DVCDisneyRunner
Mouseketeer
- Joined
- May 28, 2015
DVC Resale Market has a ranking of the most economical resorts on their website, however I never thought their methodology made any sense. It uses a very simplistic approach that doesn't take into consideration Time Value of Money. This leads to over valuing resorts that have high purchase prices, but low maintenance fees. I went back and used the same methodology, except I factored in things like expected US inflation, and increases to maintenance fees. Here are my results:
Assumptions Used:
Maintenance Fees increase on average by 4% annually.
US Inflation Rate is 2%
Purchase Price used is DVC Resale Market's average resale purchase price for April 2019.
Initial Maintenance Fees are the 2019 amounts.
Resort Cost Per Point (My Calculation) Ranking (My Calculation) Cost Per Point (DVC Resale Market) Ranking (DVC Resale Market) Saratoga Springs 11.89 1 9.31 1 Boulder Ridge 12.98 2 11.58 10 Old Key West 12.99 3 11.75 11 Bay Lake Tower 13.06 4 9.94 2 Grand Floridian 13.45 5 9.97 3 Animal Kingdom 13.65 6 10.33 6/7 Grand Californian 13.94 7 11.10 9 Hilton Head 14.01 8/9 11.99 12 Polynesian 14.01 8/9 10.02 4
Boardwalk 14.25 10 12.91 14 Beach Club 14.42 11/12 12.98 15 Aulani 14.42 11/12 10.33 6/7 Vero Beach 14.69 13 12.52 13 Copper Creek 15.09 14 10.37 7
It's important to note that these results don't factor in things like point charts, or any non-quantitative measures of desirability. It is strictly an average cost per point available over the duration of the contract.
Edit: I can't figure out how to fix the second table to match the first.
How long one intends to hold onto the contract will be yet another factor to consider when calculating cost per point.
Lets say you purchase resort A with 25 years for 100 and 5 dollar MF's and I purchase resort B for 150 with 47 years and 5 dollar MF's at the end of 25 years you have no value left and I sell for cost plus inflation.
Or we both purchase resort C and you hold for the life of the contract (25+ years) but I sell at 10 years for the cost plus inflation.
In both these situations I would come out paying less per point than you based on your analysis. However, In the first example resort A would appear to have been the better buy over resort B and in the second example your cost per point and my cost per point would not be the same because we have different exit points.
It is all these unknowns that leads places like the one you referenced to go with the simplest comparison. Once you start trying to predict inflation vs MF increases, how long one may or may not remain a member... you start to create the out come you are looking for which many of us have done to come to the conclusions we have when purchasing DVC. No real right or wrong approach just very individualized.