DVC Lifetime Costs - My Spreadsheet

OK, so other threads and my own interest motivated me enough to try to determine what final, "real world" costs might be, per year. For me, knowing the per year cost helps me know if I would have spent that much on hotels to begin with. So I made a quick spreadsheet to show a guestimate of average rates of increase in maintenance fees (based on disneyberry's excellent post in DISBoards.com) versus worst case scenario, based on what Disney contractually says it can charge (15% year-over-year increases).

Thus, the projected rates of increase for Saratoga Springs for 2005-2014 are based on an average of historical fee percentage changes across all DVC resorts, based on disneyberry's post. After that, it's pure guesstimate on my part, figuring that rates of increase will go up the older the physical facilities get and the more work likely to be needed to keep them up to Disney standards. It's hard to know whether my "guess" is too aggressive or not since OKW is really the only one we have to go on.

But the amount I'd need to spend per year to make DVC financially viable was higher than I expected (150 pts, $5100/year), dramatically so if you look at worst case (which I grant you I made look unrealistically bad). The total invested over the course of the agreement is, as some have pointed out, the equivalent of buying a house somewhere in Central Florida ($252k), whose equity would have grown by 2054.

Admittedly, I did not expect the per year cost to be so high so I tend to think my rates of increase after 2014 are too aggressive. Or maybe it's reality and I was being too eager to believe in DVC. I honestly don't know.

This wasn't intended to ignite a flame war so please take this FWIW, "for entertainment purposes only." If you see any factual errors or obvious omissions, please feel free to let me know since I really do want an accurate picture, if only for my own benefit.

I don't have auth to attach the actual .xls file so excuse the formatting.

Initial One-Time Costs
Points $$/Point Purchase
150 $95.00 $14,250.00
200 $95.00 $19,000.00

AVERAGE CASE: 150 points
Annual Dues Fees and Lifetime Costs

Year Fee Incr Fee/Point Points Annual Dues Cumulative Total Total Cost/Year
2005 0.00% $3.8300 150 $574.50 $14,824.50 $302.54
2006 2.15% $3.9123 150 $586.85 $15,411.35 $314.52
2007 1.33% $3.9643 150 $594.65 $16,006.00 $326.65
2008 2.86% $4.0776 150 $611.64 $16,617.64 $339.14
2009 2.63% $4.1850 150 $627.74 $17,245.38 $351.95
2010 1.47% $4.2463 150 $636.95 $17,882.34 $364.95
2011 8.08% $4.5895 150 $688.42 $18,570.75 $378.99
2012 3.80% $4.7638 150 $714.58 $19,285.33 $393.58
2013 3.53% $4.9318 150 $739.77 $20,025.10 $408.68
2014 3.20% $5.0896 150 $763.44 $20,788.54 $424.26
2015 8.00% $5.4968 150 $824.51 $21,613.05 $441.08
2016 4.75% $5.7579 150 $863.68 $22,476.73 $458.71
2017 5.00% $6.0457 150 $906.86 $23,383.59 $477.22
2018 5.25% $6.3632 150 $954.47 $24,338.06 $496.70
2019 5.50% $6.7131 150 $1,006.97 $25,345.03 $517.25
2020 8.50% $7.2837 150 $1,092.56 $26,437.59 $539.54
2021 5.00% $7.6479 150 $1,147.19 $27,584.78 $562.95
2022 5.50% $8.0686 150 $1,210.28 $28,795.07 $587.65
2023 6.00% $8.5527 150 $1,282.90 $30,077.97 $613.84
2024 6.50% $9.1086 150 $1,366.29 $31,444.26 $641.72
2025 9.00% $9.9284 150 $1,489.26 $32,933.51 $672.11
2026 6.00% $10.5241 150 $1,578.61 $34,512.12 $704.33
2027 6.50% $11.2081 150 $1,681.22 $36,193.34 $738.64
2028 7.00% $11.9927 150 $1,798.91 $37,992.25 $775.35
2029 7.50% $12.8922 150 $1,933.82 $39,926.08 $814.82
2030 10.25% $14.2136 150 $2,132.04 $42,058.12 $858.33
2031 7.25% $15.2441 150 $2,286.61 $44,344.73 $904.99
2032 7.75% $16.4255 150 $2,463.83 $46,808.56 $955.28
2033 8.25% $17.7806 150 $2,667.09 $49,475.65 $1,009.71
2034 8.75% $19.3364 150 $2,900.46 $52,376.12 $1,068.90
2035 12.00% $21.6568 150 $3,248.52 $55,624.63 $1,135.20
2036 8.50% $23.4976 150 $3,524.64 $59,149.28 $1,207.13
2037 9.25% $25.6712 150 $3,850.67 $62,999.95 $1,285.71
2038 10.00% $28.2383 150 $4,235.74 $67,235.69 $1,372.16
2039 11.75% $31.5563 150 $4,733.44 $71,969.13 $1,468.76
2040 15.00% $36.2897 150 $5,443.46 $77,412.59 $1,579.85
2041 8.50% $39.3743 150 $5,906.15 $83,318.74 $1,700.38
2042 9.00% $42.9180 150 $6,437.70 $89,756.44 $1,831.76
2043 9.50% $46.9952 150 $7,049.28 $96,805.72 $1,975.63
2044 10.00% $51.6948 150 $7,754.21 $104,559.94 $2,133.88
2045 15.00% $59.4490 150 $8,917.34 $113,477.28 $2,315.86
2046 9.00% $64.7994 150 $9,719.91 $123,197.19 $2,514.23
2047 9.50% $70.9553 150 $10,643.30 $133,840.48 $2,731.44
2048 10.00% $78.0508 150 $11,707.63 $145,548.11 $2,970.37
2049 10.50% $86.2462 150 $12,936.93 $158,485.04 $3,234.39
2050 15.00% $99.1831 150 $14,877.47 $173,362.50 $3,538.01
2051 11.00% $110.0933 150 $16,513.99 $189,876.49 $3,875.03
2052 11.50% $122.7540 150 $18,413.10 $208,289.59 $4,250.81
2053 12.00% $137.4845 150 $20,622.67 $228,912.26 $4,671.68
2054 15.00% $158.1071 150 $23,716.07 $252,628.32 $5,155.68

