# Disney's Polynesian Villas & Bungalows



## DVC Mike

I've posted the point charts and point cost at 

http://www.mouseowners.com/forums/showthread.php?t=97542


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## Beefnot

Holy crap. Reading that mouseowners thread (where even more details and layouts are posted btw) the comments have me realize so clearly that I am just not a Disney head like that, even as I post this while at Aulani.

 Sure, I had temporarily lost my mind when I seriously contemplated a large DVC purchase at SSR a couple years ago, but now I feel like posting on that thread "$160 per point buy in with $6 per point MFs? Are you out of your Vulcan minds?!".  But even the mighty beefnot might collapse under the weight of the barrage of potential blowback. But I know that DVC ownership, and particularly new resorts like Grand Floridian and now Poly, is about the passion for Disney, not financial logic so much. More power to them.  Me, I will look forward to the prospect of exchanging into VGF or PVB in say 2020, but still be perfectly happy with SSR or OKW...


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## alwysonvac

Thanks for the Point Chart and the link.
The point requirements for a studio are a pleasant surprise. Maybe I'll get a chance to book a room with my DVC points


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## Myxdvz

My measly 160 points can only do 1 day at the bungalows!  

And I have a family of 6 so a Studio (or a 1BR) is not an option for us anymore.


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## Serina

Thanks for posting. Interesting...


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## blondietink

Those points charts are crazy. Lots of people might buy small contracts to stay in the studio unit every 3rd year via banking & borrowing. But notice how the points for a week don't divide by 3 for the studio except in one instance forcing people to buy more points. Member fees are too high also.


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## chriskre

Nice to see I own enough points to stay in a studio for a week.
Now availability will sure be another matter.


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## Beefnot

I was surprised at the lukewarm, actually rather cool, reception to the pricing that seems to be metastacizing over at mouseowners after the initially favorable or muted responses.


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## AnnaS

Thanks Mike.  We will have to take our chances with a Deluxe Studio.  Bungalows - we are out 

Will have to add it to our list of DVC resorts left to stay in - BLT & GFV.


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## alwysonvac

There's a video tour of the model room for the new Deluxe Studios along with photos @ InsidetheMagic

http://www.insidethemagic.net/2015/...ls-largest-vacation-club-deluxe-studio-rooms/


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## chriskre

I'm going to do the tour next week of the new units.
I'll see if I can get some pictures to post here.
It's at night though, so not sure if the pictures will be good. 
First time I've ever done a timeshare tour at night.


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## Bailey#1

I guess we won't be seeing any bungalow's under RCI anytime soon!!! lol


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## DisneyDenis

Myxdvz said:


> My measly 160 points can only do 1 day at the bungalows!
> 
> And I have a family of 6 so a Studio (or a 1BR) is not an option for us anymore.



How about 2 connecting Studios (at PVB)?  It's actually something doable for a family of 6. The bathrooms are good in that a shower is a separate area from the toilet/tub.


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## Myxdvz

DisneyDenis said:


> How about 2 connecting Studios (at PVB)?  It's actually something doable for a family of 6. The bathrooms are good in that a shower is a separate area from the toilet/tub.


A big part of our vacation and reason for getting a TS is to have washer/dryer and kitchen.  2 Studios will not give us any of that.  Also, while you can request studios, requests are not guaranteed and our kids are too small to not be with us.

We don't really have a bathroom situation right now as our kids are still small.  I can see how it will be an issue once they're teens, but not right now.


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## chalee94

Myxdvz said:


> Also, while you can request studios, requests are not guaranteed and our kids are too small to not be with us.



nothing is completely official yet but i would be willing to bet a dole whip that connecting studios will be an actual booking category and not a request.


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## SkyBlueWaters

Just saw the video. Wish I can say something nice even if I could afford it. I'd rather pay off my mortgage--no thanks.


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## Serina

Chalee94: "willing to bet a dole  whip"...very clever, I love it. (Dole whips are wonderful)


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## chriskre

chriskre said:


> I'm going to do the tour next week of the new units.
> I'll see if I can get some pictures to post here.
> It's at night though, so not sure if the pictures will be good.
> First time I've ever done a timeshare tour at night.



Well I did it by the deadline on Sunday.
Added on and already have the points in my account.


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## Myxdvz

chriskre said:


> Well I did it by the deadline on Sunday.
> Added on and already have the points in my account.



Addonitis kicked in! How many did you add?


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## chriskre

Myxdvz said:


> Addonitis kicked in! How many did you add?




Just 50.  
I already own at ssr. 


Sent from my iPhone using Tapatalk


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## chalee94

Serina said:


> Chalee94: "willing to bet a dole  whip"...very clever, I love it. (Dole whips are wonderful)



on the down side, it sounds like i owe Myxdvz a dole whip now.

(i'm definitely surprised DVC blew it on this one...   )


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## chriskre

chalee94 said:


> on the down side, it sounds like i owe Myxdvz a dole whip now.
> 
> (i'm definitely surprised DVC blew it on this one...   )



I'm actually happy with the studios.
Will make this much easier to rent our points since most people want studios.

And the rooms are actually pretty big.  You might be able to squeeze into a studio.  The two bathroom arrangement could make this work for some families who don't mind a little close knit togetherness.  It will probably keep you from eating in the room, but with all the decent options on the monorail line why bother cooking.


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## rfc0001

A couple quick points on cost of Poly and DVC in general, since people always focus on the sticker price, not the total cost per point on contract (since DVC contracts are a fixed number of points).

If you look at OKW presale price in 1991, it was $1.70/pt. on contract in today's dollars. Therefore, the total cost of each point used on that contract _this year_ is $1.70 + $5.84 (MF/pt.) = $7.54/pt.

Compared to Poly pre-sale, each point used _this year_ on that contract costs you $9/pt -- only 20% more than the OKW contract purchased in 1991 on day 1. For comparison, SSR/AUL (sub)/OKW (ext) _resale_ are $7-$8 total cost per point on contract; AUL/BLT/VGC/AKV/OKW are $8-$9; BWV/VWL/BCV/HHI/VGF are $9-$10, and VB is $10+.

In all cases, what this saves you is relative to the cost to rent the same points. Poly points rent for $15-$16 @ 7-11 mos. so buying direct saves you over 40%. Disney rents Poly DVC direct for around $24/pt., so buying saves you over 60% off rack rates.

If you really want to save money, you can easily rent half your points to pay for your MFs, resulting in the remaining points costing you ~$3/pt. To put this in perspective, an average 1bdrm week in DVC across all seasons is 265 pts., so _a 1 bdrm week in DVC would only cost you $795 -- less than the MF + RCI fee _for the "free" RCI trader people use to trade into DVC (with limited availability and flexibility)_._

FWIW, we added on @ Poly. We are 1bdrm people, but the lower point Studios will allow us to stay in MK more often, and the benefits of 5 min. monorail to MK, 5 min. walk to TCC Epcot monorail, lake view, Hawaiian feel, largest studios in DVC, _and Dole Whips sealed the deal _ We'll probably do split stays there to be able to stay @ MK for 3-4 nights then have a 1bdrm (w/laundry and kitchen) the rest of the nights, and also stay @ Poly for shorter stays (e.g. 6 nights in Lake View Studio week before Christmas for only 132 pts.). If we end up not using it (unlikely), the $15/pt. rental potential is still attractive.

Bottom line, yes, DVC is expensive to _purchase_, but it does have tremendous _value_ -- and Poly is no exception.


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## chriskre

rfc0001 gives a good analysis.
Mickey math works for most of us Disneyphiles.:rofl:

I've been renting half my points the past few years and getting nicely subsidized vacations with the other half.    I like to go for long weekends and DVC is great for that and not having to mess with RCI.  

Now that I'm retired I can go for long weekday trips and save myself the weekend points cost and still accomplish the same end result of more Disney time for less points.  

When I tire of Disney I can probably recoup most of my "investment".


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## rfc0001

chriskre said:


> rfc0001 gives a good analysis.
> Mickey math works for most of us Disneyphiles.:rofl:
> 
> I've been renting half my points the past few years and getting nicely subsidized vacations with the other half. I like to go for long weekends and DVC is great for that and not having to mess with RCI.


