Dues Rules

[Katie L]

Hey y'all - we've been thinking about DVC for a year. Really. A year. Thankfully, in that year, prices haven't changed much (lol).

One of the things I've done with my most recent spreadsheet - is calculate out dues based on historical increases. But I've noticed some of the dues increases jump around a lot. I basically understand how dues work for any HOA/condo situation - are there rules about the percentage that dues can increase every year?

The biggest one I noticed was SSR jumping like 9% I think it was last year - where it has an average of 4% since opening. Or maybe it was BLT - which has averaged 6.4% since opening. Man, there are so many components it's hard to keep straight!

This group has been beyond invaluable. Thank you all so much for your expertise.

 

[KAT4DISNEY]

They are capped at a 15% increase on the operating budget. Capital reserves and the property real estate taxes are not capped.

This past year was a larger than normal increase - assumed to have occurred due to the wage increases negotiated with the employee unions that went into effect. In general the increases have been more in the 3-4% range. The wage increases are being done over a multi year timeframe - 3 years I think but I believe it was front weighted - at least I'm hoping this year was the worst.

 

[crvetter]

They are capped at a 15% increase on the operating budget. Capital reserves and the property real estate taxes are not capped.

This past year was a larger than normal increase - assumed to have occurred due to the wage increases negotiated with the employee unions that went into effect. In general the increases have been more in the 3-4% range. The wage increases are being done over a multi year timeframe - 3 years I think but I believe it was front weighted - at least I'm hoping this year was the worst.

Agreed they claimed at the annual meeting in December that the bulk of the increase was wage and we should expect more over the next 2 years. I got the impression the next two wouldn’t be as dramatic. Basically $3 of the $5 of the raise were front loaded.

Taken from an article (https://www.orlandosentinel.com/g00/business/tourism/os-disney-contract-wage-increase-20180827-story.html?i10c.ua=4&i10c.encReferrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8=&i10c.dv=5) how the pay structure will increase:
“Disney’s pay for hourly full-time and part-time employees will increase to $11 by December, $13 in September 2019, $14 in October 2020 and finally $15 in October 2021.”

 

[blueant315]

We are birds of a feather! I have a similar spreadsheet and have been researching DVC since April 2018. We just put a contract in on BWV last weekend and are waiting on ROFR. I assumed increases of 3% per year for all the resorts I am considering, as that is what they have averaged over their life. Good luck deciding and getting a contract with your desired terms!

 

[disneynutz]

I would go with 5% as a worse case. Just wait until you see the total if you keep the contract full term!

Bill

 

[Katie L]

I would go with 5% as a worse case. Just wait until you see the total if you keep the contract full term!

Bill

Why do you think I've waited a year to pull any sort of trigger... Even at a 10 year sunset, the dues far outpace the original price of the contract. This is a lot of why my husband keeps questioning whether it makes any sort of financial sense at all.

 

[KAT4DISNEY]

Why do you think I've waited a year to pull any sort of trigger... Even at a 10 year sunset, the dues far outpace the original price of the contract. This is a lot of why my husband keeps questioning whether it makes any sort of financial sense at all.

The first question is if you plan to continue to visit and want to stay onsite? Since the hotel rooms also go up that's the comparison. Right now the cost of a week in YC or BC or CR is incredible IMO. Yes, dues increase but so do the hotel rooms. If you're good with staying offsite to save on funds then DVC won't make sense.

 

[bumbershoot]

Even at a 10 year sunset, the dues far outpace the original price of the contract.

Maybe I’m misunderstanding (not a surprise as some of the intricacies people talk about in these boards boggle my mind), but I’ve owned since 2009. The same 160 point Bay Lake contract. Purchased direct and with a loan. This year my dues are $991. Even ignoring the interest I paid for a few years on the loan, the total I’ve paid in dues is still much less than what I paid for the points. If I were purchasing direct today it would be even longer to hit the total.

But maybe I misunderstand what you mean.


And although we were NOT taking Dvc-like trips before (Dvc allowed us to upgrade massively), if we had been staying at villas already and paying cash, I remember calculating that our first couple trips would have cost all the money of the initial point purchase.

With that way of thinking, all the rest of the trips have been paid for with dues. Given how often we went for awhile and then the length of stays and nowadays the quality of the stays, I feel it’s a bargain still.