Wow that's a crazy thing to imagine - that you could buy a nice house in Florida for the same cost of a time share. I guess the difference would be a house would require property taxes, electric bills, water bills, maintences, mowing the lawn, etc. But it's still interesting.

The only thing I can't possibly believe is accurate is the inflation. I just can't imagine that 50 years from now the annual dues for 150 points would be over $23,000 per year. That's just outrageous. So that increase might be a little much. I actually didn't even know that the annual dues were increased every year. I thought I had researched the heck out of it but I never came across that factoid. Maybe I don't want to buy into this afterall.

Laura22 said:

Wow that's a crazy thing to imagine - that you could buy a nice house in Florida for the same cost of a time share. I guess the difference would be a house would require property taxes, electric bills, water bills, maintences, mowing the lawn, etc. But it's still interesting.

The only thing I can't possibly believe is accurate is the inflation. I just can't imagine that 50 years from now the annual dues for 150 points would be over $23,000 per year. That's just outrageous. So that increase might be a little much. I actually didn't even know that the annual dues were increased every year. I thought I had researched the heck out of it but I never came across that factoid. Maybe I don't want to buy into this afterall.

Click to expand...

Yeah, I agree about the $23k/year. Seems way too high. But then again, how much did things cost 50 years ago? I picked up a magazine from the 70's the other day and was amazed at how much I could buy a car for!

Again, FWIW, I added a link to my profile for downloading the actual Excel spreadsheet. As I said, if someone has a logic and rationale behind what they think are more realistic numbers, I'm interested.

Laura22 said:

I just can't imagine that 50 years from now the annual dues for 150 points would be over $23,000 per year. That's just outrageous. So that increase might be a little much. I actually didn't even know that the annual dues were increased every year. I thought I had researched the heck out of it but I never came across that factoid. Maybe I don't want to buy into this afterall.

Click to expand...

Everything is relative. If you apply the same inflation amounts to a $200/night deluxe resort standard room, one night at said room will cost you $8256 a night in 2054. Assuming 150 points gets you about 2 weeks in a studio room at a DVC resort, the same amount of time in a deluxe resort would cost you $115,597 if you booked it normally... so you still save $91,000.

