Came THIS close to buying DVC

[greebomusic]

 

[pixargal]

CaptainKidd, I too, have been following your posts about whether or not to buy into DVC. My husband and I have been debating this over the past five years as well. So, I enjoyed reading your number crunching and the outcome it provided. It seems to be a battle between your heart and your brain, so I don't know if it will ever be over for you. But I will continue to follow your quest. We ended up taking the plunge and are in the process of ROFR. There is no price on the emotional fulfillment we have knowing that we may own a little piece of the magic soon. Good luck with whatever you decide because it is your decision!

 

[disneyeater]

Banking doesn't solve the problem, just defers it. If you have 10 points left.. 10 points isn't going to be usable as a stand-alone reservation this year or next. You can't combine points from multiple rentals... and they put the kabosh on how many transfers you can do with serious limitations.

Watching the back and forth here but I just wanted to see if you would clarify this for me. If you have an issue where you have 10 points left this year, you can continue to bank those points with the 7 next year, the 22 the year after that....... until you have enough for another reservation. I don't see how this is a problem at all.

 

[Tiggerrules]

I think the numbers can be used to justify either position. The biggest thing is it is personal decision that needs to be made for each individuals own finances and desires for a vacation. Everyone is going to be different. For us it made sense, we go to wdw at least twice a year. We always used our AP discount, but after looking at what we spent over the last five years and what we would have paid with Dvc it helped make that decision. We are currently in Rofr for 300 pts at okw. My wife and I went over this too many times to count. But we finally decided it works for us. We looked at buying direct, but choose resale. We have no desire for a cruise and really don't want to use our points for other locals. Sorry for being so long on the post.

 

[flynnibus]

Watching the back and forth here but I just wanted to see if you would clarify this for me. If you have an issue where you have 10 points left this year, you can continue to bank those points with the 7 next year, the 22 the year after that....... until you have enough for another reservation. I don't see how this is a problem at all.

Because your assumption is wrong.

Points can only be banked for one year. So you can't keep picking up all the pieces until you get enough to make a reservation. You have to use it in the following year.. or try to rent them. But to rent them, they need to be enough points to actually make a reservation that works. You can't glue points from different accounts together to make one reservation. You can make reservations back to back, but you can't combine.

Take some ficticious numbers to illustrate the point. Let's say I have 200 points.

• In year one I book a trip that costs me 189 points - leaving me 11 points to bank into year two
• In year two, I want to bank my points so that in year three I can take a bigger vacation
• But I can't push those 11 points forward into year three. So I either need to let them expire, or I need to take enough of my year two 200 points and use them in year 2 to make a minimum sized reservation that I use myself or rent out.

Net effect.. in Year 2 I either need to lose points, or be forced give up points I planned on banking into year 3 so those 11 points can be made into something that can be usable by someone in year 2. I can't carry all 200 points from year 2 into year 3 without giving something up because of the quantization of how points are available vs how you buy points.

 

[trs518]

Watching the back and forth here but I just wanted to see if you would clarify this for me. If you have an issue where you have 10 points left this year, you can continue to bank those points with the 7 next year, the 22 the year after that....... until you have enough for another reservation. I don't see how this is a problem at all.

You can use your 2012 points in 2011 or 2013. You cannot keep banking them, until say 2017, and use them at a later date.

Unused points = future demand for rooms. Disney cannot let this build up to a level where demand overtakes available rooms.

 

[flynnibus]

You don't think it has anything to do with the fact that the most recent property to be built at WDW (BLT) is on the monorail? Kidani is new and is much more in line with the other properties. Aulani is expensive, yes, but I can't really compare it to anything else. The GF DVC will be crazy expensive, too... I wouldn't be surprised if it's on par with the Grand Californian at Disneyland. That could easily be explained by location as much as anything. If they build that rumored DVC by Wilderness Lodge and Fort Wilderness and it's just as expensive as BLT without the amenities or location, then I'll say you're right.

Just looking at the trend.. I'm willing to wager on it They keep building higher and higher end units.. not more economical ones.

I'm curious about something for the members. From what I saw in the past, Disney is subsidizing the properties' expenses today. Is there anything in the agreement about Disney continuing to subsidize those amounts or percentages?

 

[flynnibus]

Did some number crunching, and yup same price, better accommodations.
I do not have all the pricing with me, but I calculated the cost of purchase, divided buy 50 ( 50 years ). Added the dues for the year, and multiplied by three ( once every 3 years - bank and borrow ). Gave me the same price, I was paying now ( in january ). I know, I know.. dues increase 3% to 5% every year, but I figured so will the room rates, so zero sum difference.
Just as an added note, I will be losing points on some years, since I bought enough points for what I wanted to do plus 1 point, ( which in my case is 3 points per vacation of extra ) to account for the moving around of points, and those lost points are calculated into my costs. and still even price. the only thing I lose out on, is the housekeeping, but I have a wife ( it's a joke, It's a joke :lol. But I figured bigger room, kitchen ect... 2 full washrooms, no housekeeping, it's a wash.