Chris -- sorry for convincing you with my Mickey math -- you'll thank me later when you're sipping Dole Whips on the beach 


> Now that I'm retired I can go for long weekday trips and save myself the weekend points cost and still accomplish the same end result of more Disney time for less points.


Not to mention Choice and Adventure season...I was amazed you could stay in a Poly Studio _for 2 months _from Sep 1-Oct 31 for "only" 1000 points 

 Russ


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## Myxdvz

Convince me too!!!!  :rofl::rofl::rofl::rofl::rofl::rofl:

What's the option for my family of 6?  We have 170 points right now at BLT.


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## rfc0001

Myxdvz said:


> Convince me too!!!! :rofl::rofl::rofl::rofl::rofl::rofl:
> 
> What's the option for my family of 6? We have 170 points right now at BLT.


I'll leave it to you to convince yourself whether you _need_ PVB . That said, you you really only need to own at a particular resort if it sells out at 7-11 mos, which aside from October, Easter, and Christmas, resorts rarely do. The only thing that sells out @ 7-11 mos typically are BLT Standard views, VGF Studios/2 bdrm lock-offs, AKV Value/Concierge, AUL Standard views, BCV 2 bdrm (2 Queen), and BWV Studios. If you need to book one of these or during Easter, October, Christmas, then buy that resort. PVB is still up in the air whether or not it will sell out at 7-11 mos. _Very early _(as in 1 day into booking) indications are standard studios will sell out first (not a huge surprise), followed by lake view during typical high demand periods (Easter, October, Christmas). If you don't need to book one of the above room types or time periods, buy SSR which is the most cost effective way (both in terms of upfront purchase _price _and _value - _total cost per point on contract). While PVB isn't a bad _value _(total cost per point on contract), it's the highest upfront _price _(since it has more years of points), and still isn't the _best_ value on a total cost per point on contract basis -- SSR, AUL (subsidized), OKW (extended), BLT, VGC, OKW, and AKV _resale _are all better _values _(_and _lower upfront _price_).

Russ


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## chriskre

rfc0001 said:


> Chris -- sorry for convincing you with my Mickey math -- you'll thank me later when you're sipping Dole Whips on the beach
> Not to mention Choice and Adventure season...I was amazed you could stay in a Poly Studio _for 2 months _from Sep 1-Oct 31 for "only" 1000 points
> 
> Russ



Love my Dole Whips. 
I rarely go to Disney without making a trip to Poly for a Dole Whip.
This last trip last month they actually gave us free dole whips when you did the timeshare tour at SSR of the Poly units.  
Yeah Mickey even sold me sight unseen from SSR on Poly.  Imagine that.   :hysterical:

And this girl does not do high seasons.  
I don't like crowds and want longer leisurely stays.
May, October and December are my favorite Disney times.  
The rest of the year the rest of the world can have it.


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## Myxdvz

rfc0001 said:


> I'll leave it to you to convince yourself whether you _need_ PVB . That said, you you really only need to own at a particular resort if it sells out at 7-11 mos, which aside from October, Easter, and Christmas, resorts rarely do. The only thing that sells out @ 7-11 mos typically are BLT Standard views, VGF Studios/2 bdrm lock-offs, AKV Value/Concierge, AUL Standard views, BCV 2 bdrm (2 Queen), and BWV Studios. If you need to book one of these or during Easter, October, Christmas, then buy that resort. PVB is still up in the air whether or not it will sell out at 7-11 mos. _Very early _(as in 1 day into booking) indications are standard studios will sell out first (not a huge surprise), followed by lake view during typical high demand periods (Easter, October, Christmas). If you don't need to book one of the above room types or time periods, buy SSR which is the most cost effective way (both in terms of upfront purchase _price _and _value - _total cost per point on contract). While PVB isn't a bad _value _(total cost per point on contract), it's the highest upfront _price _(since it has more years of points), and still isn't the _best_ value on a total cost per point on contract basis -- SSR, AUL (subsidized), OKW (extended), BLT, VGC, OKW, and AKV _resale _are all better _values _(_and _lower upfront _price_).
> 
> Russ


I know all that already! Haha. We bought BLT because of BLT Std. Would also only use our BLT points if booking VGF or Poly.  If not, I would most likely rent them and play the RCI OGS with a Bonnet Creek backup game


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## rfc0001

Myxdvz said:


> I know all that already! Haha. We bought BLT because of BLT Std.


You, my friend, got a sweet deal on BLT if you bought in with incentives! Still sells for more resale than the early prices (back when the contract was loaded with 50+ years of points). Too bad I was all about resale back then -- really wished we had bought BLT. That's the only other resort I still want/need to add-on (like I really _need_ more points -- trying to stay in triple digits )


> Would also only use our BLT points if booking VGF or Poly. If not, I would most likely rent them and play the RCI OGS with a Bonnet Creek backup game


AKA the random SSR booking generator  You're much better off with DVC to book what you want when you want. I just use RCI to displace my DVC points so I can rent some of them to offset my MFs.  Don't tell anybody, but I actually really like SSR  -- but if I'm using my DVC points I prefer MK resorts with young kids (or AKV if we are driving so we don't have to wait on busses).


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## JudyS

rfc0001 said:


> A couple quick points on cost of Poly and DVC in general, since people always focus on the sticker price, not the total cost per point on contract (since DVC contracts are a fixed number of points)...


Rfc0001, when doing such an analysis, one should consider that if a buyer actually wants to pay the initial purchase price over a number of years, the buyer has to take out a loan and pay interest. Even if one has the money available to pay for a DVC contract outright, there is still the "opportunity cost" of the money spent on the initial purchase. (In other words, the $32,000 it costs to buy 200 DVC points could have been invested in the stock market, or used to pay down one's mortgage.) Once one includes the interest or opportunity cost of the initial price, the initial purchase price per DVC point turns out to be much more of a factor. 

Your analysis really only works if Disney lets buyers finance the initial purchase price at 0% interest for 50 years -- and Disney is not going to do that.


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## rfc0001

JudyS said:


> Rfc0001, when doing such an analysis, one should consider that if a buyer actually wants to pay the initial purchase price over a number of years, the buyer has to take out a loan and pay interest. Even if one has the money available to pay for a DVC contract outright, there is still the "opportunity cost" of the money spent on the initial purchase. (In other words, the $32,000 it costs to buy 200 DVC points could have been invested in the stock market, or used to pay down one's mortgage.) Once one includes the interest or opportunity cost of the initial price, the initial purchase price per DVC point turns out to be much more of a factor.
> 
> Your analysis really only works if Disney lets buyers finance the initial purchase price at 0% interest for 50 years -- and Disney is not going to do that.


Agreed, purchase price is high, therefore most do take out loans from Disney (at 8.99% with 20% down over 10 years). If you can't afford the purchase price, renting points from members for $11-$15 is probably the better route (still saves half over book rate). That said, DVC returns 100% if rented out.   Conversely, it saves you 50% on stays at Disney, which is the real value. since we aren't really talking about an investment -- we are talking about the ability to enjoy family vacations -- irreplaceable memories and family traditions. I'd invest in that over stocks any day  Not to put to fine a point on it, but just to add -- my "opportunity cost" is I only have so many family vacations with my kids, and I've blinked, and my oldest DD is already half way to a teenager, and my youngest DD is a third of the way to driving. I would gladly spend every dime I have building memories and family traditions, which at the end of the day is what timesharing buys me. Money means nothing to me, but maximizing the money I have toward the priorities I have (family), does. I hope to die broke, but happy, and pass both on to my children. Sorry to get all serious -- just clarifying why it's not all about the value (in terms of money), but it _is_ all about the value (in terms of maximizing family vacations and memories).


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## Myxdvz

I didn't take out a loan to pay for my DVC purchase.  I read all about these opportunity costs and stuff, but while I see the logic in it -- I know that at least in my reality, if I didn't buy DVC -- I would have just bought something else -- like go on another vacation, a new camera, clothes, jewelry, bags, etc.  To me, it was disposable money and not really investment money.  At the time I bought my DVC, I had $0 money in investment/stocks outside of my 401K.

Of course I've learned since then, gotten smarter with my money, bought resale for succeeding TS and I guess just got lucky that if I sell my BLT points right now, I would have gotten my purchase $ back and gotten my previous stays basically for free.


