love WDW and plan to go often, I would love to stay deluxe and this trip may ruin us to ever go back to value.

The good news is you can just keep renting points!

And when you run the numbers against renting it gets extremely tough....

We will be renting @ poly in April* too

*edited

 

[SarahC97]

The good news is you can just keep renting points!

And when you run the numbers against renting it gets extremely tough....

We will be renting @ poly in January too!

The Poly is our dream resort. I actually got a great deal for $11/point. There's five of us and we ended up saving quite a bit.

 

[LYSE]

The Poly is our dream resort. I actually got a great deal for $11/point. There's five of us and we ended up saving quite a bit.

Great deal...well getting hooked might become a factor

Have fun...we are waiting to see what we think of no daily mousekeeping and factor that into our decision of buying DVC in the future or not.

 

[aoconnor]

You can do the math a number of ways, but generally speaking buying resale DVC will get you a deluxe studio for around the price of a moderate resort. It is definitely more expensive than staying at a value resort.

 

[Mrs. W]

You're not the only one who really wishes she could be convinced that DVC made more financial sense. From an emotional standpoint, I really want to be a DVC member. Unfortunately, we can't make the math work out...no matter how many hoops I try to jump through. We're just not the right demographic...husband and wife, no kids, don't need a bigger room. But we love staying at deluxes. So instead, we rent points.

I think there are people out there who DVC does benefit and it's a great choice for them. I wish I was one of them!

I could have written this exact post. My husband and I have kicked around the idea a few times because we love the idea of it, but it makes no financial sense for us, at all. We're also childless adults.

We went on a Disney Cruise and were seated with a couple who benefited from the whole Aulani snafu and there's no question that they came out ahead financially, even as a childless couple. We were super envious!

 

[SarahC97]

I could have written this exact post. My husband and I have kicked around the idea a few times because we love the idea of it, but it makes no financial sense for us, at all. We're also childless adults.

We went on a Disney Cruise and were seated with a couple who benefited from the whole Aulani snafu and there's no question that they came out ahead financially, even as a childless couple. We were super envious!

What's the Aulani snafu?

 

[Mrs. W]

What's the Aulani snafu?

We actually had never heard the story until this couple told us about their experience. Apparently, from what they told us, the DVC president at the time completely undersold the Aulani timeshares for about a year. The dues were 33% less than what they should've been. Disney ended up firing the DVC president and a couple of other executives as a result. Disney suspended sales when they discovered the error, and adjusted the costs for new buyers, but the previous contracts were honored, resulting in lower maintenance fees for the life of the contracts. I cannot be 100% sure of what they told me they paid upfront, but I remember that I thought it was shockingly low. So with a low upfront cost and low maintenance fees, they made out like bandits.

 

[kristenrice]

You can do the math a number of ways, but generally speaking buying resale DVC will get you a deluxe studio for around the price of a moderate resort. It is definitely more expensive than staying at a value resort.

Not necessarily...it depends on when you go and where you stay...

Here's my real-world example:

I bought 100 points at AKV in 2008, receiving all 2008 points. That means I received 49 years worth of points (4900 points total, assuming for now that I plan to keep the contract until it expires) and I paid a total of $9200, or roughly $1.88/point. This was paid in cash and not financed.

Last week, I stayed in a value studio at AKV for 5 nights at a "cost" of 45 points. These were all 2017 points and the maintenance fees on those points were $6.59/pt. So, my stay "cost" $381.15, or $76.23 per night. If you were able to score a room anywhere on property for less than $80/night, I'd like to hear about it. Even if you argue that you could rent for that, I would again challenge anyone to find an owner willing to rent for less than $9/point.