Great post and thanks for sharing your particular decision logic.

 

[slappy magoo]

It worked out that with 300 points, my dues the first year would be close to around $2,000. I was told dues increase at an average of about 3% per year. This means, by the final year of owning, dues would be over $7,000 per year. The purchase price of $30,000, I was fine with. I figured I could pay it off in 2 years. What I wasn't fine with was with a 3% increase in dues (and now I'm reading it can be MUCH more than that), total cost of ownership now goes to over $215,000. I could buy an incredible house in Florida for that much. Now I'm reading some dues went up 8% last year!!!!

Certainly not going to try to sway your opinion, but I do think it important to point out you're being as selective with why DVC isn't cost-efficient for you as DVC owners can be selectively with why membership is SUCH a value.

Sure, you can buy a house in Florida for 215K. I don't know if it would be an "incredible house," but with the real estate market being what it is, it's more possible now than, say, a few years ago. But with that purchase, you'll be paying for property taxes. You'll be paying for anything in your house that needs doing. If your house is part of a planned community, a condo or an attached house or a townhouse, you'll be paying maintenance fees there as well. Where I live, my property taxes are near 8K a year, and my townhouse fees are 1800 a year, and I'm still responsible for any damage that occurs to my unit.

With my Saratoga Springs points, my maintenance fees cover all of that. Yes, that fee will go up, just as my own home's property taxes and townhouse maintenance fees will go up.

To compare buying DVC points to buying a home, without factoring in all the costs associated with owning a home to the maintenance fees of DVC, is misleading.

 

[slappy magoo]

Because your assumption is wrong.

Points can only be banked for one year. So you can't keep picking up all the pieces until you get enough to make a reservation. You have to use it in the following year.. or try to rent them. But to rent them, they need to be enough points to actually make a reservation that works.

Or you can find a DVC member on a message board that needs to rent a small amount of points to have the length or style of vacation they want to take...OR you decide to rent a few points from someone else (or rent them direct from Disney - DVC members are allowed to rent up to 25 one-time-use points from Disney), and add an extra night to your vacation. Either way, there are ways for those small, seemingly-negligible amounts of extra points to be used without them just elapsing.

 

[Phonedave]

Because your assumption is wrong.

Points can only be banked for one year. So you can't keep picking up all the pieces until you get enough to make a reservation. You have to use it in the following year.. or try to rent them. But to rent them, they need to be enough points to actually make a reservation that works. You can't glue points from different accounts together to make one reservation. You can make reservations back to back, but you can't combine.

Take some ficticious numbers to illustrate the point. Let's say I have 200 points.

• In year one I book a trip that costs me 189 points - leaving me 11 points to bank into year two
• In year two, I want to bank my points so that in year three I can take a bigger vacation
• But I can't push those 11 points forward into year three. So I either need to let them expire, or I need to take enough of my year two 200 points and use them in year 2 to make a minimum sized reservation that I use myself or rent out.

Net effect.. in Year 2 I either need to lose points, or be forced give up points I planned on banking into year 3 so those 11 points can be made into something that can be usable by someone in year 2. I can't carry all 200 points from year 2 into year 3 without giving something up because of the quantization of how points are available vs how you buy points.

Not quite.


Lets say I have 100 points and I use 95 a year, starting in 2010

2010: Use 95 points from 2010, bank 5 to 2011
2011: Use 5 banked from 2010, 90 from 2011 and bank the 10 remaining 2011
2012: Use 10 banked from 2011, 85 from 2012, and bank the 15 remaing 2012
2013: Use 15 banked from 2012, 80 from 2013, and bank the 20 remaining 2013

You can keep doing this until you get to the point where you are not using all of the points you have banked the previous year. At that point you will have to book a trip for more than 95 points. You will in fact have up to 195 points to use (100 banked from the previous year + the current year)

-dave

 

[slappy magoo]

Just looking at the trend.. I'm willing to wager on it They keep building higher and higher end units.. not more economical ones.

I'm curious about something for the members. From what I saw in the past, Disney is subsidizing the properties' expenses today. Is there anything in the agreement about Disney continuing to subsidize those amounts or percentages?

1: There have been rumors (admittedly, just rumors) about DVC considering producing some more economical accommodations, in nw or existing resorts with fewer amenities or smaller rooms. I, for one, wouldn't be surprised to find out a wing of the new Art of Animation suite becomes a DVC wing.