Yeah this might be a little off - Annual dues for 200 points in 2054 - $721,000 per year. :lol:

There must be a more accurate way to figure out the inflation. It's a great spreadsheet so far.

It is not really that hard to believe since the base price of a room at the Contemporary Resort has gone up nearly 700% since 1977 when the room rate was $50.00 or less.

Since I really don't know much about the DVC and don't feel like researching it right now. 150 point will get you how many nights on average?

Interesting spreadsheet. One other thing you may want to take into account is that the initial buy-in ($14,250) may be financed. If it is, you would want to add the interest charges to the costs.

Good points about the rate increase being relative to the same/similar rate increase in per night hotel costs. Heheh, I really hadn't considered that rather obvious argument. I just looked at the average cost/year to cover the lifetime expenses and kinda freaked. But that's a good point.

As far as financing, right, I didn't factor that in and it's a valid point. I didn't put it in because if I were to buy in, I would probably put the minimum down (on Disney Visa of course!), use Disney's 6-months 0% financing, then pay it all off at the end of 6 months, not financing anything. That's why I didn't factor in that cost.

Incidentally, I updated the spreadsheet to include a "Best Case" scenario. But I think it's as invalid as the "Worst Case" since disneyberry's post clearly indicates that rate increases do fluctuate from year to year and generally jump every 5 years. While I can accept my attempt at trend analysis may be inaccurate, there's no way we'll get off with a simple flat % increase every year, either!

Is anything worth the price?

I always appreciate the attempt to come up with a rational explanation for joining (or not joining) Disney Vacation Club.

Since I sell new homes for a living I have long ago decided that deciding to buy or not buy something is seldom a rational decision. My experiance is that people often attempt to use logic to rationalize what is actually an emotional decision. I only wish it were so easy.

Having over a dozen model homes and hundreds of floor plans to choose from prospective customers frequently ask me how they should decide. My long standing joke is: If it were a simple issue of the most square footage for the least amount of money we would display one model and I could just sit and take orders for it all day long. Of course then a salesperson would not be necessary so I'd be out looking for a job.

Without knowing anything about DVC I can guess with a fair amount of certainty that there must be some degree of value in the program. That somehow it must represent value to those who join. Without complex formulas I can estimate the cost is about $16,000 and the yearly ongoing cost is going to be $500 to $800 for the forseeable future. The cost to walk in the front door of the resort and pay for a stay in the resort comparable to the stay I'd get as a member is probably going to be in the $2,000 to $3,000 range. Let's not forget the 14% resort tax I don't have to pay.

So with a fair amount of certainty I know that my initial cost will buy me a discounted stay at least. So probably in 10 years or so I'll break even. I'm not even going into the increasing dues. If the dues go up and cost more than the price of paying cash for a room I'll stop paying the dues and they can have their club membership back. If the cost of maintanace goes up I would assume the cost to pay cash at the resort wold likely go up too and therefore preserve to some degree my value.

If value was the only motivator we would all drive Ford Escorts and Live in very small house (or maybe an apartment). If I had to rationalize my 4 bedroom home, hi definition TV and my SUV I'd probably have more money, but I wouldn't be as happy. I guess I'd be staying at the Super 8 motel near Disney too.

As it turns out: I am a DVC member and like any customer I have sold a home to - I have long forgot the dollars and cents of it all and I simply enjoy what I have gotten for my money.

Good luck with your decision.

Joe

CSUFSteve said:

OK, so other threads and my own interest motivated me enough to try to determine what final, "real world" costs might be, per year. For me, knowing the per year cost helps me know if I would have spent that much on hotels to begin with. So I made a quick spreadsheet to show a guestimate of average rates of increase in maintenance fees (based on disneyberry's excellent post in DISBoards.com) versus worst case scenario, based on what Disney contractually says it can charge (15% year-over-year increases).

ect...

Click to expand...

Steve,

I don't thnk I am following your logic. We have been DVC members since 1999. When you say Annual Dues are you talking about the maintenace fees or are you taking about the payments on purchasing the DVC ownership?