In reality, I chose to buy DVC because I like the "vacation home" concept. I like having a kitchen, washing machine and jacuzzi tub in my villa. We have two daughters who were 3 and 5 when we bought. We enjoyed having them sleep in a different room so that we could stay up and watch TV without disturbing them. The laundry facilities in the room made it easy to pack light and not have to worry about spills and accidents. Now that the girls are teens, I really love the flexibility that DVC offers. Next year, I have 55 points that were banked and need to be used. DH has no desire to go on another Disney vacation (he just went last fall and he really only can handle one trip every 3-4 years) so it will be just the girls and I next fall. Even though I definitely prefer the 1BR, the girls understand that we will either stay in a studio, or they won't go.

To the OP, here's how I've made it work so far. We own 100 points at AKV and 50 points at HHI. Basically, I bank and borrow my AKV points and go to WDW two years in a row, using approximately 150 points each time, generally staying in a 1BR for 5 nights. In the "off" year, we use banking and borrowing of our HHI points and go there for Spring Break for 5 nights in a 1BR. I think we are a little backwards, though. As our kids have gotten older, I am more inclined to stay in the studios. When they were younger, I really wanted the 1BR, but now, I'd rather stay in the studio and go more often instead of staying in a 1BR and going less frequently.

Does it save me money? No, but it beats staying in a value resort and I don't have to hunt for bargains. The ticket discounts are great, but not guaranteed. The Tables In Wonderland has also saved us quite a bit since we really enjoy table-service dining. I would advise not looking at DVC as a financial savings, although it can save you money in certain circumstances, but rather as a way to upgrade your vacation for not much more than you'd pay for a moderate. Don't count on the benefits if you consider a purchase, but you can certainly keep them in mind. They are always subject to change, but I think that there will always be some sort of benefits that are exclusive to DVC members.

 

[Ben E N]

A couple years ago we splurged due to a gift and stayed at Bay Lake Tower. The experience of that proximity to the park changed our perspective and sadly we don't want to go back to the value options and we can afford not to.

This is exactly the situation I found myself in. Formerly in love with moderates, but now there is no way I want to go back after spending a week at BLT.

Not necessarily...it depends on when you go and where you stay...

Here's my real-world example:

I bought 100 points at AKV in 2008, receiving all 2008 points. That means I received 49 years worth of points (4900 points total, assuming for now that I plan to keep the contract until it expires) and I paid a total of $9200, or roughly $1.88/point. This was paid in cash and not financed.

Last week, I stayed in a value studio at AKV for 5 nights at a "cost" of 45 points. These were all 2017 points and the maintenance fees on those points were $6.59/pt. So, my stay "cost" $381.15, or $76.23 per night. If you were able to score a room anywhere on property for less than $80/night, I'd like to hear about it. Even if you argue that you could rent for that, I would again challenge anyone to find an owner willing to rent for less than $9/point.

In reality, I chose to buy DVC because I like the "vacation home" concept. I like having a kitchen, washing machine and jacuzzi tub in my villa. We have two daughters who were 3 and 5 when we bought. We enjoyed having them sleep in a different room so that we could stay up and watch TV without disturbing them. The laundry facilities in the room made it easy to pack light and not have to worry about spills and accidents. Now that the girls are teens, I really love the flexibility that DVC offers. Next year, I have 55 points that were banked and need to be used. DH has no desire to go on another Disney vacation (he just went last fall and he really only can handle one trip every 3-4 years) so it will be just the girls and I next fall. Even though I definitely prefer the 1BR, the girls understand that we will either stay in a studio, or they won't go.

To the OP, here's how I've made it work so far. We own 100 points at AKV and 50 points at HHI. Basically, I bank and borrow my AKV points and go to WDW two years in a row, using approximately 150 points each time, generally staying in a 1BR for 5 nights. In the "off" year, we use banking and borrowing of our HHI points and go there for Spring Break for 5 nights in a 1BR. I think we are a little backwards, though. As our kids have gotten older, I am more inclined to stay in the studios. When they were younger, I really wanted the 1BR, but now, I'd rather stay in the studio and go more often instead of staying in a 1BR and going less frequently.

