Are you going to buy points at the Polynesian Villas & Bungalows?

[LuvtheGoof]

Interesting. Could the low points purchases possibly be due to the lack of one and two bedroom units, with basically only the studios and the bungalows as options? Perhaps, even those who like the larger studios, feel that as their family grows, the studios won't be enough.

That's keeping us from there. Even if it's just my wife and I, we prefer a 1 bdr over a studio. We won't get less than a 2 bdr with the kids, but we won't stay in one of the bungalows. Just too many points. We'd have to bank an entire year, and borrow a partial year to afford a week in one. Not going to happen!

 

[slappy magoo]

I really can't help but think DVC $crewed the proverbial pooch with no 1BR options and such a high point rate for the bungalows. I added the dollar sign to avoid censorship but really, it's apt.

 

[CaptainAmerica]

I've done the math on these DVC and it seems like it's way too high upfront money then yearly maintenance fees each year cost more than a trip.

Yeah from a strictly financial perspective, DVC is a terrible product. Loss of flexibility, loss of liquidity, loss of control, "savings" based on rack rate projections that nobody will ever pay, etc. I have nothing against DVC or its members, but hopefully the majority of those folks are well aware that they're really paying a premium for the right be to called "member" rather than coming out ahead through the financial wizardry of "vacation ownership."

That said, DVC is far better than just about any other timeshare program because it trades highly on the exchanges and you can dump it fairly easily on the secondary market if necessary.

 

[WWWD]

Yeah from a strictly financial perspective, DVC is a terrible product. Loss of flexibility, loss of liquidity, loss of control, "savings" based on rack rate projections that nobody will ever pay, etc. I have nothing against DVC or its members, but hopefully the majority of those folks are well aware that they're really paying a premium for the right be to called "member" rather than coming out ahead through the financial wizardry of "vacation ownership."

That said, DVC is far better than just about any other timeshare program because it trades highly on the exchanges and you can dump it fairly easily on the secondary market if necessary.

"From a strictly financial perspective," most products are terrible. Many things fall in this category: most cars, any boat, some houses, designer clothes, all restaurants (well, not fast food, but that's a totally different animal), etc.......

 

[CaptainAmerica]

"From a strictly financial perspective," most products are terrible. Many things fall in this category: most cars, any boat, some houses, designer clothes, all restaurants (well, not fast food, but that's a totally different animal), etc.......

Oh I agree. But DVC isn't marketed as an essentially frivolous product that you're buying because you like it. It's marketed as some kind of investment that'll "pay for itself" over the years or some such.

 

[GoofGoof]

Oh I agree. But DVC isn't marketed as an essentially frivolous product that you're buying because you like it. It's marketed as some kind of investment that'll "pay for itself" over the years or some such.

You are prepaying for deluxe resort hotel rooms. How is that not a frivolous product? Any trip to WDW is a frivolous product and generally a poor financial investment.

DVC should not be considered a financial investment at all. It's a luxury purchase. For some owners they may actually end up selling their points for more than what they paid, but that's not a guarantee and isn't really common. I bought my BLT points for $90 and could sell them now for a small profit after paying the commission to the broker, but that's not happening any time soon if you buy in today at $165. In the last 5 years my MFs were $600-$800 a year which is about what I would have been paying for a room at the all stars so for me it has come pretty close to paying for itself already.

 

[LuvtheGoof]

Yeah from a strictly financial perspective, DVC is a terrible product. Loss of flexibility, loss of liquidity, loss of control, "savings" based on rack rate projections that nobody will ever pay, etc. I have nothing against DVC or its members, but hopefully the majority of those folks are well aware that they're really paying a premium for the right be to called "member" rather than coming out ahead through the financial wizardry of "vacation ownership."

That said, DVC is far better than just about any other timeshare program because it trades highly on the exchanges and you can dump it fairly easily on the secondary market if necessary.