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## rfc0001

Myxdvz said:


> I didn't take out a loan to pay for my DVC purchase. I read all about these opportunity costs and stuff, but while I see the logic in it -- I know that at least in my reality, if I didn't buy DVC -- I would have just bought something else -- like go on another vacation, a new camera, clothes, jewelry, bags, etc. To me, it was disposable money and not really investment money. At the time I bought my DVC,* I had $0 money in investment/stocks outside of my 401K.
> *
> Of course I've learned since then, gotten smarter with my money, bought resale for succeeding TS and I guess just got lucky that if I sell my BLT points right now, I would have gotten my purchase $ back and gotten my previous stays basically for free.


*Glad I'm not the only one *  I'm in the same boat -- could sell all my DVC points for more than I bought them for (I bought SSR resale in the 60s and AUL in the 80s), and in the mean time I am saving 50% on DVC stays and/or making 100% profit when renting the points (my average total cost per point is <$7 _including Poly and AUL_).   No regrets.


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## bnoble

Regarding opportunity cost: I've generally stopped trying to argue this point with folks, but because this is getting some attention, I'll try one more time.

Even if you pay cash up front for the purchase, there is still an opportunity cost to that initial purchase that has to be added to ongoing annual costs. Instead of buying that DVC contract, you could instead invest the original purchase price in some vehicle, add the annual dues you would have ordinarily paid to that account each year, and rent the stay you want from some other member.  So, you have to amortize the purchase price at the interest rate equivalent to what you expect to earn after taxes in that investment vehicle to get the true annual cost of ownership.  You can't just divide the purchase price by the number of years in the contract.

It still generally works out to be cheaper owning resale than renting from a member at reasonable assumptions about investment return, but not by as much as you'd think. Interestingly, it generally works to better to rent form a member than to buy from the developer---even at the eye-popping rental prices DVC can generate.

However, almost no one includes this in their analysis, and the answers as to why are many and varied.  "I don't have investments."  "I would have spent it anyway."  But, if you aren't including opportunity cost in your analysis, you are essentially telling me that you'd give me $30,000 today, let me give you $1,000/year for the next 30 years, and we'd be even at the end of that period. I will take that deal from as many as wish to participate.



> DVC returns 100% if rented out


I'm not sure how you get this.  A resale point at e.g. BLT costs about $100. Annual dues are $5.05.  David will pay you $13 and do most (but not quite all) of the work, so you get $7.95 annually for your $100 investment---or about 8%, pre-tax.

Surprisingly, you do almost exactly as well at SSR, because of the lower cost basis. A resale point there is running about $75 these days.  Dues are $5.17.  David will pay $11. That's a return of 7.77%

Edited to add: the fact that almost no one ever gets this right is the reason why I am insisting my kids take a personal finance course in high school---online, if they have to. I didn't learn this until I took Engineering Economics as an undergraduate, but it has been one of the most useful classes I've ever taken.


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## chriskre

bnoble said:


> Regarding opportunity cost: I've generally stopped trying to argue this point with folks, but because this is getting some attention, I'll try one more time.
> 
> ..................................
> 
> Edited to add: the fact that almost no one ever gets this right is the reason why I am insisting my kids take a personal finance course in high school---online, if they have to. I didn't learn this until I took Engineering Economics as an undergraduate, but it has been one of the most useful classes I've ever taken.



Please, please, please don't confuse me with the facts.

I'm much happier with my Mickey math.  :hysterical:


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## Rsauer3473

I thought there would be no math on this site.


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## chriskre

Rsauer3473 said:


> I thought there would be no math on this site.



There is always some professor spoiling the fun with logic.


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## dumbydee

We did a Disney timeshare tour last week while at WDW.  I was ready to buy but my husband said no.

We own Wyndham and usually stay at Bonnet Creek but I love staying on site as I am one of those Disney fanatics!

My question is - what do you give up if you buy resale DVC points?  

Our Wyndham points were resale and I have not seen any reason why I would ever pay full price for Wyndham.


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## chriskre

dumbydee said:


> My question is - what do you give up if you buy resale DVC points?
> 
> .



Not much that you would miss.  

Exchanging points for a Disney cruise or Adventures by Disney, exchanging thru Buena Vista Trading which is their own exchange company.  
You can still exchange thru RCI though you probably would never do it if you own other timeshares that are cheaper.

Not having to worry about ROFR if you want to buy a small package of points which are usually not easy to find on the resale market.

The ability to combine use years for ease of using and keeping track of your points, you could always wait for your use year to come along 
if you buy more than one contract on the resale market.  

Owner financing of contracts by Disney.  

Although Disney buying direct is expensive they do give incentives.
Both contracts that I have bought from Disney came with incentives.
I got a $1500 instant rebate when I purchased SSR which brought the price of my points down from $100 to $90.  
I am sure that sale was recorded as $100 a point but in reality paid $90.  Disney also didn't charge any closing costs.  
Resale contracts charge closing costs.  Disney is now charging them also but they didn't used to and it's less than the resellers.  

My Poly points came with free 2014 points with no MF's for the year so in essence that is also an incentive.  
Poly is renting for $16 a point so that's nice if I want to recoup a little of my down payment.  Closing costs were $150.  

Maybe a few other little things that I can't quite think of right now.


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## JudyS

I agree 100% with Brian's (BNoble's) analysis. 

There's no requirement to analyze the finances of one's DVC purchase, but if one does, one should take all the factors into account. And when you do the full analysis, that $160 per point purchase price turns out to be *way* high. It's far more than 20% more than DVC used to cost, even after adjusting for inflation.

Also, buying DVC at $160 per point, renting it out, and getting a "100% return on investment" would require renting out each DVC point for about $165 ($160 purchase price plus $5 in annual dues.) It's hard to get even $15 a point when renting out DVC. 

By the way, I was at Old Key West years back and started up a conversation with a passenger on the Disney bus. It turned out to be BNoble. And, we both live in Ann Arbor! It *is *a small world, after all.


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## rfc0001

bnoble said:


> I'm not sure how you get this. A resale point at e.g. BLT costs about $100. Annual dues are $5.05. David will pay you $13 and do most (but not quite all) of the work, so you get $7.95 annually for your $100 investment---or about 8%, pre-tax.


Obviously a $30K investment doesn't return $30K a year. I'm saying the value of each annual point is worth 100% more than what you paid for it -- even adjusted for inflation. The cost you pay for a DVC point is the total price you paid divided by points _remaining _on contract _in today's dollars _(adjusted for inflation) plus the current MF/pt. -- this is your total out of pocket cost for each point you use this year. For me personally, SSR resale cost me $6.80/pt. total cost in today's dollars, including MFs. Those same SSR points can be rented for $13 direct (I did so just yesterday -- would be happy to email you the contract). So, the value of the annual points I receive is worth 91% more than my total cost for those points in _today's dollars_.


JudyS said:


> I agree 100% with Brian's (BNoble's) analysis.
> 
> There's no requirement to analyze the finances of one's DVC purchase, but if one does, one should take all the factors into account. And when you do the full analysis, that $160 per point purchase price turns out to be *way* high. It's far more than 20% more than DVC used to cost, even after adjusting for inflation.


OKW cost $0.98/pt. on contract ($49 for 50 points) in 1991. So, for each point you use this year, its total cost is $1.70/pt. ($0.98 in today's dollars) + $5.85/pt. MF = $7.54/pt.

PVB purchased resale last month cost $160 for 51 points -$6/pt. credit for developer paid 2014 MFs - $2/pt. credit for developer paid 2015 MFs + $3/pt. closing = $155/pt. for 51 points on contract = $3.03/pt. + $6.02 MF/pt. = $9.05/pt. -- this is the total cost per point you receive this year -- only 20% more than the $7.54 for the OKW point purchased in 1991.

It's simple math -- and it is correct.


> Also, buying DVC at $160 per point, renting it out, and getting a "100% return on investment" would require renting out each DVC point for about $165 ($160 purchase price plus $5 in annual dues.) It's hard to get even $15 a point when renting out DVC.


I'm talking return _per point. _Obviously you don't spend $30K an get $30K a year return.