CSUFSteve said:

OK, so other threads and my own interest motivated me enough to try to determine what final, "real world" costs might be, per year. For me, knowing the per year cost helps me know if I would have spent that much on hotels to begin with. So I made a quick spreadsheet to show a guestimate of average rates of increase in maintenance fees (based on disneyberry's excellent post in DISBoards.com) versus worst case scenario, based on what Disney contractually says it can charge (15% year-over-year increases).

Thus, the projected rates of increase for Saratoga Springs for 2005-2014 are based on an average of historical fee percentage changes across all DVC resorts, based on disneyberry's post. After that, it's pure guesstimate on my part, figuring that rates of increase will go up the older the physical facilities get and the more work likely to be needed to keep them up to Disney standards. It's hard to know whether my "guess" is too aggressive or not since OKW is really the only one we have to go on.

Click to expand...

Two things. First, I'd expect increases to match the occurances of real world costs, not an ever increasing %. If you have ever looked at the association costs of puds where the complete outside of townhomes are covered(including new roofs, fences, doors, pools, roads, etc), you will see it usually takes about 20 years before association costs double, with the increases being fairly consistant, much like what has currently occured with DVC.

Second, you should also consider what has happened to the resale cost of OKW. After 10 years you were able to sell your membership and made a profit, thus worst case scenario you went to WDW for the cost of your dues, or 10 years of trips for $6600 of dues.

Well, I think that most of us have known for many years that the DVC makes no financial sense. The DVC fans seem to regal in their membership tales, yet the bottom line is that it has always been less expensive to buy a house near WDW property and pay a property management firm to rent it out. The owner of the property can then pick and choose their dates to visit WDW. The DVC "owner" pays a higher price with less availability and then ends up with nothing when the contract expires. DVC owners just get sucked into all that Disney stuff and lose their financial focus! The house buyer ends up with a high equity product for half the price. Disney dribble DVC fans drive up the prices! Go for it!

Heck, you can rent DVC points for less than the DVC owners pay!

Woody13 said:

Well, I think that most of us have known for many years that the DVC makes no financial sense. The DVC fans seem to regal in their membership tales, yet the bottom line is that it has always been less expensive to buy a house near WDW property and pay a property management firm to rent it out. The owner of the property can then pick and choose their dates to visit WDW. The DVC "owner" pays a higher price with less availability and then ends up with nothing when the contract expires. DVC owners just get sucked into all that Disney stuff and lose their financial focus! The house buyer ends up with a high equity product for half the price. Disney dribble DVC fans drive up the prices! Go for it!

Heck, you can rent DVC points for less than the DVC owners pay!

Click to expand...

First, comparing an offsite house to an on property 1 or 2 bedroom is comparing apples to oranges. Obviously its cheaper to stay offsite, just look at moderate/deluxe costing compared to offsite hotels. If you don't want to stay on property than you shouldn't even consider DVC. The on property/off property debate is for another board.

Now lets look at the cost of owning compared to renting. Renting is pretty standard, approx. $10 per point. So 150 points costs you $1500 per year, or $9000 over a 6 year period.

Buying 150 points gives you 7500 points over 50 years at a cost of $14250 plus yearly dues. That breaks down to $1.9 plus yearly dues. For the first 6 years of yearly dues that will ave. to $4.00 per point. Over a 6 year period that costs you $5310 total, or a savings of $3690 over renting.

socalkdg said:

First, comparing an offsite house to an on property 1 or 2 bedroom is comparing apples to oranges. Obviously its cheaper to stay offsite, just look at moderate/deluxe costing compared to offsite hotels. If you don't want to stay on property than you shouldn't even consider DVC. The on property/off property debate is for another board.

Now lets look at the cost of owning compared to renting. Renting is pretty standard, approx. $10 per point. So 150 points costs you $1500 per year, or $9000 over a 6 year period.

Buying 150 points gives you 7500 points over 50 years at a cost of $14250 plus yearly dues. That breaks down to $1.9 plus yearly dues. For the first 6 years of yearly dues that will ave. to $4.00 per point. Over a 6 year period that costs you $5310 total, or a savings of $3690 over renting.

Click to expand...

I thought you didn't want to compare apples and oranges? When you buy DVC, you own nothing! You don't build equity in the property. You have nothing when it's done, nada. Sorry, but it's a very expensive prepaid rental plan and you are locked into that plan. You didn't even consider the ubiquitous Disney rental discounts in your theory.

