buying DVC for distant future use

[Tynxuk]

Has anyone bought into DVC and instead of using the points rented them for the first few years of ownership? this may seem strange especially as we intend to go to Disney in 2021 but whilst free dining is offered as a family of 5 it still seems such a good deal.

My thoughts are DVC prices seem very stable and we would consider the initial outlay as a deposit that we would get most if not all or more back if we decided it was not for us (I understand it has an expiration date) so the only ongoing expense would be the dues.

My calculations that have lead me to this question are:

A 2 bed villa at SSR would be 496 points for the 2 weeks we intend to go (dues cost $3174 = £2540) we would then need to pay OOP for food approx £2500 so total around £5000 and I would be constantly checking food prices (it's something I can't switch off). Could opt for a 1 bed villa at OKW for 398 points (£2038) but put off by having to fold sofa beds away every day.

Booking 2 rooms at CSR with free qs dining and $200 gift card for the same 2 weeks next year would cost £6420 then there is the option of opting out of mouse keeping ($130 x2 = $260) so costs £1400 more but no thinking about food cost & $660 gift card to spend (potential to cancel room with one adult when room discount released losing £50 deposit, $200 gift card and free dining but should have adequate credits from the room booked for 4 - would calculate closer to the time).

IF we buy 250 points at SSR this year we would potentially have 500 points by 2021 that would have cost us $3200 in dues £2560 (obviously a bit more as they go up every year but it's a ball park figure for now). Assuming they have a rental value of £10 a point we could rent them for a profit of £2440 (remember we're considering the purchase price a deposit and ignoring it here). If we take that off the £6420 for CSR with free dining above our cost for 2021 holiday would be reduced to £3980.

When we intend to return in 2023/24 our eldest will be over 18 so may not want to join us making us a family of 4 so will do all these calculations again, free dining isn't guaranteed so looking to future proof our Disney holidays and I don't see DVC resale prices going down.

Is there anything I haven't thought about that I need to consider? TIA

[Halowa]

We have 2 contracts. I’ve costed out paying cash (with DDP) against using point and buying DDP.

For the lower end ‘luxury’ resorts OKW / SSR it’s more or less the same, without the initial outlay for a studio or one bedroom. Go to a two bedroom, DVC is better value.

If you book higher end luxury resorts, newer resorts as well as monorail it’s much cheaper having DVC.

The current renting market (because of DDP) seems to be short term rents, one or two nights, which could increase the risk to you as the renter.

The only thing you can guarantee is DVC cost will go up, if you can afford it, you’ve done your research, go for it.

[Moorlandman]

I wouldn’t invest in DVC whilst the pound is at it lowest value against the dollar in 40 years. But that’s just my opinion

You mention free dining being important so not sure why you would tie up $40k + annual fees and still pay for all meals?

[YorkshireT]