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## JudyS

rfc0001 said:


> ... I'm saying the value of each annual point is worth 100% more than what you paid for it -- even adjusted for inflation. ....


There are standard ways of figuring the "annual cost" of something. When one calculates the annual cost of a DVC point using these standard ways, it's difficult to break even renting out DVC points purchased at their current developer price. DVC points purchased resale are better, but still only about a 7% or 8% return-on-investment.

If someone wants to evaluate DVC points strictly from a financial standpoint, that's fine. If someone wants to ignore the financial aspects and just focus on the enjoyment they get from DVC, that's fine, too. But you can't have it both ways. If one is presenting a *financial* analysis and someone else questions that analysis, saying that a DVC ownership provides non-tangible benefits isn't really an answer. 

I love my DVC points and am glad that I bought them. They have provided  benefits that I really can't put a price on. However, many people come to these forums trying to decide whether a timeshare is a good deal financially or not. When people on this forum say things such as "I'll take that over the stock market any day" or "the value of each annual point is worth 100% more than what you paid for it," that is misleading to people who are evaluating a timeshare purchase.

And by the way, yes, there are cases where someone invests $30k in something (say, a stock) at the beginning of the year , and ends up with $60k, or even more, at the end of the year. Obviously, it is hard to predict which investments will do that. But, predicting what timeshare prices will do in the future is hard, too.


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## bnoble

JudyS said:


> By the way, I was at Old Key West years back and started up a conversation with a passenger on the Disney bus. It turned out to be BNoble. And, we both live in Ann Arbor! It *is *a small world, after all.



I remember that!  My son and I are going back to OKW for the first time in many years for Easter break this year.


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## rfc0001

JudyS said:


> There are standard ways of figuring the "annual cost" of something. When one calculates the annual cost of a DVC point using these standard ways, it's difficult to break even renting out DVC points purchased at their current developer price. *DVC points purchased resale are better*, but still only about a 7% or 8% return-on-investment.


_*This *_is not always true -- VWL, BWV, HHI, BCV, and VB are all more expensive total cost per point (the purchase price you pay per point remaining on contract in today's dollars plus MF/pt.) than Poly. That is my entire point. People mistakenly assume resale is always cheaper -- it's not. They look soley at the sticker price, which doesn't factor in different contract lengths and different MFs -- and MFs are the majority of the cost, which is why the OKW purchased for $1.70 in 1991 is barely cheaper than the Poly purchased for $3/pt. since MFs are priced in current dollars, not based on when you purchased.


> If someone wants to evaluate DVC points strictly from a financial standpoint, that's fine. If someone wants to ignore the financial aspects and just focus on the enjoyment they get from DVC, that's fine, too. But you can't have it both ways. If one is presenting a *financial* analysis and someone else questions that analysis, saying that a DVC ownership provides non-tangible benefits isn't really an answer.


Actually you can have it both ways -- my SSR resale points return 13% a year if rented out -- which is a good investment -- or I have the option of using them for enjoyment. I made it clear DVC is not an investment for me (nor should it be for anyone else), however if you are going to evaluate it as an investment it still isn't bad, and unlike most investments you can enjoy it -- which is what a timeshare is all about. I'm not sure why the bar is so high for DVC and not for other timeshares. I guess it's because it's so expensive upfront, but it also saves you thousands of dollars a year, vs. a typical timeshare which may save you hundreds if you are lucky. 


> I love my DVC points and am glad that I bought them. They have provided benefits that I really can't put a price on. However, many people come to these forums trying to decide whether a timeshare is a good deal financially or not. When people on this forum say things such as "I'll take that over the stock market any day" or "the value of each annual point is worth 100% more than what you paid for it," that is misleading to people who are evaluating a timeshare purchase.


I struck the previous comment, because I agree it's misleading, and I was goaded into saying it -- I'm not sure why we ever got on the topic of viewing DVC as an investment. But saying the annual benefit is 100% of the cost is _not _misleading at all -- that's exactly how you would compare any timeshare -- the difference between the annual value and the annual cost, which eventually breaks even with your purchase cost. I'm doing one better -- I'm _including _the purchase cost in the annualized return. I'm also being extremely conservative in assessing value, since the real value is relative to booking DVC direct which is around $24/pt. Using a standard timeshare valuation, you would say the annual value is $24, the annual cost is $6, so you are saving $18/pt. (300% of the annual cost) every year. At some point that breaks even with your upfront investment, then it's all gravy.


> And by the way, yes, there are cases where someone invests $30k in something (say, a stock) at the beginning of the year , and ends up with $60k, or even more, at the end of the year. Obviously, it is hard to predict which investments will do that. But, predicting what timeshare prices will do in the future is hard, too.


Again, I fail to see how that's relevant. We are talking about timeshares, not investments. You can't take a vacation in your investment, and like I say, with DVC you can -- _and_ if I _really _wanted to evaluate it as an investment, my SSR resales return 13% a year (for me) not to mentioned all my DVC resale values are much higher than I paid despite deriving value from them -- at almost no annual cost since I can pay most of my MFs by renting.


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## JudyS

Rfc0001, the way you are figuring annual cost is very different from how financial experts figure annual costs. Your analysis excludes the time value of money. In other words, your analysis assumes that $1 in a person's pocket today is worth the same as $1 (adjusted for inflation) in that person's pocket 50 years from now. 

Financial experts agree that money in one's pocket today is more valuable than the same amount of money at some point in the future, even after adjusting for inflation. Even when inflation is very low (as it is now) billions of people worldwide are willing to pay interest (often very high interest) to borrow money. If there was no such thing as the time value of money, no one would be willing to pay interest on a loan.   

Here's how the time value of money works in this particular situation. Let's say a purchaser (call him Developer Dave) buys a 200-point Polynesian Villas contract from the developer (Disney) at $160 a point, which is $32,000 total. That Polynesian Villas contract will be good until 2065 (at least I think it's 2065.) Another purchaser (call him Resale Reginald), buys a 200-point Saratoga Springs contract resale at $75 a point, which is $15,000 total. That Saratoga Springs contract will be good until 2054. 

Sure, Dave gets an extra 11 years on his contract compared to Reginald, but Dave doesn't get to start using those extra years until 2055. Yet, Dave has to come up with the extra $17,000 in purchase cost *now*. (Home resort booking priority also is important, plus Disney offers a few developer-only 'privileges' that are generally a poor value. But here, I'm focusing only on the time value of money.) 

You and I agree that when valuing different DVC contracts, people should take into consideration all the factors, such as differing annual fees between different DVC resorts, and also the amount of years left on the right-to-use. Where we disagree is that I am also considering the time value of money, whereas you insist that the time value of money doesn't exist. 

You are entitled to value your DVC ownership anyway you want, but for other people who come to this board, especially those new to timeshare, it's important to point out all the costs of timeshare ownership. This includes the fact that coming up with thousands of dollars today is harder than coming up with thousands of dollars over a period of decades.


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## icydog

JudyS said:


> Rfc0001, the way you are figuring annual cost is very different from how financial experts figure annual costs. Your analysis excludes the time value of money. In other words, your analysis assumes that $1 in a person's pocket today is worth the same as $1 (adjusted for inflation) in that person's pocket 50 years from now.
> 
> Financial experts agree that money in one's pocket today is more valuable than the same amount of money at some point in the future, even after adjusting for inflation. Even when inflation is very low (as it is now) billions of people worldwide are willing to pay interest (often very high interest) to borrow money. If there was no such thing as the time value of money, no one would be willing to pay interest on a loan.
> 
> Here's how the time value of money works in this particular situation. Let's say a purchaser (call him Developer Dave) buys a 200-point Polynesian Villas contract from the developer (Disney) at $160 a point, which is $32,000 total. That Polynesian Villas contract will be good until 2065 (at least I think it's 2065.) Another purchaser (call him Resale Reginald), buys a 200-point Saratoga Springs contract resale at $75 a point, which is $15,000 total. That Saratoga Springs contract will be good until 2054.
> 
> Sure, Dave gets an extra 11 years on his contract compared to Reginald, but Dave doesn't get to start using those extra years until 2055. Yet, Dave has to come up with the extra $17,000 in purchase cost *now*. (Home resort booking priority also is important, plus Disney offers a few developer-only 'privileges' that are generally a poor value. But here, I'm focusing only on the time value of money.)
> 
> You and I agree that when valuing different DVC contracts, people should take into consideration all the factors, such as differing annual fees between different DVC resorts, and also the amount of years left on the right-to-use. Where we disagree is that I am also considering the time value of money, whereas you insist that the time value of money doesn't exist.
> 
> You are entitled to value your DVC ownership anyway you want, but for other people who come to this board, especially those new to timeshare, it's important to point out all the costs of timeshare ownership. This includes the fact that coming up with thousands of dollars today is harder than coming up with thousands of dollars over a period of decades.