Does it save me money? No, but it beats staying in a value resort and I don't have to hunt for bargains. The ticket discounts are great, but not guaranteed. The Tables In Wonderland has also saved us quite a bit since we really enjoy table-service dining. I would advise not looking at DVC as a financial savings, although it can save you money in certain circumstances, but rather as a way to upgrade your vacation for not much more than you'd pay for a moderate. Don't count on the benefits if you consider a purchase, but you can certainly keep them in mind. They are always subject to change, but I think that there will always be some sort of benefits that are exclusive to DVC members.

This is a great and workable example. However, in today's dollars, your example sadly does not work so well. Contracts now have less years remaining, and cost around $110 per point, not $92, so the numbers move more towards $2.56 per point. Add on fees of $6.59 per point and now your total cost is $30 more per trip. Not ridiculous, but worth noting. You also stayed in the cheapest DVC room, of which there are not many available, during the cheapest period, so you are picking a very specific scenario where it makes better financial sense. Kudos for you for making your money work so well for you, though! It is worth noting this this is a pretty specific example and that the same results should not be expected of the typical DVC user.

 

[cw62803]

I love being a DVC member. It's more expensive than staying at a value, but it is a much nicer vacation.

 

[kristenrice]

This is a great and workable example. However, in today's dollars, your example sadly does not work so well. Contracts now have less years remaining, and cost around $110 per point, not $92, so the numbers move more towards $2.56 per point. Add on fees of $6.59 per point and now your total cost is $30 more per trip. Not ridiculous, but worth noting. You also stayed in the cheapest DVC room, of which there are not many available, during the cheapest period, so you are picking a very specific scenario where it makes better financial sense. Kudos for you for making your money work so well for you, though! It is worth noting this this is a pretty specific example and that the same results should not be expected of the typical DVC user.

I agree...but it does make my point that, over time, DVC can save you money. Back in 2008, you could find value resort rooms for under $100/night, but the annual dues were also about $1/point less, making the same stay roughly $68/night. If I continue to stay in a value studio for the next 10 years, it will always* cost 45 points. If my maintenance fees increase 5% each year, bringing them to $10.79/pt by 2027, my actual cost for that vacation will still only be $113.49 per night. I imagine that the cost to stay in a value resort will be pushing $200 a night by then. I will also point out that a standard studio at AKV (more available than the value category) is only 60 points for the stay. In 10 years, that room would cost $152.04/night...again, a great bargain.

Right now, if you purchased 100 AKV points at $165/point ($16,500), you would receive 40 years of points (4000 points) which makes your buy-in cost $4.13/point. A standard studio in 2017 would cost between $108-$226 per night and that covers the entire year, including Christmas and New Year's. So even at today's costs, it is unlikely that you would find a value, or even a moderate, room on property for less than the actual cost of your DVC studio.

It is likely that the maintenance fees will increase at a much slower rate than the rack rates on Disney resort hotels. Since the points chart is "fixed", the gap between the cost of a hotel room and the "cost" of a DVC room booked with points will continue to widen.

*"Always" is not necessarily an absolute...I understand that point re-allocations have occurred and may very well occur again.

 

[Ben E N]

I agree...but it does make my point that, over time, DVC can save you money. Back in 2008, you could find value resort rooms for under $100/night, but the annual dues were also about $1/point less, making the same stay roughly $68/night. If I continue to stay in a value studio for the next 10 years, it will always* cost 45 points. If my maintenance fees increase 5% each year, bringing them to $10.79/pt by 2027, my actual cost for that vacation will still only be $113.49 per night. I imagine that the cost to stay in a value resort will be pushing $200 a night by then. I will also point out that a standard studio at AKV (more available than the value category) is only 60 points for the stay. In 10 years, that room would cost $152.04/night...again, a great bargain.

*"Always" is not necessarily an absolute...I understand that point re-cations have occurred and may very well occur again.