DVC is absolutely a luxury purchase, and is NOT an investment. It was never marketed to us as an investment that would pay any kind of dividends down the road. Did you have a DVC rep actually tell you that? Hmmm, have to disagree on paying the premium, though. We have taken 16 trips already as DVC owners. I have a spreadsheet that details exactly what we have paid into DVC, to include the maintenance fees. From that, for each of our trips, I check to see if there was a possible discount on a room where we were staying, and even if we couldn't get that rate, I used that rate in my spreadsheet. For some of our trips, I used a 30% discount on the room rate, a few others it was only 25%, and for some there were no discounts available (there aren't discounts for every room type all the time, you know). So far, we have saved over $12,000 on our resort costs! Not an insignificant amount, wouldn't you say?

Of course, I hope that your argument isn't going to be that I could have stayed Value or off-site and saved money. Please. We are deluxe snobs and will NEVER stay in a Value resort, or stay off-site. We have stayed at a few Moderates - POR, POFQ, FW cabins, and we liked those, but we paid cash for those before we became DVC members.

Is it for everybody? NO! If you are going to stay Value or off-site, if you are looking for a return on your money, if you aren't going to Disney at least every other year, if you haven't decided that you want to vacation at Disney for the next 30-40 years, then DVC is NOT for you. For us, everything fell into place, and we are happy to save money every trip. As an example, we just stayed in a 1 bedroom DVC villa at the Grand Floridian. It was 395 points for our 8 night stay. Since we only pay maintenance fees of $5.17 per point, our cost for this trip was approx. $2,042. In researching what it would have cost us to stay there with cash, it was just over $7,000, not including the resort and county taxes. Think about that. We stayed at the Grand Floridian for OVER $5,000 LESS than someone paying cash for the exact same room. Please tell me that isn't SIGNIFICANT savings. And we will get those kind of savings, and sometimes even better from other stays in the future.

 

[CaptainAmerica]

DVC is absolutely a luxury purchase, and is NOT an investment. It was never marketed to us as an investment that would pay any kind of dividends down the road. Did you have a DVC rep actually tell you that? Hmmm, have to disagree on paying the premium, though. We have taken 16 trips already as DVC owners. I have a spreadsheet that details exactly what we have paid into DVC, to include the maintenance fees. From that, for each of our trips, I check to see if there was a possible discount on a room where we were staying, and even if we couldn't get that rate, I used that rate in my spreadsheet. For some of our trips, I used a 30% discount on the room rate, a few others it was only 25%, and for some there were no discounts available (there aren't discounts for every room type all the time, you know). So far, we have saved over $12,000 on our resort costs! Not an insignificant amount, wouldn't you say?

Of course, I hope that your argument isn't going to be that I could have stayed Value or off-site and saved money. Please. We are deluxe snobs and will NEVER stay in a Value resort, or stay off-site. We have stayed at a few Moderates - POR, POFQ, FW cabins, and we liked those, but we paid cash for those before we became DVC members.

Is it for everybody? NO! If you are going to stay Value or off-site, if you are looking for a return on your money, if you aren't going to Disney at least every other year, if you haven't decided that you want to vacation at Disney for the next 30-40 years, then DVC is NOT for you. For us, everything fell into place, and we are happy to save money every trip. As an example, we just stayed in a 1 bedroom DVC villa at the Grand Floridian. It was 395 points for our 8 night stay. Since we only pay maintenance fees of $5.17 per point, our cost for this trip was approx. $2,042. In researching what it would have cost us to stay there with cash, it was just over $7,000, not including the resort and county taxes. Think about that. We stayed at the Grand Floridian for OVER $5,000 LESS than someone paying cash for the exact same room. Please tell me that isn't SIGNIFICANT savings. And we will get those kind of savings, and sometimes even better from other stays in the future.

Like I said, nothing against DVC or its members. Just refreshing to hear that you went into it with eyes wide open. But I'm sure you realize that not every member is as savvy as you. Also, the one thing missing from your model is the 10% annual return you could have made on your initial expenditure had you invested it.

 

[LuvtheGoof]

Like I said, nothing against DVC or its members. Just refreshing to hear that you went into it with eyes wide open. But I'm sure you realize that not every member is as savvy as you. Also, the one thing missing from your model is the 10% annual return you could have made on your initial expenditure had you invested it.