2: I'd be interested in links to your reports about Disney subsidizing DVD property expenses. Ironically, most people who aren't in DVC tend to claim the opposite - that DVC is profiting from the maintenance fees and using those profits to cover their own property taxes (which is illegal, but a company the size of Disney would probably know how to hide it from most DVC members if they had a mind to. Doesn't mean they are, or that there's proof that they are). It's one thing for Disney to offer incentives to get people to join if they think they'll profit in the long run. It's another, sillier thing entirely to suggest they're purposefully losing money by eating certain costs that should be covered under maintenance fees in order to get more people to buy in, only to suddenly yank those subsidies away. DVC has been around long enough that were they to have such a scheme, they would've "yanked" by now. What you're probably suggesting is the notion of a "sweetheart deal," where, through pre-arranged deals tiwxt Disney and DVC (as if they're two wholly separate entities instead of part of the same conglomeration), Disney supplies the DVC resorts or DVC wings of Disney resorts all the housekeeping and greenskeeping and stores and eateries in exchange for the use of Disney's lad and for a fee that would prevent DVC (in theory) from shopping out those services elsewhere. Again, ironic, because some DVC members wonder if their fees would be reduced if they COULD shop those services out.

 

[disneyeater]

Because your assumption is wrong.

Points can only be banked for one year. So you can't keep picking up all the pieces until you get enough to make a reservation. You have to use it in the following year.. or try to rent them. But to rent them, they need to be enough points to actually make a reservation that works. You can't glue points from different accounts together to make one reservation. You can make reservations back to back, but you can't combine.

Take some ficticious numbers to illustrate the point. Let's say I have 200 points.

• In year one I book a trip that costs me 189 points - leaving me 11 points to bank into year two
• In year two, I want to bank my points so that in year three I can take a bigger vacation
• But I can't push those 11 points forward into year three. So I either need to let them expire, or I need to take enough of my year two 200 points and use them in year 2 to make a minimum sized reservation that I use myself or rent out.

Net effect.. in Year 2 I either need to lose points, or be forced give up points I planned on banking into year 3 so those 11 points can be made into something that can be usable by someone in year 2. I can't carry all 200 points from year 2 into year 3 without giving something up because of the quantization of how points are available vs how you buy points.

I am not making an assumption of any kind. I am stating fact that by using the banked points in the next year's reservation first, you can continue to build the amount of points you are banking. What you are saying is only the case if you plan to use no points in the following year.

Not quite.


Lets say I have 100 points and I use 95 a year, starting in 2010

2010: Use 95 points from 2010, bank 5 to 2011
2011: Use 5 banked from 2010, 90 from 2011 and bank the 10 remaining 2011
2012: Use 10 banked from 2011, 85 from 2012, and bank the 15 remaing 2012
2013: Use 15 banked from 2012, 80 from 2013, and bank the 20 remaining 2013

You can keep doing this until you get to the point where you are not using all of the points you have banked the previous year. At that point you will have to book a trip for more than 95 points. You will in fact have up to 195 points to use (100 banked from the previous year + the current year)

-dave

Exactly.

 

[Pioneer Hall]

1: There have been rumors (admittedly, just rumors) about DVC considering producing some more economical accommodations, in nw or existing resorts with fewer amenities or smaller rooms. I, for one, wouldn't be surprised to find out a wing of the new Art of Animation suite becomes a DVC wing.

2: I'd be interested in links to your reports about Disney subsidizing DVD property expenses. Ironically, most people who aren't in DVC tend to claim the opposite - that DVC is profiting from the maintenance fees and using those profits to cover their own property taxes (which is illegal, but a company the size of Disney would probably know how to hide it from most DVC members if they had a mind to. Doesn't mean they are, or that there's proof that they are). It's one thing for Disney to offer incentives to get people to join if they think they'll profit in the long run. It's another, sillier thing entirely to suggest they're purposefully losing money by eating certain costs that should be covered under maintenance fees in order to get more people to buy in, only to suddenly yank those subsidies away. DVC has been around long enough that were they to have such a scheme, they would've "yanked" by now. What you're probably suggesting is the notion of a "sweetheart deal," where, through pre-arranged deals tiwxt Disney and DVC (as if they're two wholly separate entities instead of part of the same conglomeration), Disney supplies the DVC resorts or DVC wings of Disney resorts all the housekeeping and greenskeeping and stores and eateries in exchange for the use of Disney's lad and for a fee that would prevent DVC (in theory) from shopping out those services elsewhere. Again, ironic, because some DVC members wonder if their fees would be reduced if they COULD shop those services out.