I can rent or not as I desire and I can do that for far less money than your proposal. DVC supporters always make the spreadsheets out to support their cause rather than the real world. I can bargain for a price (and I do that on every visit) but you can't do that in the DVC. That's the bottom line.

If I may chime in...

Yes, it's an expensive rental plan. But you're also locking in your future vacations at today's rates. Prices for rooms will go up. The number of points per room per year cannot increase. Yes, the yearly maintenance fees will go up (but they won't increase as much as the initial spreadsheet shows ), but as a non-betting person, I'm betting they won't go up as much.

HauntedPirate said:

If I may chime in...

Yes, it's an expensive rental plan. But you're also locking in your future vacations at today's rates. Prices for rooms will go up. The number of points per room per year cannot increase. Yes, the yearly maintenance fees will go up (but they won't increase as much as the initial spreadsheet shows ), but as a non-betting person, I'm betting they won't go up as much.

Click to expand...

I've been going to WDW before the DVC was invented. I had my checkbook in hand when the DVC was first offered. After I looked at the contract and had a real estate attorney look at the contract as well, I put my checkbook back in my pocket. The DVC is not a money saver by any stretch of the imagination. It never has been and it never will be!

The first DVC property offered was OKW back in 1991. If you bought that property back then, you would have no better rates than what anyone can buy on a resale of OKW! Locked in? The resale values of OKW have not even kept pace with normal inflation rates during the last 14 years. It ain't exactly a hot item. Sorry, but the DVC is not a good way to save money on WDW accommodations.

Woody13 said:

When you buy DVC, you own nothing! You don't build equity in the property. You have nothing when it's done, nada. Sorry, but it's a very expensive prepaid rental plan and you are locked into that plan.

Click to expand...

Not to mention you have NOTHING in 2030 or 2042 or whatever, at the end of your deal w/ DVC. Thats why my family went with Bonnet Creek (Fairfield). Much better deal... and you are not booted later this century, like you are on the DVC. :wave:

I quote Willy Wonka from the original film:
"You get NOTHING.. You lose!! GOOD DAY, SIR!"

:wave:

When we were considering DVC, we found the maint. fees were running approx. $800.00 per year. We can rent offsite a 3 bedroom, fully furnished home with pool for that amount of money. So, it just didn't add up for us to go with DVC. I think it's safe to say, there are agreements and disagreements on both sides of the DVC issue.

Woody13 said:

I've been going to WDW before the DVC was invented. I had my checkbook in hand when the DVC was first offered. After I looked at the contract and had a real estate attorney look at the contract as well, I put my checkbook back in my pocket. The DVC is not a money saver by any stretch of the imagination. It never has been and it never will be!

The first DVC property offered was OKW back in 1991. If you bought that property back then, you would have no better rates than what anyone can buy on a resale of OKW! Locked in? The resale values of OKW have not even kept pace with normal inflation rates during the last 14 years. It ain't exactly a hot item. Sorry, but the DVC is not a good way to save money on WDW accommodations.

Click to expand...

You really should learn to tell the whole truth.

$48 per point was the initial offer for OKW. It now costs $78 per point in resale, a 63% increase. Inflation has averaged 2.4% per year during the last 14 years for a 43% increase over 14 years.

So basically OKW owners have been able to reserve rooms for the last 14 years at an ave. cost of $3.5 per point(just the maint fee). They could now sell and have made 63% on their purchase. So they have been staying in a studio, onsite at multiple hotels, for about $45 per night. I guess the next thing we will hear is that you can get Deluxe rooms for $70 a night at BC, BW, OKW, etc.

DVC is a great way to go if you like staying onsite, as well as enjoy the high standards of deluxes, or want a 1 or 2 bedroom onsite instead of two rooms for your larger family/group.

MouseearsDeb said:

When we were considering DVC, we found the maint. fees were running approx. $800.00 per year. We can rent offsite a 3 bedroom, fully furnished home with pool for that amount of money. So, it just didn't add up for us to go with DVC. I think it's safe to say, there are agreements and disagreements on both sides of the DVC issue.

Click to expand...

You are correct that if you want to stay offsite then you can get a better deal than DVC. DVC is only for people that would normally stay in Moderates/Deluxes onsite.