Wow, that was an incredible explanation. I understood everything you said, which is saying something.  

If Developer Dave only uses his points in the 11-7 month timeframe, and only at the Poly, then would your description change? Isn't the use of his timeshare, like the Plat Plus weeks for Marrriott's Ko Olina resort (for example) more valuable if used for that express reason? Doesn't the way Dave uses his membership mean it is more valuable to him? No matter the time value of money?


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## Cdn Gal

8.99%??!!!!????     is this true???  That is a crazy percentage for an interest rate!!!  Yes, I live in Canada, but my home owner line of credit is 3.35%. How can people afford 8.99%???




rfc0001 said:


> Agreed, purchase price is high, therefore most do take out loans from Disney (at 8.99% with 20% down over 10 years). If you can't afford the purchase price, renting points from members for $11-$15 is probably the better route (still saves half over book rate). That said, DVC returns 100% if rented out.   Conversely, it saves you 50% on stays at Disney, which is the real value. since we aren't really talking about an investment -- we are talking about the ability to enjoy family vacations -- irreplaceable memories and family traditions. I'd invest in that over stocks any day  Not to put to fine a point on it, but just to add -- my "opportunity cost" is I only have so many family vacations with my kids, and I've blinked, and my oldest DD is already half way to a teenager, and my youngest DD is a third of the way to driving. I would gladly spend every dime I have building memories and family traditions, which at the end of the day is what timesharing buys me. Money means nothing to me, but maximizing the money I have toward the priorities I have (family), does. I hope to die broke, but happy, and pass both on to my children. Sorry to get all serious -- just clarifying why it's not all about the value (in terms of money), but it _is_ all about the value (in terms of maximizing family vacations and memories).


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## Rsauer3473

I'm not so sure about the math above. 
What if Dave buys at the Poly, keeps it a few years, then rents it out because he had a total knee replacement and he can't walk fast at WDW. But back in 2011 he had purchased some Disney stock at about $40 per share and sold today at over $103 which made him a bundle. Nevertheless, because of his tax bracket he loses some of the profit which he made up by participating in an entertainment sector hedge fund. By the way, did I tell you Dave's wife sought a divorce from Dave earlier because of his bad investments in Nokia? She really rolled him.
Nevertheless, Reginald made out okay at SSR. He vacations there occasionally and usually keeps up with his MF's especially since his new partner in life Duane got a new job with CISCO. After Reg retires he expects his 401(k) to help him maintain his ownership in case he finds himself single again. 2054 is a long way off. By that time Aunt Betty will croak and leave him the rents on her condo in Boca.

This is just a way of saying that life sometimes gets in the way of math. We make decisions, some good, some bad. And usually not because of them pesky numbers. We bought DVC in 1993 and several contracts since. I've used it a lot, rented some, but never regretted it, especially the $57/ point initial buy. We're happy.


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## Cdn Gal

Thank you . I too found your explanation very straightforward and understandable!  :whoopie:  It makes a lot of sense 
   (QUOTE=JudyS;1727669]Rfc0001, the way you are figuring annual cost is very different from how financial experts figure annual costs. Your analysis excludes the time value of money. In other words, your analysis assumes that $1 in a person's pocket today is worth the same as $1 (adjusted for inflation) in that person's pocket 50 years from now. 

Financial experts agree that money in one's pocket today is more valuable than the same amount of money at some point in the future, even after adjusting for inflation. Even when inflation is very low (as it is now) billions of people worldwide are willing to pay interest (often very high interest) to borrow money. If there was no such thing as the time value of money, no one would be willing to pay interest on a loan.   

Here's how the time value of money works in this particular situation. Let's say a purchaser (call him Developer Dave) buys a 200-point Polynesian Villas contract from the developer (Disney) at $160 a point, which is $32,000 total. That Polynesian Villas contract will be good until 2065 (at least I think it's 2065.) Another purchaser (call him Resale Reginald), buys a 200-point Saratoga Springs contract resale at $75 a point, which is $15,000 total. That Saratoga Springs contract will be good until 2054. 

Sure, Dave gets an extra 11 years on his contract compared to Reginald, but Dave doesn't get to start using those extra years until 2055. Yet, Dave has to come up with the extra $17,000 in purchase cost *now*. (Home resort booking priority also is important, plus Disney offers a few developer-only 'privileges' that are generally a poor value. But here, I'm focusing only on the time value of money.) 

You and I agree that when valuing different DVC contracts, people should take into consideration all the factors, such as differing annual fees between different DVC resorts, and also the amount of years left on the right-to-use. Where we disagree is that I am also considering the time value of money, whereas you insist that the time value of money doesn't exist. 

You are entitled to value your DVC ownership anyway you want, but for other people who come to this board, especially those new to timeshare, it's important to point out all the costs of timeshare ownership. This includes the fact that coming up with thousands of dollars today is harder than coming up with thousands of dollars over a period of decades.[/QUOTE]


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## JudyS

icydog said:


> Wow, that was an incredible explanation.


Thanks! I'm glad my 15 years of teaching statistics to bored college freshmen has given me some useful skills! 



icydog said:


> If Developer Dave only uses his points in the 11-7 month timeframe, and only at the Poly, then would your description change? Isn't the use of his timeshare, like the Plat Plus weeks for Marrriott's Ko Olina resort (for example) more valuable if used for that express reason? Doesn't the way Dave uses his membership mean it is more valuable to him? No matter the time value of money?


Well,  I said that I was only taking into consideration the time value of money, not home resort priority. Getting that home resort priority booking window is important to some buyers. Let's say Developer Dave really doesn't care about whether he can use his DVC during the years 2055-2065. (Maybe he doesn't have any kids, and expects to be in a nursing home by then.) He loves the Polynesian Resort,  and he wants to make sure he has "first crack" at the reservations there. Then, the question is whether priority access to the Polynesian Villas is worth paying an extra $85-or-so per point. Only Dave can answer that question for himself, but if he's going to pay that much for a timeshare, I hope he has deep pockets. $160 per point works out to $230,240 to buy enough points to book Christmas week in a 2-bedroom Polynesian Villas bungalow. (At that doesn't even give him a promise that Christmas week will be available. Disney points float 52 weeks of the year, so he'll be competing with all the other Polynesian Villas owners for desirable times.) 

Right now, Disney developer prices seem to be the highest in the entire timeshare industry. That is really saying something.  I love my DVC points, but I bought then at about $67 a point, not $160 a point.


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## JudyS

Rsauer3473 said:


> I'm not so sure about the math above.
> What if Dave buys at the Poly, keeps it a few years, then rents it out because he had a total knee replacement and he can't walk fast at WDW. But back in 2011 he had purchased some Disney stock at about $40 per share and sold today at over $103 which made him a bundle. Nevertheless, because of his tax bracket he loses some of the profit which he made up by participating in an entertainment sector hedge fund. By the way, did I tell you Dave's wife sought a divorce from Dave earlier because of his bad investments in Nokia? She really rolled him.
> Nevertheless, Reginald made out okay at SSR. He vacations there occasionally and usually keeps up with his MF's especially since his new partner in life Duane got a new job with CISCO. After Reg retires he expects his 401(k) to help him maintain his ownership in case he finds himself single again. 2054 is a long way off. By that time Aunt Betty will croak and leave him the rents on her condo in Boca.


LOL, that was funny!

But, I actually think you are making a good argument why timeshare purchasers should mostly consider the next 10 or so years when buying a timeshare, and mostly ignore what happens decades from now.  All DVC contracts have at least 27 years left, and some have as many as 50. But a lot can happen in the next few decades.  Maybe by 2065 Florida will have seceded from the U.S. and most of us won't be able to get a visa to visit there. Or it will all be below sea level. Or maybe the Disney company will have built a newer, better resort -- on the moon.