Nope, didn't miss that at all, we just chose to buy DVC instead. Our initial investment was about $31,000, so even at 10% every year (would like to know where you can get THAT rate nowadays), that's only $3,100. A far cry from the $7,000 we would have needed for this last vacation, and it's not the only one we are taking there this year. We would still have to spend upwards of $7-8 thousand dollars MORE out of pocket, instead of spending $0 and just using our points.

Everyone likes to point out the "investment" you should have made, and the "value" of money, but they don't seem to get that DVC is a luxury purchase, and should not be made by someone living paycheck to paycheck that has to save for 2 years to go to Disney and stay at a value resort. Heck, I drive a $45,000 Lincoln for my car, so paid more for it than my DVC points. I LOVE my car, but I COULD have invested the money as well. We chose not too. We like the finer things in life, and DVC is one of those things. YMMV.

 

[GoofGoof]

Like I said, nothing against DVC or its members. Just refreshing to hear that you went into it with eyes wide open. But I'm sure you realize that not every member is as savvy as you. Also, the one thing missing from your model is the 10% annual return you could have made on your initial expenditure had you invested it.

Not everyone who buys into DVC is making a wise decision and not everyone is well informed. For some people it does work out pretty well. You have to fit the profile.

Your 10% annual return seems a bit high. Remember that you have to pay taxes on dividends, interest and capital gains. Post-tax your 10% return would be more like 7.5%. Plus each year that initial investment has to be reduced by the amount of money saved by paying MFs vs the cash rate. It generally won't take more than 10 years to "break even" even using a 10% return on investment and a 30% discount on rack rates assuming you buy resale and don't finance. Then you can either sell the points and pocket the remaining cash or continue staying at deluxe DVC resorts for the next 40 years for just MFs which is a pretty steep savings.

The key to DVC being a good deal is actually wanting to go to WDW for the first 10 years and stay in that level of room.

 

[GoofGoof]

DVC is absolutely a luxury purchase, and is NOT an investment. It was never marketed to us as an investment that would pay any kind of dividends down the road. Did you have a DVC rep actually tell you that? Hmmm, have to disagree on paying the premium, though. We have taken 16 trips already as DVC owners. I have a spreadsheet that details exactly what we have paid into DVC, to include the maintenance fees. From that, for each of our trips, I check to see if there was a possible discount on a room where we were staying, and even if we couldn't get that rate, I used that rate in my spreadsheet. For some of our trips, I used a 30% discount on the room rate, a few others it was only 25%, and for some there were no discounts available (there aren't discounts for every room type all the time, you know). So far, we have saved over $12,000 on our resort costs! Not an insignificant amount, wouldn't you say?

Of course, I hope that your argument isn't going to be that I could have stayed Value or off-site and saved money. Please. We are deluxe snobs and will NEVER stay in a Value resort, or stay off-site. We have stayed at a few Moderates - POR, POFQ, FW cabins, and we liked those, but we paid cash for those before we became DVC members.

Is it for everybody? NO! If you are going to stay Value or off-site, if you are looking for a return on your money, if you aren't going to Disney at least every other year, if you haven't decided that you want to vacation at Disney for the next 30-40 years, then DVC is NOT for you. For us, everything fell into place, and we are happy to save money every trip. As an example, we just stayed in a 1 bedroom DVC villa at the Grand Floridian. It was 395 points for our 8 night stay. Since we only pay maintenance fees of $5.17 per point, our cost for this trip was approx. $2,042. In researching what it would have cost us to stay there with cash, it was just over $7,000, not including the resort and county taxes. Think about that. We stayed at the Grand Floridian for OVER $5,000 LESS than someone paying cash for the exact same room. Please tell me that isn't SIGNIFICANT savings. And we will get those kind of savings, and sometimes even better from other stays in the future.

I have a spreadsheet too. Actually several spreadsheets. I've also been tracking things like hotel room rates at CR for the past few years vs maintenance fees. Some day I'm gonna make some graphs up and post them here. Then I'll be as famous as @ParentsOf4

 

[freediverdude]

I just went through the tour yesterday and thinking about a small membership at Poly for a few nights a year in a studio. Still not sure though. Yesterday they were telling us that VGF is sold out- they're only selling Poly and Aulani to new members, don't know if that's news. I sort of fit the profile I guess. Been going to WDW consistently for the last 15 years, although not always in deluxe. Annual passholder almost continuously the whole time.

