What makes DVC worth investing in?

When renting, you lose all control. You can’t make changes easily-you can’t walk hard to get reservations, you can’t add waitlists, and there’s a risk you could get screwed by the owner (outright stealing or they might fail to pay their MFs for some reason which could cancel your room).

You can get trip insurance for your trip (I see some on this sub buy it for their own DVC points anyways so its a semi-wash) to cover yourself on the non-refundable piece that is the whole DVC rental. As far as all the other stuff if you are willing to pay there likely is someone willing to do it. I rented points that allowed you to move the stay within the UY if needed and you just cover any additional charges for the change.

Flip side there is a risk Disney strips benefits, tries to tank your resale value through changes, or decides the DVC resorts are the perfect spot to pay 2x the standard pay as a reward to senior employees and avoiding the cost themselves by passing it to owners.

As someone looking at buying there are risks and unknown on both sides.

Its great to hear both sides of all of this and words of caution though before jumping in to something.
 
Let's assume your 9% ROR and a stagnant hotel rack rate. Using my example of 223 points at BWV @$190 per point which comes out to $42,370...$1,600 in dues.

Here is me investing 42,370 in a 9% account and adding $1,600 every year (and then subtracting out hotel cost). I am keeping hotel cost the same every year and increasing the dues by 4% every year.

Even with this very generous scenario, you run out of cash after 8 years. As soon as I increase hotel costs by 4% annually, you run out of money after 6 years.

Now after this you own nothing. You have spent $75,000 on hotel costs and own nothing.

With DVC, you stay for 8 years, pay your dues and still own your contract which can be sold. So not only is it a no brainer cost wise, you still hold an asset after all of this!

It's really not close.

And this is literally the worst case scenario. This is a BWV contract at direct rates with only 23 years remaining AND without hotel increases. The math with an SSR contract resale and realistic hotel price increases is far more damning.

This is why rack rates aren't even really a controversial comparison to DVC. Almost everyone agrees that it's a no brainer vs. rack rates. It's moderate pricing, potential discounted rack rates and rental prices that make the math harder.
 

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We rented several times through a broker over the last few years. We are also Annual Pass holders. We rented in December 2018 a 2br at AKV Jambo House and a value studio at Jambo House via a broker. 11 months out. I am a planner so the 11 months is nothing to me. We upgraded our tickets to APs during that trip.

In April, we got a great deal at AKL $260/night with the AP discount. We toured DVC (I wanted the giftcards and fast passes) and to my surprise my husband is the one who said that we needed to buy. We go to Disney every year (just us sometimes - we are 50 now) or sometimes more family. So, upgrading to APs was a no brainer and now we have DVC we can still stay in Deluxe resorts for moderate prices. We bought direct so that we could be one of the "cool kids". I am already stalking resale market for 100 more.

I don't regret our purchase at all. We are going back in September and member services was able to get our welcome home booking at BCV. 2 studios during prime Food & Wine festival. That was some "Pixie dust" for sure. My husband says we are already working towards breaking even with that one booking. Pricing out the 2 Deluxe studios at BCV for September 2019. We are getting a 2 bedroom at Jambo House in May. We paid our MFs and the savings in upgrading 3 APs will cover that expense-mostly.

So for us, at this time in our lives (4 kiddos graduated college, 3 weddings paid for, and 6 grandchildren)-we have the money and time to invest. I wish we would have bought resale a couple of years ago before the restrictions.
 
Let's assume your 9% ROR and a stagnant hotel rack rate. Using my example of 223 points at BWV @$190 per point which comes out to $42,370...$1,600 in dues.

Here is me investing 42,370 in a 9% account and adding $1,600 every year (and then subtracting out hotel cost). I am keeping hotel cost the same every year and increasing the dues by 4% every year.

Even with this very generous scenario, you run out of cash after 8 years. As soon as I increase hotel costs by 4% annually, you run out of money after 6 years.

Now after this you own nothing. You have spent $75,000 on hotel costs and own nothing.

With DVC, you stay for 8 years, pay your dues and still own your contract which can be sold. So not only is it a no brainer cost wise, you still hold an asset after all of this!

It's really not close.

And this is literally the worst case scenario. This is a BWV contract at direct rates with only 23 years remaining AND without hotel increases. The math with an SSR contract resale and realistic hotel price increases is far more damning.

This is why rack rates aren't even really a controversial comparison to DVC. Almost everyone agrees that it's a no brainer vs. rack rates. It's moderate pricing, potential discounted rack rates and rental prices that make the math harder.