And compared to other things I do, it’s still a bargain. This will be the 5th summer my son is attending a huge dance convention. And to stay near the convention (allows more sleep) will be nearly 2k for a week. Not even a mini-kitchen etc. Just a hotel room. Maybe I should get a timeshare down there, too, lol. (Hmm)

 

[Spartan86]

Even at a 10 year sunset, the dues far outpace the original price of the contract.

YMMV, but we have 557 points purchased in 2017 and early ‘18. Starting with total cost including dues, closing etc my out of pocket doubles at 13-15 years depending on 3 or 5% average MF increase. Just throwing that out for what it’s worth. Your point about dues being the real story is forever true.

 

[blueant315]

Maybe I’m misunderstanding (not a surprise as some of the intricacies people talk about in these boards boggle my mind), but I’ve owned since 2009. The same 160 point Bay Lake contract. Purchased direct and with a loan. This year my dues are $991. Even ignoring the interest I paid for a few years on the loan, the total I’ve paid in dues is still much less than what I paid for the points. If I were purchasing direct today it would be even longer to hit the total.

But maybe I misunderstand what you mean.


And although we were NOT taking Dvc-like trips before (Dvc allowed us to upgrade massively), if we had been staying at villas already and paying cash, I remember calculating that our first couple trips would have cost all the money of the initial point purchase.

With that way of thinking, all the rest of the trips have been paid for with dues. Given how often we went for awhile and then the length of stays and nowadays the quality of the stays, I feel it’s a bargain still.

And compared to other things I do, it’s still a bargain. This will be the 5th summer my son is attending a huge dance convention. And to stay near the convention (allows more sleep) will be nearly 2k for a week. Not even a mini-kitchen etc. Just a hotel room. Maybe I should get a timeshare down there, too, lol. (Hmm)

Someone recommended budgeting a 5% increase in dues each year. That would make my dues higher than my purchase price for the BWV contract I for which I am ROFR over the next 10 years. No one's assuming dues will remain stagnant, so it just depends on how much you're projecting them to increase. I personally anticipate I will pay more in dues at the 10 year mark than my purchase price. Hopefully I'm wrong

 

[KAT4DISNEY]

Someone recommended budgeting a 5% increase in dues each year. That would make my dues higher than my purchase price for the BWV contract I for which I am ROFR over the next 10 years. No one's assuming dues will remain stagnant, so it just depends on how much you're projecting them to increase. I personally anticipate I will pay more in dues at the 10 year mark than my purchase price. Hopefully I'm wrong

The comparison is still what you would pay for other accommodations over the years. Not if the purchase price is more or less than the dues.

 

[Lorilais_mommie]

And although we were NOT taking Dvc-like trips before (Dvc allowed us to upgrade massively), if we had been staying at villas already and paying cash, I remember calculating that our first couple trips would have cost all the money of the initial point purchase.

With that way of thinking, all the rest of the trips have been paid for with dues. Given how often we went for awhile and then the length of stays and nowadays the quality of the stays, I feel it’s a bargain still.

Every time we plan a trip We priced out what a room would cost us at our favorite moderate resort (port Orleans French quarter) our dues have ALWAYS been less.
Example:
This year for the 8 nights we like to travel would cost $2400 just for the room at Port Orleans.. My dues this year (w/ the big increase) were $1803. So not only do we save almost $600, we upgrade to a deluxe resort,1 bedroom, with full kitchen, and a washer and dryer.. And I still have 40points left over to bank/use.

 

[disneynutz]

While there may be a cost savings owning DVC if you vacation at Disney every year or two, but for many owning DVC causes you to spend more money at Disney than prior to you buying.

Bill

 

[CarolMN]

While there may be a cost savings owning DVC if you vacation at Disney every year or two, but for many owning DVC causes you to spend more money at Disney than prior to you buying.

Bill

Agree! Very few of us keep to the same pattern we used to do the financials justifying the purchase. We end up going more often, staying longer, treating friends and family, staying in larger rooms, etc.

DVC is a commitment as well as a luxury purchase. IMO, it should be purchased from disposable income and only after other priorities are properly funded. (Can you tell I worked in the financial services industry)?

 

[Katie L]

Agree! Very few of us keep to the same pattern we used to do the financials justifying the purchase. We end up going more often, staying longer, treating friends and family, staying in larger rooms, etc.