The subsidized dues come from Vero and Aulani because they had major changes to their dues structures after people had already purchased. Vero was originally going to be a larger resort, which means that dues would have been less for each member. When they saw that the demand wasn't what they expected it to be, they decided to not build it's last phase. We all know the current situation with Aulani as well and how those dues were changed after they saw their bad math. In both of these situations, members who purchased their contracts before these dues were increased were allowed to continue paying less for the life of their contract. Disney will subsidize the dues in these situations until those contracts expire. In addition, should a member sell one of these subsidized contracts the dues remain lower for the new owner.

 

[slappy magoo]

The subsidized dues come from Vero and Aulani because they had major changes to their dues structures after people had already purchased. Vero was originally going to be a larger resort, which means that dues would have been less for each member. When they saw that the demand wasn't what they expected it to be, they decided to not build it's last phase. We all know the current situation with Aulani as well and how those dues were changed after they saw their bad math. In both of these situations, members who purchased their contracts before these dues were increased were allowed to continue paying less for the life of their contract. Disney will subsidize the dues in these situations until those contracts expire. In addition, should a member sell one of these subsidized contracts the dues remain lower for the new owner.

While those 2 examples make sense in the grander scheme (and when it comes to Aulani, I would think legally they'd have to subsidize for the lives of those contract or else be held legally liable for misrepresenting their product to people who then purchased based on that inaccurate info), I personally was only thinking of DVC properties onsite at WDW. My mistake.

 

[Pioneer Hall]

While those 2 examples make sense in the grander scheme (and when it comes to Aulani, I would think legally they'd have to subsidize for the lives of those contract or else be held legally liable for misrepresenting their product to people who then purchased based on that inaccurate info), I personally was only thinking of DVC properties onsite at WDW. My mistake.

It's the same situation with Vero. They told people they were going to do one thing and people bought with that assumption. When they changed their mind they had no choice but to cover that extra expense.

 

[flynnibus]

Or you can find a DVC member on a message board that needs to rent a small amount of points to have the length or style of vacation they want to take...OR you decide to rent a few points from someone else (or rent them direct from Disney - DVC members are allowed to rent up to 25 one-time-use points from Disney), and add an extra night to your vacation. Either way, there are ways for those small, seemingly-negligible amounts of extra points to be used without them just elapsing.

You missed the second line where I said I want to skip a trip in year 2 to make a bigger trip in year 3. The argument is always 'you dont have to travel every year...'.

And when you rent, I think I missed a point about combining rental points. I thought you could not combine points from many sources into a single reservation. But maybe it's possible to do so after the 7m window? Can you confirm that for me?

THx

 

[slappy magoo]

It's the same situation with Vero. They told people they were going to do one thing and people bought with that assumption. When they changed their mind they had no choice but to cover that extra expense.

Which means, to kinda answer Flynnibus' question, I'd think Disney is probably, legally required to keep subsidizing at least the percentage or portion of the maintenance fees that were screwed up as a result of their bad math. If the current difference between the money from Aulani's maintenance fees that go to property taxes and what that fee should have been is, say, 20%, Disney will always have to figure out what that 20% difference is each time fees go up, and then cover it, or else they can be sued for breach of contract.

 

[flynnibus]

Not quite.


Lets say I have 100 points and I use 95 a year, starting in 2010

2010: Use 95 points from 2010, bank 5 to 2011
2011: Use 5 banked from 2010, 90 from 2011 and bank the 10 remaining 2011
2012: Use 10 banked from 2011, 85 from 2012, and bank the 15 remaing 2012
2013: Use 15 banked from 2012, 80 from 2013, and bank the 20 remaining 2013

You can keep doing this until you get to the point where you are not using all of the points you have banked the previous year. At that point you will have to book a trip for more than 95 points. You will in fact have up to 195 points to use (100 banked from the previous year + the current year)

-dave

Except you skipped the point about not traveling in year 2. Your example simply boils down to 'you use the banked points before new points each year'. That's obvious. You keep rolling your excess forward. But for that to work, you must 'consume' points every year in either renting or reservations.

 

[dreamfinder]

I'm always concerned with Disney being able to change the rules. For example resale purchase are no longer eligible to use points toward reservations in the Disney Collection, Concierge Collection or Adventurer Collection. Included in these collections are Disney Cruise Line bookings.

And apparently these were not actually guaranteed in the contracts signed by the buyers. Something about how it wasn't in the contract of ownership, but rather your membership in DVC itself that granted you that right. They had a legal out in this case, but cannot legally make any change they want as it validates the contract. And in my opinion, those are usually pretty rough ways to use your points. Pretty much ends up costing the same or more than if you paid cash.