Looking at the numbers, it looks very "front loaded" on the costs, where you're almost paying the same as without DVC for those first 10 years or until it's paid off, then a steep discount after that. Like in my case I would be paying about $1800-1900 per year in cost plus dues for those first 10 years, for the points equivalent of 3 nights. So essentially I would be paying rack rate for those first 10 years. But then after that I would only be paying yearly dues and getting 3 nights. So basically it's a commitment to 20 years or longer more than anything else.

 

[GoofGoof]

I just went through the tour yesterday and thinking about a small membership at Poly for a few nights a year in a studio. Still not sure though. Yesterday they were telling us that VGF is sold out- they're only selling Poly and Aulani to new members, don't know if that's news. I sort of fit the profile I guess. Been going to WDW consistently for the last 15 years, although not always in deluxe. Annual passholder almost continuously the whole time.

Looking at the numbers, it looks very "front loaded" on the costs, where you're almost paying the same as without DVC for those first 10 years or until it's paid off, then a steep discount after that. Like in my case I would be paying about $1800-1900 per year in cost plus dues for those first 10 years, for the points equivalent of 3 nights. So essentially I would be paying rack rate for those first 10 years. But then after that I would only be paying yearly dues and getting 3 nights. So basically it's a commitment to 20 years or longer more than anything else.

If you finance the purchase it could probably take more than 20 years to break even. The interest rate is incredibly high.

VGF being sold out is new news to me. According to DVCNews, as of the end of March they had sold a little over 90% of the VGF points and only had about 165K left to sell so it's not surprising it's sold out. It only took about 2 years to sell out.

 

[pixargal]

I just went through the tour yesterday and thinking about a small membership at Poly for a few nights a year in a studio. Still not sure though. Yesterday they were telling us that VGF is sold out- they're only selling Poly and Aulani to new members, don't know if that's news. I sort of fit the profile I guess. Been going to WDW consistently for the last 15 years, although not always in deluxe. Annual passholder almost continuously the whole time.

Looking at the numbers, it looks very "front loaded" on the costs, where you're almost paying the same as without DVC for those first 10 years or until it's paid off, then a steep discount after that. Like in my case I would be paying about $1800-1900 per year in cost plus dues for those first 10 years, for the points equivalent of 3 nights. So essentially I would be paying rack rate for those first 10 years. But then after that I would only be paying yearly dues and getting 3 nights. So basically it's a commitment to 20 years or longer more than anything else.

Have you considered purchasing resale? The savings can be quite significant.

 

[LuvtheGoof]

I just went through the tour yesterday and thinking about a small membership at Poly for a few nights a year in a studio. Still not sure though. Yesterday they were telling us that VGF is sold out- they're only selling Poly and Aulani to new members, don't know if that's news. I sort of fit the profile I guess. Been going to WDW consistently for the last 15 years, although not always in deluxe. Annual passholder almost continuously the whole time.

Looking at the numbers, it looks very "front loaded" on the costs, where you're almost paying the same as without DVC for those first 10 years or until it's paid off, then a steep discount after that. Like in my case I would be paying about $1800-1900 per year in cost plus dues for those first 10 years, for the points equivalent of 3 nights. So essentially I would be paying rack rate for those first 10 years. But then after that I would only be paying yearly dues and getting 3 nights. So basically it's a commitment to 20 years or longer more than anything else.

That is what the people who think DVC is a bad idea don't realize. Yes, it is front loaded with the cost, but once you reach that breakeven point, the savings can be huge, even compared to a discounted rate. I think most of them simply aren't committed to a Disney vacation over the next 20-30 years, so don't see the value. Also, many of them save money by staying off-site or at a Value resort (ugh!), which is something we would never even consider doing. They are not candidates for DVC at all, and seem to enjoy trashing those of us that think long term, and can see the real value in it. They are only looking at the short term, and when I am getting almost a 70-80% discount long after Disney does away with discounts, they'll complain that they can't go because it costs too much!