Admittedly, all of those are unlikely. But there are many things that are quite realistic that could lower the value of Disney timeshares within 50 years. Air travel could get more expensive or dangerous, or there could be a major economic downturn. Disney might hire a really incompetent CEO who turns WDW into mediocre theme parks like Disney's California Adventure. (I guess California Adventure has improved lately, but it was pretty bad the one time I went there. There were almost no rides that an entire family could enjoy together. That was the whole point of Disneyland in the first place!) And of course, Disney could decide to jack up MFs a lot. 

DVC timeshares are already very nice, so there isn't a lot of room for improvement. But, there are plenty of things that could go wrong in the next 50 years. So, DVC ownerships will probably be less desirable in a few decades than they are now. 

All of these are reasons why the right to use a DVC timeshare in 2065 should be valued at a lot less than the the right to use a DVC timeshare today.



Rsauer3473 said:


> This is just a way of saying that life sometimes gets in the way of math. We make decisions, some good, some bad. And usually not because of them pesky numbers. We bought DVC in 1993 and several contracts since. I've used it a lot, rented some, but never regretted it, especially the $57/ point initial buy. We're happy.


If people don't want to analyze the financial costs of buying a timeshare, they don't have to. If someone wants a sports car and doesn't want to consider how much more it costs than an economy car, that's fine, too. So, if someone loves the Polynesian resort and wants to own there instead of another DVC resort and can afford it, then buying there might be a great decision for them. But TUG is supposed to be an information source for timeshare consumers. We should be accurate and thorough when we do financial analyses here. 

A final thought. (And then hopefully I will be done with this thread. I'm sure if I am, many people will be relieved!) In the past, Disney was different from other timeshares. DVC spent relatively little on marketing, and had resale prices that were close to developer prices. There were sometimes even situations where existing owners could buy small points packages directly from Disney for less than the cost of buying resale. (I tried to buy a small Beach Club package directly from DVC, and so many other people were buying that I couldn't even get the salesman to return my calls!) I think the days of DVC resale prices being close to DVC developer prices are fast disappearing. Disney seems to be getting more and more like other timeshares in that they spend a lot on marketing and then pass that cost along to consumers. To try to convince buyers to purchase from them rather than resale, DVC also is following the trend of having perks that are available only if one purchases from the developer. (Fortunately, the specific developer perks offered by DVC are fairly worthless.) The spread between developer DVC prices and resale DVC prices keeps getting larger. DVC contracts purchased from the developer still retain their value far better than almost all other timeshares, but it is getting harder and harder to justify purchasing from Disney rather than resale.


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## rfc0001

JudyS said:


> Rfc0001, the way you are figuring annual cost is very different from how financial experts figure annual costs. Your analysis excludes the time value of money. In other words, your analysis assumes that $1 in a person's pocket today is worth the same as $1 (adjusted for inflation) in that person's pocket 50 years from now.
> 
> Financial experts agree that money in one's pocket today is more valuable than the same amount of money at some point in the future, even after adjusting for inflation. Even when inflation is very low (as it is now) billions of people worldwide are willing to pay interest (often very high interest) to borrow money. If there was no such thing as the time value of money, no one would be willing to pay interest on a loan.


I understand what you are saying. We don't disagree. Time value of money says the opportunity cost of spending that money on DVC is investing it at x%. So if you could earn 8% ROI on PVB, and 8% in the stock market, then it's a wash. *We agree.*

That said, I doubt most people buying DVC or any time share are going to put that 8% to work in the stock market if they didn't buy DVC. They'll probably go buy a car, or do something else with the money -- so that is their opportunity cost.

If you treat PVB as an investment, I agree it only returns 6% a year, which relative to any other investment, is a marginal one, at best. However, if you buy Poly to stay at Poly (which I did), it's real saving is over booking DVC direct, which if you are going to compare apples to apples, you have to do since the only way to ensure you can book what you want when you want at Poly is to book through Disney direct ($24/pt. after tax and typical 30% discount). At that annual value, Poly jumps up to 12% ROI (savings per year). Sure, SSR returns more if make the same assumptions, but SSR can only be used at 7 mos. to book other resorts, which at that point you could easily rent points for $13/pt. at which point your ROI on SSR is still only 12% -- a wash with Poly.

This is exactly what we do -- we own SSR resale to book most resorts. We own AUL resale to book AUL. We own PVB to book PVB. The value of those points is $13, $16, and $24 respectively (the cost we would have to pay to book the same accommodations). With those assumptions, DVC saves as around 12% annual ROI using a financial approach . Could I find an investment worth that much consistently for 40-50 years? Personally, no. FWIW, I don't own any stocks (including my 401K) -- I am extremely conservative -- I'm waiting for the next major market correction and will be pushing my 401K in as everyone else is pulling theirs out.

Even if I could find an investment that has a 12% ROI I still would prefer DVC since it provides me what I want when I want it (even more so that booking direct, which you can't control availability and discounts). You also get ancillary savings with DVC AP (annual pass renewal for the price of a ticket 7-day ticket), TiW, discounts, etc. It also gives me great flexibility in financially engineering the benefits and cash flow it provides. So, in my example, I can rent enough points to pay all my MFs (And the cost of those rented points) and the resulting points will cost me _nothing_ in cash flow for several weeks of vacation). I know that just eat into my ROI since it's more ROI in terms of savings to book the points than to rent the points, but I don't care who you are, _getting to stay 3 weeks a year in Disneyworld for free is pretty darn cool _



> Here's how the time value of money works in this particular situation. Let's say a purchaser (call him Developer Dave) buys a 200-point Polynesian Villas contract from the developer (Disney) at $160 a point, which is $32,000 total. That Polynesian Villas contract will be good until 2065 (at least I think it's 2065.) Another purchaser (call him Resale Reginald), buys a 200-point Saratoga Springs contract resale at $75 a point, which is $15,000 total. That Saratoga Springs contract will be good until 2054.


Just to clarify, Poly's last UY is 2064 (Dec UY of 2064 runs through Dec, 2065; so all UYs will expire by Jan 2066); SSR's last UY is 2052. So, PVB has 51 years left (if you bought presale) and SSR has 39 if you buy resale this year.


> Sure, Dave gets an extra 11 years on his contract compared to Reginald, but Dave doesn't get to start using those extra years until 2055. Yet, Dave has to come up with the extra $17,000 in purchase cost *now*. (Home resort booking priority also is important, plus Disney offers a few developer-only 'privileges' that are generally a poor value. But here, I'm focusing only on the time value of money.)


To provide a counter point, The majority of the price you pay is in MFs, which are paid as you go. The difference in upfront purchase price per point is small from $1.70 for OKW in 1991 to $3 now for Poly. You're just buying more points up front. So that 12% ROI (and benefit of vacation stays) is lasting you 12 years longer with PVB than SSR -- do you want/need 12 more year? That's an individual choice. If you don't want/need it, then SSR is your man.


> You and I agree that when valuing different DVC contracts, people should take into consideration all the factors, such as differing annual fees between different DVC resorts, and also the amount of years left on the right-to-use. Where we disagree is that I am also considering the time value of money, whereas you insist that the time value of money doesn't exist.


You misunderstand my perspective, or perhaps I was making a different point unrelated to this; however, I agree, nonetheless.





> You are entitled to value your DVC ownership anyway you want, but for other people who come to this board, especially those new to timeshare, it's important to point out all the costs of timeshare ownership. This includes the fact that coming up with thousands of dollars today is harder than coming up with thousands of dollars over a period of decades.


Agree people_ should _run the numbers and analyze the benefits and costs (and alternatives) _for them_. Clearly, when it comes to timeshares and Disney, people _do not_. I don't want to add fire to that flame. There are plenty of people who default on 9.99% mortgages with DVC (the new member rate). That said, I consider the folks at TUG a little more sophisticated (or if they are new, they soon will be) and therefore able to understand the long game on extremely expensive timeshares like DVC, which still can make sense if you understand what you are getting for what you bought.


Cdn Gal said:


> 8.99%??!!!!????  is this true??? That is a crazy percentage for an interest rate!!! Yes, I live in Canada, but my home owner line of credit is 3.35%. How can people afford 8.99%???