At current prices resale, 250 at SSR should cost about $27000. You might want to think though about 2 smaller contracts adding up to 250 as it will be easier to sell and get a bit more money on resale.
Yes, in the current conditions it’s easy to rent and you’d get $13.50 a point I think currently with Daves. I’ve had no issues renting, my first lot of points all went within hours, a later set took 2 days.
I’ve bought contracts and rented out the points which were banked, which I’ve done immediately, but I’m not sure I’d buy with no intention of using soon.
Also if you are happy with moderate in standard rooms, DVC may not be for you.
In terms of 1 beds, I wouldn’t worry about putting the sofa bed away, it just folds up with the sheets on and literally takes 10 seconds. You’d want to put it away anyway because the beauty of 1 beds is the living room, kitchen, laundry etc which is substantially better than going in a small room and you wouldn’t really want the bed out anyway.
DVC probably doesn’t save much money if you are happy to stay at CSR. What DVC allows you to do is stay at deluxe category for medium category money or less.
The free dining plan for U.K. guests can make DVC a harder sell to U.K. guests. Most DVC owners do not buy the dining plan (about 75% according to large surveys as it’s simply poor value) and many change their holiday habits anyway as they go year after year. For example we eat more quick serve now, have the odd meal in, eat breakfast in room getting an Instacart delivery in. Made easier in 1 and 2 beds with the kitchen and it’s more like being on a villa onsite. To be frank we can no longer be bothered tearing around trying to make ADRs every day and we now have a more relaxed and enjoyable holiday having eaten in many of the restaurants over the years and realising many are not that amazing. So I stayed in Boardwalk last year for example, and the room for a 2 bed was about $1700 a week in dues cost. Compared to any cash price even with free dining that was a fraction of what it would cost if booking on UK or USA site (you’d struggle to get one but think they run a minimum of about $800 a night at cheap times). Per day I spent about $150 all in for 4 of us roughly (not including tickets). So for around $3200 a week all in, including spending and all food , we were in a 2 bed suite at Boardwalk. Would have been much cheaper in a studio of course. But Boardwalk is significantly more expensive to book than CSR.
This Christmas when no dining plan is offered I’m staying in 1 beds at Beach Club and BLT. These are again costing under $2000 a week in dues for 1 beds, last time I looked at Xmas BLT 1 beds were over £7000 (£ not $) a week on Disney U.K. site at Xmas and New Year. I’d never have paid it, so that isn’t my saving as such but what my DVC allows me to do is make this trip when otherwise I simply would not have done it. When I’m walking back from New Year’s Eve fireworks or watching them from Top of the World Lounge, I’ll think it was money well spent indeed.
And the money I have spent is not dead money, I can always sell (currently at a hefty profit) and whilst the capital growth may not be there for someone buying in now the beauty of DVC is there are normally lots of eager buyers for the contracts.
As to buy in cost, those who have owned for some time have done very well, and over the past 3 years alone seen prices rise by 25%+. But never buy DVC as an investment as if there is a recession, you may find it going down in cost. But as things stand, if you’d bought 5 years ago (or even 3 years ago as the last 3 years in particular has had rapid growth) resale and sold now, you’d effectively have been paid to go and stay in Disney deluxe hotels for 5 years with the profit you’ve made. But as I say that is not guaranteed to continue but as long as the US economy does well, with Star Wars, the 50th etc, I see the contract prices slowly climbing still for the next few years. This also is only true if you buy resale, if you buy direct you are likely to lose something on any resale for the immediate future, but not massive amounts.
At the moment as long as the rental market remains buoyant, I will probably never sell as I can realise around 10% return on investment by rental. But if that changes I could sell.
Also be aware DVC management may try their best to damage resale prices to sell more direct, such as with the latest restrictions (which are currently going to hit those buying Riviera direct and future resorts the most when they sell) but so far it’s having little effect. DVC management changes regularly and this lot they have in now seem to care most about pushing people to direct sales than anything, they could damage the product in my view as one of the great things about DVC is its resale value so you don’t lose all your money when you come to sell (and possibly make a profit currently). I wouldn’t have bought if they damage resale values.
So to sum up if you like your studios in moderates, and free dining plan probably stick with that. If however you’d like to be in rooms like the video attached (exact same as I stayed in) for around $250 a night after buy in and can afford to park your capital in it then maybe think about it. You may or may not find it more expensive to buy in, in 2 years, too many variables including exchange rate and resale price market to predict.

[Tynxuk]

Thanks everyone for your input. YT your responses are always in depth and at a level I want to read, we seem to be on similar paths as we also have no interest in restricting ourselves with ADRs and only go QSDP but with the ever tightening restrictions on free dining DVC will allow us visits during times free dining isn't offered as I couldn't justify the cost of 2 rooms at a moderate without it and those 2 bed lock offs look amazing.
As we do not get our money to invest until August/September we still have some time to consider our options and DH is now swaying towards getting points at AKL (found they start around $105/point). I would really like to buy before we go in 2021 but part of me would also like to do a DVC tour with Disney but not sure we would be able to do this if we have already purchased resale.
Currently our intentions are to go 2 weeks at the end of August 2021 with free dining but that could change to DVC at xmas & new year closer to the time.

[YorkshireT]

You can do a DVC tour if you've purchased resale, no problem. I've never done one, but seen it on Youtube. I've never met a guide - just called one up to buy a direct add on.
I'd say it's important to research independently which you are obviously doing.
Also I'd say buy where you wouldn't mind staying if all else fails, but with 1 beds you'll for the foreseeable future be able to book anywhere in summer, and quite a few at peak times. But if you know you wouldn't mind staying where you bought, you've always got that peace of mind.
As such it's good to at least visit and preferably stay at the resort you may buy at if possible. I'm in the camp any deluxe would be fine for us that I've visited although we like walking and running outside so AKV is perhaps my least favourite for that reason. Others won't like SSR as it's too much walking etc. There's something for everyone, but every one is excellent based on my experience. I personally only wish the Crescent Lake resorts lasted longer as that is where I'd have bought.

[catlady]

Just a very minor point to add, don't know if you have a car usually, but DVC owners staying on site don't pay for parking! Hotel stays will? It does add up over 14+ nights?