A) You know what you just did right? You did a financial analysis! You found that the break even was after 8 years. Had you done back of the napkin math, the break even would have been only 5 years. You would have made an uninformed decision!

B) I'm looking at BWV point charts and I don't see a single scenario where a week at a 2BR is 223 points. For fun, I used the exact same example, but ran it for the week of Halloween. Assuming no discount on rack rates, the break even is now after 9 years. Assuming a 20% discount, but 4% annual inflation on rack rates, your break even is 11 years.

Using rental points as the alternative (even assuming 4% inflation), you never break even. In fact, in this scenario, DVC cost you 93K over 23 years. Had you invested, you would have 115K (or 73K in today's dollars) at the end plus vacationed for "free" for 161 nights. So in exchange for the flexibility that owning DVC provided you vs renting, you paid a premium of $450 per night (today's dollars). Now it's up to you to decide whether that premium for the flexibility is worth it.
 


A) You know what you just did right? You did a financial analysis! You found that the break even was after 8 years. Had you done back of the napkin math, the break even would have been only 5 years. You would have made an uninformed decision!

B) I'm looking at BWV point charts and I don't see a single scenario where a week at a 2BR is 223 points. For fun, I used the exact same example, but ran it for the week of Halloween. Assuming no discount on rack rates, the break even is now after 9 years. Assuming a 20% discount, but 4% annual inflation on rack rates, your break even is 11 years.

Using rental points as the alternative (even assuming 4% inflation), you never break even. In fact, in this scenario, DVC cost you 93K over 23 years. Had you invested, you would have 115K (or 73K in today's dollars) at the end plus vacationed for "free" for 161 nights. So in exchange for the flexibility that owning DVC provided you vs renting, you paid a premium of $450 per night (today's dollars). Now it's up to you to decide whether that premium for the flexibility is worth it.
Haha I don't think you really understand. That "financial analysis" is so one sided it didn't need to happen. I just I did it for arguments sake. It's incredibly obvious. And my 5 year back of the napkin estimate is still correct. The only reason its 8 years in my example is because I gave you the benefit of the doubt (no increases to hotel prices, and a guaranteed ROR of 9%). If I had done realistic numbers it may even be less than 5 years.

A 2 bedroom is 220 points for a standard view during adventure season. I said 223 because my example was for a week that bled into choice season, hence the extra 3 points. I did this because I have this exact week booked and looked at the cash price for the same exact dates. Like I said, the rental argument is perfectly valid, this is where I leave the convo. I am specifically comparing to rack rates. The rental rates make it a very difficult decision if you are okay with the lack of flexibility it offers.

But to be honest, if you don't plan on keeping DVC for over 10 years, you aren't a candidate to buy anyways. At least in my opinion.
 
Haha I don't think you really understand. That "financial analysis" is so one sided it didn't need to happen. I just I did it for arguments sake. It's incredibly obvious. And my 5 year back of the napkin estimate is still correct. The only reason its 8 years in my example is because I gave you the benefit of the doubt (no increases to hotel prices, and a guaranteed ROR of 9%). If I had done realistic numbers it may even be less than 5 years.

A 2 bedroom is 220 points for a standard view during adventure season. I said 223 because my example was for a week that bled into choice season, hence the extra 3 points. I did this because I have this exact week booked and looked at the cash price for the same exact dates. Like I said, the rental argument is perfectly valid, this is where I leave the convo. I am specifically comparing to rack rates. The rental rates make it a very difficult decision if you are okay with the lack of flexibility it offers.

But to be honest, if you don't plan on keeping DVC for over 10 years, you aren't a candidate to buy anyways. At least in my opinion.


We're never going to come to an agreement, so we'll just have to agree to disagree. Having said that, I do agree with you on one point. That person who wants to (1) stay at the same resort year after year and, (2) always go at that perfect time of the year where the DVC point charts are at their lowest and rack rates are atleast at their median point and, (3) would otherwise pay rack rate and not care about discounts and, (4) wants full control of their reservation and doesn't care how much more it costs to do that and, (5) wants to stay in the 2 BRs and, (6) can afford DVC, doesn't need to do a financial analysis. They can rely on back of the napkin math and get close enough where there is no material difference to them.
 
I made a reservation for 2br @ VGF. Something happened when I checked in and I was told I was not there on points. I had to pay cash. I told the CM that I definitely definitely had a points reservation. Either way, I gave the CM my credit card so we could check in and hit the pool. I saw $1,789.00 !!!!! light up on the register HAAAAA There is no way in the world I would pay that kind of price for 1 night. But 49 or 59 points doesnt seem too bad. Thats what makes it worth investing in to me.
 



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