 

[freediverdude]

That's what I am thinking, is they have been raising the price on the deluxe resorts pretty rapidly the past 5 years or so, and DVC would lock in the cost, basically for the rest of my life. This would guarantee that I would always be able to stay at a monorail resort, and not start feeling like I can only justify a value resort because of the pricing. Now that some of these resorts are starting to get up to $600/night a lot of the year, DVC is making a lot more sense, lol.

 

[GoofGoof]

That's what I am thinking, is they have been raising the price on the deluxe resorts pretty rapidly the past 5 years or so, and DVC would lock in the cost, basically for the rest of my life. This would guarantee that I would always be able to stay at a monorail resort, and not start feeling like I can only justify a value resort because of the pricing. Now that some of these resorts are starting to get up to $600/night a lot of the year, DVC is making a lot more sense, lol.

Maintenance fees do go up too, but the increase has been pretty much in line with deluxe resort rates so it's a wash.

How soon you break even is a matter of how much you pay for the points. Buying direct from Disney and financing the points will take a long time. Buying resale and paying cash helps reduce the time to break even a lot.

Here's some math on my situation:
I bought 160 BLT points resale 3.5 years ago for around $15K. If I decided to sell today I'd make over $17K after seller's commission. That works out to over a 3% annual return on my initial cash outlay. Not a terrible "investment" by itself. But that doesn't include the stays I've had while an owner.

In the time I've owned the points I have paid $3,800 in fees (including an estimate for next year's fees which I borrowed this year) and stayed the equivalent of 26 nights in a 1BR villa (I consider a week in a 2BR villa as 14 nights since it's really like having 2 full rooms). My pre-tax room rate works out to $130 a night. The actual rack rate for the nights I stayed was an average of $495 a night. That works out to a 74% discount vs rack. The rack rate for the cheapest room at CR is $365 a night so my discount to that is still 64% and I'm getting a villa with kitchen, living room, multiple bathrooms and a view instead of a garden wing studio room. To take it a step further, the rack rate for a moderate is $175 a night so what I'm paying is the equivalent of a 26% discount from rack at a moderate.

Now I admit I got really lucky and bought resale at a down time. Buying direct today you may never be able to recover your initial investment if you resell, but there is a good chance that you will eventually save money.

 

[LuvtheGoof]

Maybe part of the reason that Disney raised the prices so much was to keep out the Honey Boo Boo crowd.

 

[freediverdude]

I did it! I called the guide today and now I'm an owner at the Polynesian! I still can't believe it, never thought I could own something like that. Hasn't sunk in yet. And I promise I won't rent it out to Honey Boo Boo, lol.

 

[slappy magoo]

Like I said, nothing against DVC or its members. Just refreshing to hear that you went into it with eyes wide open. But I'm sure you realize that not every member is as savvy as you. Also, the one thing missing from your model is the 10% annual return you could have made on your initial expenditure had you invested it.

First of all, I'd question how many investments most people could make where an annual RoE is 10%. Don't get me wrong, it happens, but to be able to step into an investment knowing you'll get that much back, and get it consistently, "annually?" I'm not sure if that requires more luck, connections or savvy. Probably a combo of all 3.

Second of all, you could make that "why not invest it" argument to pretty much anything you buy, can't you. You're looking at a luxury car, why not get an economy car and invest the rest? Looking at an economy car, why not buy "gently used," if it includes a warranty, and invest the rest? Want a nice dinner out? Why not go to Denny's, invest the rest? Want to buy a Disney movie on blu-ray? Why not rent it on redbox, invest the rest? It'd all add up, right? Want to go to Disney World? Why not look at people's videos on youtube and invest your vacation funds? Only buy dented canned goods or food from Dollar General, only buy used clothes from Goodwill. There are people who do this and save tons of dough, but is that how you want to spend/save your money? Is that how you want to live your life? No judgment if you do, but it is the question everyone gets to ask - what do you want to do with your money? You've got things you need to buy, things you want to buy, investing some is really important as a factor to determine your retirement years but how much you need to deprive yourself now to prepare for then?