DVC is a commitment as well as a luxury purchase. IMO, it should be purchased from disposable income and only after other priorities are properly funded. (Can you tell I worked in the financial services industry)?

No doubt about that!

Someone recommended budgeting a 5% increase in dues each year. That would make my dues higher than my purchase price for the BWV contract I for which I am ROFR over the next 10 years. No one's assuming dues will remain stagnant, so it just depends on how much you're projecting them to increase. I personally anticipate I will pay more in dues at the 10 year mark than my purchase price. Hopefully I'm wrong

Right? Dang compounding interest.

The reality - is Disney costs money. Those costs only go up. You are locking in lodging at "today's prices" - but you're still going to be spending on tickets (that increase much faster than inflation) etc, etc.

 

[blueant315]

You are locking in lodging at "today's prices" .

As you've noted above and obviously are aware of yourself, you're only locking in today's prices for a small portion of what the total cost of DVC ownership will be. I think this is why so many seasoned members mention this so passionately to us novices. When looking at purchase price, it's only a small portion of what needs to be considered. Dues fluctuate with inflation (and other things), so you're locking in nothing there. I'm purchasing BWV via resale (so shorter life) and I'm projecting my purchase price will be approx. 1/3 of my total expenses of my lodging over the life of the contract. I'm also looking at a monorail resort and the purchase price is probably more like 20%. PS - I am only using 3% annual increases in these numbers - so the % would be even lower with the 5% recommendation noted above.

I think pretty much everyone on this board would say DVC membership offers some intrinsic value that can't be valued with $, plus there are some cost savings to be had for making a cash investment in DVC that spans many years. But they're probably not as high as most people think they are when they buy in based on how Disney markets it.

 

[Bing Showei]

Someone recommended budgeting a 5% increase in dues each year. That would make my dues higher than my purchase price for the BWV contract I for which I am ROFR over the next 10 years. No one's assuming dues will remain stagnant, so it just depends on how much you're projecting them to increase. I personally anticipate I will pay more in dues at the 10 year mark than my purchase price. Hopefully I'm wrong

You’re not wrong. Buy-in is only the tip of the iceberg. Bulk of cost will be dues. For sites like HHI, and VB, the buy in allure is dangerous because underneath is a DiCaprio-into-the-abyss sized chunk of ice.

 

[kniquy]

Even at a 10 year sunset, the dues far outpace the original price of the contract. This is a lot of why my husband keeps questioning whether it makes any sort of financial sense at all.

If you plan to travel to WDW yearly or at least every other year then buying in will provide you savings compared to direct hotel rooms. That is where you realize the savings. Over the life of the contract the MF do make up the majority of what you have invested in these vacations.

If your husband is having a hard time with the increasing MF then just look at a comparison between even a DVC rental and direct Disney prices. Now consider that owning would cost less than even the DVC rental. Rentals privately and though Davids DVC are now going for upwards of $17-18 per point.

Hotel costs and the rental market prices will continue to rise. So as well our dues will rise.

You really can't get away from rising costs anywhere.

You can fight the MF increases a little buy purchasing discounted Disney gift cards to use in paying for your dues. It is amazing how much the savings can add up over time.

 

[Katie L]

If you plan to travel to WDW yearly or at least every other year then buying in will provide you savings compared to direct hotel rooms. That is where you realize the savings. Over the life of the contract the MF do make up the majority of what you have invested in these vacations.

If your husband is having a hard time with the increasing MF then just look at a comparison between even a DVC rental and direct Disney prices. Now consider that owning would cost less than even the DVC rental. Rentals privately and though Davids DVC are now going for upwards of $17-18 per point.

Hotel costs and the rental market prices will continue to rise. So as well our dues will rise.

You really can't get away from rising costs anywhere.

You can fight the MF increases a little buy purchasing discounted Disney gift cards to use in paying for your dues. It is amazing how much the savings can add up over time.

I've heard of the Target discounted gift cards. Are there others?

 

[kniquy]

I've heard of the Target discounted gift cards. Are there others?

I think Sam's club and possibly costco, but not positive. I just sporadically buy Disney gift cards for use on our trips and for dues.

There is a budge board on the forum which might have more info on the discount disney cards