Yes! Keep in mind, it's not recommended -- if you are earning 12% ROI (best case -- compared to booking Poly direct) and paying 10% interest, clearly you aren't coming out ahead. Not that what I say has any bearing on what someone buying DVC direct thinks or does, but for the record, I do not recommend anyone use 10% financing to buy DVC. For short term financing to transfer to a 3% (after tax credit) HELOC, or pay off -- maybe.


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## mtm65

*Renting points?*

Thanks Cdn Grl, JudyS and rfc!  I appreciate your discussion.  We are new owners at HGVC (new to TS ownership) and are now considering a DVC purchase.  We are planning 3 visits over the next 10 years.  At least two of the visits will be family of approximately 10 people during the visit.

DVC is attractive because we can book the correct size (3 BD) at the property we want, when we want to go.  Which I don't think is likely using our HGVC points through RCI.

What I am struggling to fully grasp are the rental opportunities.  My thoughts are to buy a contract to cover the points for a 3 BD and rent any excess or unused points when we don't need the points.  Does this make sense?

Or am I better to buy a smaller contract and roll/borrow points into specific year for the 3 BD use just that specific year?

I'm leaning towards renting the points to others through David's service when we aren't going to use them.  What are the drawbacks to renting points to others?  It looks like I could easily cover my annual maintenance fees, is this correct?

Thanks,

M2


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## Myxdvz

mtm65 said:


> We are planning 3 visits over the next 10 years.  At least two of the visits will be family of approximately 10 people during the visit.


3 visits over the next 10 years? If this were me, I wouldn't buy, I would RENT.  If you rent from an owner at 11 months, you can get a 3 BR.

Obviously, the downside to this is that you are making a commitment for the family of 10 that far out, but even if it is your points, you'd need to book at your home resort window to guarantee a 3BR.  They might be gone by 7 months, depending on season.


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## rfc0001

mtm65 said:


> Thanks Cdn Grl, JudyS and rfc!  I appreciate your discussion.  We are new owners at HGVC (new to TS ownership) and are now considering a DVC purchase.  We are planning 3 visits over the next 10 years.  At least two of the visits will be family of approximately 10 people during the visit.
> 
> DVC is attractive because we can book the correct size (3 BD) at the property we want, when we want to go.  Which I don't think is likely using our HGVC points through RCI.
> 
> What I am struggling to fully grasp are the rental opportunities.  My thoughts are to buy a contract to cover the points for a 3 BD and rent any excess or unused points when we don't need the points.  Does this make sense?
> 
> Or am I better to buy a smaller contract and roll/borrow points into specific year for the 3 BD use just that specific year?
> 
> I'm leaning towards renting the points to others through David's service when we aren't going to use them.  What are the drawbacks to renting points to others?  It looks like I could easily cover my annual maintenance fees, is this correct?
> 
> Thanks,
> 
> M2


Congrats on your HGVC purchase!

I would buy 1/3 of what you need (see WDW Points Chart for comparative points/room descriptions), then bank previous year and borrow next year to get one weeks worth of points.  You can do this every 3 years, which fits your 3X in 10 year requirement.  Now is not the time to buy excess points IMO -- the resale market is at it's high, and like I say resale is still your best value, so I would not buy Poly (esp. if you don't plan to stay there -- which with a 3 bdrm. you won't be able to).  I'd wait until the economy goes down and buy cheap (e.g. I bought SSR <$60 2 years ago).  You can always, always  rent, which still saves you at least half over direct booking and requires no up front investment - always a good choice, and stalk the resales board in the mean time -- which is good fun!

BTW, discussing this topic more broadly, I recognize looking at DVC just from a cost/value perspective is a pretty narrow view, and looking at it from a ROI perspective is arguably the better way to look at such large purchases.  There are still a lot of variables that are going to vary from person to person, like what their savings is relative to (do _you _ currently rent points from brokers, distressed points from member, home-resort points from members @ 7-11 mos.), and resale costs vary by resort/contract, and financing assumptions obviously vary.  Just make sure you calculate all that before buying.  If it's a wash, it's probably not worth the added financial risk in owning for the flexibility of booking.  If it's a savings, you'll have to assess your own opportunity costs (if any) and decide the benefits of owning DVC are worth that investment.  _There's no one size fits all mathematical equation for this_, and I'll leave it at that (although it's fun to debate :ignore.


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## chriskre

There is something to be said for having control over your own reservations.
IMO renting from anyone makes that much riskier.  

The great points deal on red week could go bust and leave you high and dry.
What if they don't pay their MF's and fall behind on their payments and Disney cancels all their reservations, so many things can go wrong.

Maybe I'm just a control freak but I'd much rather make my own reservations, risk my own money and maybe be able to sell in the future for something.
But if I never get any money back because this is a RTU then so be it.

In the meantime I can't put a price on the peace about what for many is a very expensive vacation anyway.  Disney vacations are a big $ commitment.  
I still love playing the RCI game and will probably continue for the larger rooms since I don't own many DVC points, but for the way I vacation, lots of last minute spur of 
the moment trips and usually studios and 1 bedrooms, DVC is a great ownership.   

I have no doubt Poly will be difficult to book in early December which is one of my favorite times to be in Disney.  In the end, I just feel that I am worth the "investment".  
Obviously not everyone values themselves the same or just maybe I've just been sprinkled with too much pixie dust.  :hysterical:


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## rfc0001

chriskre said:


> There is something to be said for having control over your own reservations.
> IMO renting from anyone makes that much riskier.


This is true, and why most people buy timeshares.  It's not an investment.  It's a convenience to book where you want when you want.  It's also a way to control cash flow -- spend more up front and spend less later (in DVCs' case $0 later if you rent half your points)


> I have no doubt Poly will be difficult to book in early December which is one of my favorite times to be in Disney.  In the end, I just feel that I am worth the "investment".


I agree.  We are booking Poly week before Christmas -- couldn't stay at MK resort otherwise.  We're spending less points as well since we can fit in a Poly Studio vs. 1bdrm @ another resort. See you there! I'll buy you a Dole Whip 


> Obviously not everyone values themselves the same or just maybe I've just been sprinkled with too much pixie dust.  :hysterical:


One can never have too much Pixie dust


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## chriskre

rfc0001 said:


> We are booking Poly week before Christmas -- couldn't stay at MK resort otherwise.  We're spending less points as well since we can fit in a Poly Studio vs. 1bdrm @ another resort. See you there! I'll buy you a Dole Whip



I'm taking you up on that Dole Whip!  
But I want mine sprinkled with pixie dust.


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## Serina

Anyone reserve a Poly Villa or Bungalow yet?


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## djohn06

I'm very late to this party.  But I just wanted to clarify something's on DVC.  I own 3 DVC resorts and 3 non DVC resorts that have the highest standings in both II and RCI.  I also bought 3 of my DVC resorts towards the tail end of the great recession.  I say all that because, so much of what is spoken about investing in the stock market is truly hindsight.  The reason I chose DVC is because it wasn't the stock market and I needed a hedge against stocks.  In addition, DVC is one of the few timeshares I could purchase and rent to someone for 2 to 3x's what I pay in yearly Maint fees.  Someone mentioned renting via David's at $13 a point.  That is childs play (i.e. if you want quick money).  I can easily rent days during week 51 or 52 on redweek for $16 to $17 a point.  WDW resort is at its highest capacity and people don't want to pay the $24 pp cash rate, so I am still providing great savings.  Also, DVC is fully booked.  So finding an owner to rent for this specific timeframe is slim to none once Sept rolls around. During the months of October and November, I had 20+ inquiries about my BLT studio that I ended up renting for $16 pp.

Now, I am a BLT owner, but these points were booked using my HHI points that I bought for $44 pp.  I can easily sell for mid 50s these days after commission.  Not counting my initial $6600 buy in, that has since appreciated 25 percent (and i will fully recoup), I netted almost $1,500 pre tax on my $6,600 contract last year. For someone looking for income and not just cap appreciation, I would be hard pressed to find many investments that could do better.

