Price

[21stamps]

I have to agree that $420 is impossible. The payment on $28,500 at 4% for 5 years is $524.87.

Edit to add: to get to a payment of only $420, the loan would have to have been only $22,800.

I've been in sales and finance my entire adult life, the greater part of that in the timeshare business. I don't, and have never owned a timeshare.lol Not because I think it's a horrible product, it isn't. It just doesn't fit the way I travel. In all those years though people would try to get to payments that are unrealistic, I had to use a 0% example to show them that math is math, can't change a calculator, only amount financed.

If I was to ever purchase one, and what I recommend to friends who have.. Always pay cash. If not, do a home equity loan. looking at the overall out of pocket of a financed timeshare, thru a finance company, is staggering. 9 times out of 10 the price isn't worth it at that point, and it isn't at all cost effective for what you're getting. Millions of people do it though, I wouldn't have had a career if not.

With time share people are buying a dream, and if a monthly payment fits their budget, and it makes them happy, then go for it.

 

[TXDisney]

Well my outlook is kinda changing on a DVC.
I'm not a millionaire but make a good living, but paying 30k cash isn't doable, so financing would need to be done. We're not interested in some cheaper option villas bc at that point we don't see it worry the investment. If my math is correct bc of interest, loan amount and maintenance fees... my monthly payment for 5yrs is atleast $700, meaning I'm paying $42,000 in 5yrs. Add that I still have to pay the $1,300 a year for maintenance fees. With that rate increasing each year after 10 additional years so 15 years down the road, I will have paid close to $70,000 for this DVC over 15 years. If I do a week at BC the next 20 years (so 5 additional year) at $500/night (rooms are at like $465/night so adding slight increase). Thus when it equals out to just the DVC and 15 years of maintenenace fees. I know there's additional perks to a DVC besides that, just doesn't seem now as smart of an investment. When I thought the payments would be less that's a difference of nearly 10k over the loan, which I see as 3 regular stays at BC. I see it as I have to go more than 20 times for it to equate to a decent investment, which I think we will go to WDW every year, but I don't see the savings in the purchase now, plus I have the option as a non DVC member to try different resorts each year.

 

[dreamfinder]

Well my outlook is kinda changing on a DVC.
I'm not a millionaire but make a good living, but paying 30k cash isn't doable, so financing would need to be done. We're not interested in some cheaper option villas bc at that point we don't see it worry the investment. If my math is correct bc of interest, loan amount and maintenance fees... my monthly payment for 5yrs is atleast $700, meaning I'm paying $42,000 in 5yrs. Add that I still have to pay the $1,300 a year for maintenance fees. With that rate increasing each year after 10 additional years so 15 years down the road, I will have paid close to $70,000 for this DVC over 15 years. If I do a week at BC the next 20 years (so 5 additional year) at $500/night (rooms are at like $465/night so adding slight increase). Thus when it equals out to just the DVC and 15 years of maintenenace fees. I know there's additional perks to a DVC besides that, just doesn't seem now as smart of an investment. When I thought the payments would be less that's a difference of nearly 10k over the loan, which I see as 3 regular stays at BC. I see it as I have to go more than 20 times for it to equate to a decent investment, which I think we will go to WDW every year, but I don't see the savings in the purchase now, plus I have the option as a non DVC member to try different resorts each year.

While I won't try to convince anyone that buying DVC via financing is a good idea, your logic seems to be a bit off. The payoff of DVC is the long term benefit. So yeah, for 15 years you at best breakeven. But then your BCV deed would be good til 2042. So 2031 is your breakeven, you then have 11 years of vacations at ~$1,500. That's what, $220ish per night at a deluxe resort? No way to do better than that. Even with an increase in dues it should still be well under half the room rate. But you really shouldn't look at DVC (or any timeshare for that matter) as an investment. Yes, DVC will do better than other random timeshares, but at best you might be able to break even if you have to resell it yourself within like 5 years. After that, the worth will start dropping due to the shorter lifespan on the deed. With the way DVC has been booking up during the cheaper periods, you really want to look to buy at the resort you want to stay at.

If you can't see yourself making that many trips, or going to WDW for that long, then DVC may not be for you. It's not a good fit for everyone, despite what the sales material will say.

 

[LSUxStitch]

Why not buy same amount of points at a cheaper resort (Saratoga) and then try to book BCV at the 7 month mark? You'd save money that way and still be able to stay BCV, if there are rooms available.

