When Dvc seems worth it!

[°o°-Hannah-°o°]

Originally Posted by Loulou127

Out of interest, those of you who own DVC and are quoting your weekly/annual spends are you including your initial outlay or just your annual dues? I appreciate as Mr Tom says you could sell at any time, but surely whilst your owning it’s an outlay you should be taking into account?

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So my dues were less than £600 this year. I bought in at a cost of $14,025 at the current rate 1.4 that’s approx £10k (then approx £7100), own for 47 years so divide that by 47 is approx £213 per year. So each year my dvc would cost me £800ish. If I rent my points out each year I’m looking at a minimum of £1400

[Loulou127]

Originally Posted by YorkshireT

Some of us have done very well from DVC. Depending on when you bought and how you bought. If like Tom you've owned for a long time you'll make a profit at this moment, have had years of use and it's been a great investment.
If you say bought a Saratoga resale even as late as the end of 2016 it will be worth $20- $25 a point now more than only 18 months ago.
But it's a luxury product and depends very much on the economy. It's enjoyed unprecedented growth this last couple of years in particular. But when you sell you have costs and commission (together nearly 10%) plus you have 15% witheld for capital gains unless you claim it back, a long process most people pay an expert $500 to do it for them.
Also if you buy a new one now at today's high prices what will happen? Will it continue to go up with Star Wars or could you be looking at a big loss if the economy collapses in 2021?
That's why you don't buy as an investment but there's no denying people including myself have done well as of today, out of something we didn't buy as an investment. 20% growth in the last 18 months has outperformed the stock market, but it can't carry on I don't think.
Then there's the time cost of money- what if you had invested that cash in something else? Assuming 8% compound growth in bonds or something, that adds up over a decade.
There will come a time when the contracts start diminishing in value. It's started with Vero and as we see those 2042 contracts edge nearer, we will start to see them lose value.
So some will look to sell and may get out at the right time. Some like me haven't invested that much, mine cost me about 13k all in for 185 points, not much more than a couple of WDW holidays. I have mine until 2054. It gives me (currently) an excellent rental return of over 10% pa (another positive is currently if you put your points up with David's you will likely rent within days at roughly double your annual dues cost), so as long as that continues, when I eventually tire of it (lf ever) I can see me just renting it out to end of life.
So I suppose the point is, when you buy DVC it doesn't mean the money is gone forever, at least in this current climate, and it has actually been possible to make a profit. Over the very long term though I suspect you'd probably make more investing that cash elsewhere.
So yes it is an outlay, but it's not one where you will not get anything back unless you keep until end of life and never rent the points. That is very rare, average ownership length is something like 15 years.

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Very well explained YT

[BevS97]

I bought in 2008 for £8000. As far as I’m concerned we had that money back long ago so I just look at the cost of my dues.

[Love*my*hols]

Originally Posted by BevS97

I bought in 2008 for £8000. As far as I’m concerned we had that money back long ago so I just look at the cost of my dues.

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We did too.150 points at BWV ,which are now worth more than we bought them for,about£12000 I think.We have had some amazing holidays with our points even if we never have another one,and we've got 24 years left.

[Mr Tom Morrow]

We bought in 2003. The maths has been done again and again and I know we theoretically paid them off in real terms in 7 years and from then on we were staying for the cost of the dues.

Now one could argue that my dues are circa the cost of a Villa for 10 weeks and thats a fair point. But I can still pull back my original investment and a profit.

[YorkshireT]

Originally Posted by BevS97

I bought in 2008 for £8000. As far as I’m concerned we had that money back long ago so I just look at the cost of my dues.

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Bev you're another whose had incredible value.
But, this is the big if...
Given the accelerating prices, particularly new prices and the massive increases above inflation, would someone buying now be saying the same in 2028- particularly if the are paying $180+ now?
I'm not sure...
Then again back in 2008 I'm not sure I'd have thought what has happened with prices would have happened back then.
But I do think if you crunched the numbers a while ago, it was easy to make a case for buying and at 180 a point I'm struggling to make that case. Which must mean it's now not as good value.
I think if the economy holds up next year, we'll see Riviera marketed as an ultra luxurious resort (another Grand Floridian) and we could see the first go to market price at $200. Great for us owners as it will further inflate our resales, but will make purchasing even more difficult to justify.

[catlady]

Originally Posted by BevS97

I bought in 2008 for £8000. As far as I’m concerned we had that money back long ago so I just look at the cost of my dues.

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We also bought in 2008, for just under £8,000 direct from Disney (think around £7,600 from memory?). At the time we also got a one off 160 points to use at SSR as AKL wasn't open, on top of our normal points we could bank.

So up until last year we have always been using banked points, which has meant longer stays then our 160 points allow. We have this year finally caught up because we originally wasnt going to go, so I used too many last year!

When we bought the exchange rate was 2 to 1 so that made a huge difference to the cost! You could easily spend £8,000 on just 2 years of hotel only bookings now a days? So we have definately stopped looking at our initial outlay, I think it's more than paid for itself!

I do think it will reach a ceiling though? It must do Disney can't keep on putting costs up like they do, eventually surely people will say enough is enough? .

[BevS97]

I definitely wouldn’t buy now for $180/point.

I haven’t checked resale prices lately but they used to be under $100/point which is my re reasonable. The other issue is the exchange rate. We were very lucky and bought when it was high. It makes a huge difference now.

It also affects dues. So I think the exchange rate is as big a factor as anything else.

[BevS97]

I’ve just checked and I could sell my DVC for £14000 ish (my contract is permanently stripped so I’d get less for it)

Not bad considering all the holidays we’ve had.

However, we have spent a fortune of flights and tickets along the way so I couldn’t truly argue we’ve saved any money. For what I’ve spent each we could have had a holiday elsewhere, or a cheaper holiday in Orlando.

[PoohBears#1fan]

We bought in 2002 at $69 a point and added on a year later at $74, the exchange rate was around $1.6. I had a spreadsheet and spent hours mulling over it at the time, we'd worked out that even with factoring in the initial outlay we were paying the same as we would to stay, for example, one of the cheapest hotels we could find on I-Drive.

There was no DDP back then, it was a VERY good way of pre paying to stay in luxury WDW hotels at a fraction of the real cost.

Would I buy direct now? Absolutely not, I don't think it's a good deal anymore and there are much better deals to be had, especially if you can be flexible with dates.