I'm in the same boat as you, only a few years behind. I hope that rooms increase by 50% in their cost over the next ten years. This will make my decision to buy in right now seem ever better in a financial sense. However, I see reports showing that hotels outside of Disney are going to be offering 60 day fastpass+ reservations, for $76 a night, and I realize that this purchase that I made was not out of financial prudence. If I can save money over the long haul, that will be awesome. If not, I still know that a few nights per year, I will get to wake up and have my coffee overlooking Bay Lake. For me, that made the buy in cost worth it.

 

[skippytx]

Some of the discussion reminds me of this quote

“A luxury, once enjoyed, becomes a necessity.”

― C Northcote Parkinson

That quote hits home with lately. I used to not care about hotel rooms, now I'm willing to spend a more for a nicer room. I used to only wear cheap sunglasses until I got my first really nice pair, now I couldn't go back. The list goes on and on, but yeah.

I did some quick back of the napkin math, staying at BLT "costs" me about 1200 bucks for 7 nights in a standard studio during Texas spring break (139 pts). The least expensive room at the Contemporary is has a rack rate of $515 a night, but I would never pay that. We can stay in a studio at BLT for 7 nights for about the cost of a standard room at Pop.

With the way WDW hotel prices have been climbing the last couple of years, we felt it was a good time to buy DVC. Our 2015 trip in an AoA Family suite was around 350 a night I think. Same room goes for 500 a night right now. Dues will go up of course, but not at that sort of rate.

 

[Ben E N]

Some of the discussion reminds me of this quote

“A luxury, once enjoyed, becomes a necessity.”

― C Northcote Parkinson

That quote hits home with lately. I used to not care about hotel rooms, now I'm willing to spend a more for a nicer room. I used to only wear cheap sunglasses until I got my first really nice pair, now I couldn't go back. The list goes on and on, but yeah.

Quite off topic, but that is why I refuse to try good scotch until I am at least 50. I am saving myself thousands that way.
Same reason that I do not recommend people rent DVC unless they are prepared to want to purchase as well. Once you try it, you may not want to go back to cheaper lodging.

 

[SarahC97]

These are all great and thoughtful responses, thank you.

We're still going to the presentation with an open mind, so I guess anything is possible!

 

[4luv2cdisney]

How do you make DVC make financial sense?

It's called Mickey Math. Don't worry, it's not hard. "If you can dream it, you can do it". It's based on the 3 basic principles of faith, trust and pixie dust

 

[Stratus22]

Anything is possible. You just have to play with the numbers and see what works for you and your family. We knew we could do it and went for it.

 

[jodifla]

DVC is basically a luxury purchase. I agree that we have enjoyed being DVC members, but we are probably spending 2 to 3 times what we were before. But we are also enjoying Disney more.

Rather than focus on cost savings, I would make sure everything else is in good shape before considering DVC.
1) You can pay cash.
2) You are on track to have a fully funded retirement.
3) You are on track to pay for college for the kiddies.
4) You have paid down all consumer debt except possibly your mortgage.
5) If you were to lose your job or have a financial setback, you have an emergency fund.

If you can answer yes to all this, then DVC is something you should consider as an alternative to buying a boat, a house in the mountains, or other luxury purchases that may interest you.

If you come every year and stay at deluxes, then there is some cost savings. If you only come every other year, the cost savings diminishes because of the time value of money. If you like mods or values, then there may be no cost savings for you.

We broke most of your rules 21 years ago when we bought and have been delighted with our purchase. We bought before we had children and had it paid it off before kids came along.

This worked out great for us. We paid a fraction what it costs now, and we now have our college savings and retirement largely set as well as a large emergency fund.

And we have had 21 years of fabulous vacations, treating family and friends to accommodations they would have not been able to afford otherwise.

I am so glad we didn't walk away in the mid 90s like others did, only to buy 10 or 15 years later at much increased prices.