I haven't done the research, but the 2bdrm villas don't usually sell out as fast as studio/1bdrms at other resorts and with 5-7 people like you mention, I'm assuming thats the size room you'd be looking at.

Edit: 200 points at Saratoga resale for 16-17k, BCV for $21k

 

[LuvtheGoof]

Well my outlook is kinda changing on a DVC.
I'm not a millionaire but make a good living, but paying 30k cash isn't doable, so financing would need to be done. We're not interested in some cheaper option villas bc at that point we don't see it worry the investment. If my math is correct bc of interest, loan amount and maintenance fees... my monthly payment for 5yrs is atleast $700, meaning I'm paying $42,000 in 5yrs. Add that I still have to pay the $1,300 a year for maintenance fees. With that rate increasing each year after 10 additional years so 15 years down the road, I will have paid close to $70,000 for this DVC over 15 years. If I do a week at BC the next 20 years (so 5 additional year) at $500/night (rooms are at like $465/night so adding slight increase). Thus when it equals out to just the DVC and 15 years of maintenenace fees. I know there's additional perks to a DVC besides that, just doesn't seem now as smart of an investment. When I thought the payments would be less that's a difference of nearly 10k over the loan, which I see as 3 regular stays at BC. I see it as I have to go more than 20 times for it to equate to a decent investment, which I think we will go to WDW every year, but I don't see the savings in the purchase now, plus I have the option as a non DVC member to try different resorts each year.

Well, your math is way off for one thing. If you have 7 people, you are then looking at having to get a 2 bdr, which will run you over $900 per night already. Just for one week in July with taxes is over $6,000. So if you do that every year for 20 years, you are already at $120,000. And that doesn't take into account any price increases - and the room rate has lately gone up a lot more percentage wise than our maintenance fees. Oh, and that's for a 2 bedroom DVC villa. The 2 bedroom BC rooms are well over $1500 per night - not $465.

Look, I will not push DVC onto anyone either. It works for us, but not for everyone. But you do need to compare apples to apples. If you need a room for 5-7 people, then you can't even look at a regular hotel room cost for that trip. You can't put 7 people into those.

So as an example - if you go for 1 week in July and need a 2 bedroom, that would be 350 points. There is a resale contract for $39,200 for 350 right now. Dues are $6.13 per point, so $2,145 per year. After 20 years, you will have spent about $82,000. So for the same 2 bedroom - you are saving almost $40,000 over the next 20 years. DVC is for the long term - not the short term.

 

[GoofGoof]

9% interest rate seems high. If I purchase a timeshare for 30k and put 3k down and closing costs, by no means should the monthly payment be that much. So it has to be the interest rate. I have a 5yr Liam on a truck at 30k and only put 1,500 down and the payment is $420 with a 4% interest rate.

A timeshare loan is pretty much the equivalent of a personal loan from a bank. With a car loan if you don't pay they take the car back and resell it rather easily. With timeshares it's generally not as easy or in some cases impossible to get much value back from selling a foreclosed deed. Banks don't see the timeshare as a valuable piece of collateral so the rate is high like a personal loan with no collateral or a credit card would be. 9% is actually pretty low for a timeshare loan. They can actually go quite a bit higher. Even though DVC has a really good resale market the financial institutions that ultimately buy the loans still deem them as junk and so demand the really high rate.

If you can swing it it's better not to finance at all. Maybe save up for a few years and then buy with cash. If not maybe a home equity loan with a much lower interest rate. It's a little risky to put your house up as collateral but you will more than likely be able to resell your points and pay off the loan if you have a financial emergency.

 

[GoofGoof]

plus I have the option as a non DVC member to try different resorts each year.

Did you know you can use DVC points at any of the DVC resorts not just the resort you are an owner at? The only restriction is you have to wait until 7 months out so you could face an issue with availability for busy times and/or popular resorts and rooms types. You can also trade in points for stays at other non-DVC Disney hotels but it's usually not worth doing. Why trade in for a room at Port Orleans when you can stay at Bay Lake Tower

 

[GoofGoof]

Based on the facts presented I am assuming the OP would need about 300 points a year for a 2 br villa at BCV to sleep 5-7 people. That size contract resale goes for about $110 a point resale.

• If you put 10% down and finance the remaining $30K at 9% over 10 years your loan would have a payment of $376 per month.
• On top of that your MFs in 2016 would be $1,839 or $153 per month.
• Your monthly payment would come to $529.
• The MFs will go up every year but assuming a 3.5% increase a year you would have paid roughly $67K over 10 years for the loan and MFs plus $3K down for an all-in investment around $70K
• You would have spent 70 nights in a 2br villa or the equivalent of 140 nights in a studio room.
• That works out to $500 per night per studio room or the equivalent of a pre-tax rate of $444 a night per room.
• The rack rates at Beach Club for a lagoon or pool view studio hotel room are at least $479 per night pre-tax. That rate will also likely go up at least 4-5% a year.
• Assuming a 4% increase per year you would have paid roughly $70K to rent 2 studio rooms each year for 10 years.
• After 10 years you would have spent $70K to own DVC or $70K to rent 2 studio rooms a year at the rack rate. You have broken even on your DVC purchase.
• Lots of people assume a discount to rack vs paying full rack. If you factor that in you would potentially have a little longer to break even. Assuming you got the cash room at a 20% discount to rack it would take roughly 13 years to break even and at 30% roughly 15 years.
• Once you pay off the initial purchase each year you can stay on MFs alone. For example in year 11 you would pay roughly $2,500 in MFs vs over $7K to rent 2 studio rooms. That's when the big savings start and there's still 16 years left on the contract.
• If you got sick of WDW after 10 years and decided to sell your DVC you most likely would still do well. Let's assume your points could still be sold for $50 per point after selling costs. You would pull in $15K. If it was still worth $100 a point $30K. Nobody knows exactly what will happen to resale prices but it's safe to assume the points will be worth something in 10 years.

As you can see the financial benefit is longer in term. You won't see real savings until you get past your loan payoff date. One other thing to consider is that you would be staying in a 2br villa which would have a full kitchen, living room and washer/dryer. It's a much nicer room than 2 attached studios in the hotel. Having a kitchen with a full fridge allows you to get groceries delivered and you can save on food and/or beverages.

 

[TXDisney]

One of the reasons I want a bigger villa is so my family can come. Not just my wife, baby and I. They love Disney as much as us and would want to come each visit as well. They'd more than likely pay for our flights if we covered the timeshare each visit. So that's a benefit, but does make the amount of points I'd need more of an issue.

 

[dreamfinder]

One of the reasons I want a bigger villa is so my family can come. Not just my wife, baby and I. They love Disney as much as us and would want to come each visit as well. They'd more than likely pay for our flights if we covered the timeshare each visit. So that's a benefit, but does make the amount of points I'd need more of an issue.

So bank/borrow. So you go 2 out of 3 years instead of yearly, and your upfront ends up going down a fair amount. Then if you do decide to travel by yourself a few years down the road you aren't left with a surplus of points each year because you now only need a 1BR.

 

[GoofGoof]

So bank/borrow. So you go 2 out of 3 years instead of yearly, and your upfront ends up going down a fair amount. Then if you do decide to travel by yourself a few years down the road you aren't left with a surplus of points each year because you now only need a 1BR.

A really good suggestion. I currently do the bank/borrow thing each year. I only visit WDW every other year so I bought half the points I would need and just use this year and next year's points for my trip. We always stay in either a 1BR or 2BR villa so If I decided to do Disney every year I can either downsize to a studio for those 2 years, pay cash for a hotel room in the off year that I'm not using DVC or I can rent DVC points. So far I've found that every other year is plenty for me. Keeps everything fresh and there is usually something new I haven't seen before on each trip. We usually do a less expensive vacation on the off years too so it helps to level out the travel budget.

 

[TXDisney]

My parents own an rci timeshare as well. They've owned it my whole life and is a good reason why a DVC is even in our mind. My dads only used his timeshare besides someehere close to WDW 3 times. And that was to send my 3 uncles and my aunts on their honeymoons to Hawaii. Now that all of us (my parents kids) are grown and have kids of our own WDW is even bigger now. Bc of our families size just 1 timeshare doesn't fit us all. We tried it last December and it was tight. Me brother now has another son, my sister is having a son any day and my wife is due in April, so there's 3 more then what we already tried. So we will just plan on doing WDW on his timeshare every other year. But if I get a DVC he can start using their weeks for beach vacations to the carrivran and such as well rather than just WDW. We do about 1-2 beach vacations a year as a family as well. Normally Mexico but we book without a timeshare. My brother and sister in law aren't huge WDW fans like the rest of us so them coming every year might not happen.