Now, I know my timing was very fortunate, as HHI is currently selling in the 60's and is probably at its ceiling, but it's not a clear cut advantage to say investing in the stock market is guaranteed to be better for you.  I think the DOW did about a 14 percent avg the past 5 years.  I can gladly take my extra 6 percent and put it into what I enjoy ....... like more WDW tickets.

Personally, I sock away 25 percent of my income in my 401k and I'm at least 20 years from retirement.  I just get tired of all the stock recommendations that you are always going to do better, it's just not always true.


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## djohn06

JudyS said:


> I agree 100% with Brian's (BNoble's) analysis.
> 
> There's no requirement to analyze the finances of one's DVC purchase, but if one does, one should take all the factors into account. And when you do the full analysis, that $160 per point purchase price turns out to be *way* high. It's far more than 20% more than DVC used to cost, even after adjusting for inflation.
> 
> Also, buying DVC at $160 per point, renting it out, and getting a "100% return on investment" would require renting out each DVC point for about $165 ($160 purchase price plus $5 in annual dues.) It's hard to get even $15 a point when renting out DVC.
> 
> By the way, I was at Old Key West years back and started up a conversation with a passenger on the Disney bus. It turned out to be BNoble. And, we both live in Ann Arbor! It *is *a small world, after all.



Oh, and leave it up to the Wolverines to get overly tecky.   Just like that Buckeye offense, DVC is simple. You can make a nice yield by buying low resale and renting high during the most popular times of the year. 

I couldn't resist a jab to a few Wolverines.....

Last tip, 80 percent of the Buckeye offensive plays consist of just 5 plays.


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## rfc0001

Serina said:


> Anyone reserve a Poly Villa or Bungalow yet?


Yeah, it was wide open when it opened up for non-home reservations -- was able to swap out all my "home" reservations with non-home points as a result.  Only thing booked up currently is Easter week and weekends in October (for Studio standard/Lake _and_ Bungalows).


djohn06 said:


> I'm very late to this party.  But I just wanted to clarify something's on DVC.  I own 3 DVC resorts and 3 non DVC resorts that have the highest standings in both II and RCI.  I also bought 3 of my DVC resorts towards the tail end of the great recession.  I say all that because, so much of what is spoken about investing in the stock market is truly hindsight.  The reason I chose DVC is because it wasn't the stock market and I needed a hedge against stocks.  In addition, DVC is one of the few timeshares I could purchase and rent to someone for 2 to 3x's what I pay in yearly Maint fees.  Someone mentioned renting via David's at $13 a point.  That is childs play (i.e. if you want quick money).  I can easily rent days during week 51 or 52 on redweek for $16 to $17 a point.  WDW resort is at its highest capacity and people don't want to pay the $24 pp cash rate, so I am still providing great savings.  Also, DVC is fully booked.  So finding an owner to rent for this specific timeframe is slim to none once Sept rolls around. During the months of October and November, I had 20+ inquiries about my BLT studio that I ended up renting for $16 pp.
> 
> Now, I am a BLT owner, but these points were booked using my HHI points that I bought for $44 pp.  I can easily sell for mid 50s these days after commission.  Not counting my initial $6600 buy in, that has since appreciated 25 percent (and i will fully recoup), I netted almost $1,500 pre tax on my $6,600 contract last year. For someone looking for income and not just cap appreciation, I would be hard pressed to find many investments that could do better.
> 
> Now, I know my timing was very fortunate, as HHI is currently selling in the 60's and is probably at its ceiling, but it's not a clear cut advantage to say investing in the stock market is guaranteed to be better for you.  I think the DOW did about a 14 percent avg the past 5 years.  I can gladly take my extra 6 percent and put it into what I enjoy ....... like more WDW tickets.
> 
> Personally, I sock away 25 percent of my income in my 401k and I'm at least 20 years from retirement.  I just get tired of all the stock recommendations that you are always going to do better, it's just not always true.


I'm with you -- I'm up 20% on my DVC resale purchase even after sucking the benefit from them for nearly 3 years, and paying no MFs for the past 2 (after renting).  Those two facts aside, a 12% average ROI for 38-50 years consistently shall never an stock return meet.  Sure, I've made 100x that in 1 day in options trading, but lets see someone do that for 40-50 years consistently at any scale -- I think not -- and that's just considering it as an investment, let alone time to spend with family on vacation, which is it's real value.  Haters gonna hate -- while I'm gonna go to Disney 3 times a year for nothing out of pocket other than what I paid up front (which I could recoup and then some if I sold) :ignore:


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## djohn06

I see all the comparisons that people feel like they are guaranteed 10 to 12 percent yearly in the stock market.  That's pushing returns to the outer limit IMHO.  6 to 8 percent should be more like it for anyone over 40. The older a person gets the more conservative you should become as an investor.  So unless people are 28 and under, we should drop references to 12 percent avg stock returns.

The Dows 10 year avg is 7 percent and that's if you were all in with stocks.


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## rfc0001

djohn06 said:


> I see all the comparisons that people feel like they are guaranteed 10 to 12 percent yearly in the stock market.  That's pushing returns to the outer limit IMHO.  6 to 8 percent should be more like it for anyone over 40. The older a person gets the more conservative you should become as an investor.  So unless people are 28 and under, we should drop references to 12 percent avg stock returns.
> 
> The Dows 10 year avg is 7 percent and that's if you were all in with stocks.


Moxactly!  This is the problem with NPV calculations  -- you can _always_ assume a higher opportunity cost to "prove" to yourself the ROI is 0% and pat yourself on the back for being so smart to not invest in DVC.  I think this is double counting -- your ROI is your ROI.  It's obvious that this is relative to other investments.  So, if your ROI is 12%, it's implicitly relative to your other opportunities and up to the eye of the beholder to determine if 12% is good or bad.  However, by discounting your R in ROI by 12% you are assuming 12% is what you would realistically get for that money if you hadn't invested it in DVC -- a fools errand as you point out since 12% risk free consistently for 38 years is a pipe dream, and that assumes you actually would have invested that money in that 12% investment (which I'm sure anyone who didn't buy DVC posting here did, right?).  The other side of this equation is the R in ROI is extremely conservative if you are assuming Disney direct prices (which is where the R is derived) will simply be what they are today plus inflation.   The reality is Disney direct rates have far exceeded inflation, so your R in ROI will be much higher than a straight inflation adjustment (which is where my 12% is based) would indicate.  If I assumed the actually rate of increase of 2.5% above inflation my 12% becomes 14.5%, which no guaranteed return with low risk will get you consistently over 38 years -- not even close .  However, then people bandying about time value of money would have to admit they aren't as smart as they think they are so that's not going to happen--it's much easier to simply make ad hominem arguments that everything I just said must be wrong, since I didn't take into consideration the time value of money.


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## Beefnot

When I was at work the other day, my backathanapkin calcs in excel couldnt produce a DVC return higher than 7%, assuming straight line depreciation of SSR point cost and rental rate of $11 per point in current $.


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## rfc0001

Beefnot said:


> When I was at work the other day, my backathanapkin calcs in excel couldnt produce a DVC return higher than 7%, assuming straight line depreciation of SSR point cost and rental rate of $11 per point in current $.


I'm using my actuals -- SSR purchased mid-$50s, and $13 rental rate.  12% is what I calculated -- assuming value (R) in terms of what it would cost to rent not what it cost to book direct (much higher ROI then).  I'm also not assuming rental cost increases faster than MF costs, even though in reality, it should since DVC purchase cost has increased 2.5% per year above inflation, while MFs have only increased 1% per year above inflation -- making the return over time higher.

PVB direct or DVC resale (at current prices) is another story -- 6-8% sounds about right for both (again, not including assumption that rental rate will increase faster than MFs).


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## bnoble

> my backathanapkin calcs in excel couldnt produce a DVC return higher than 7%, assuming straight line depreciation of SSR point cost and rental rate of $11 per point in current $.


Given the current resale market, that's about right.  It's been some years since one could get SSR in the mid-50s.


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## frank808

Ah the good years.  A few years ago contracts with 2 years of free points were selling in the mid to low $40's.  After renting out the 2 years of free points at $10 point you had all in costs of about $31 a point at ssr.  This bought the price of points purchased to about 75 cents plus yearly maintenance fees.  I only purchased contracts that cost under $1 a point over the life of the contract.  Except for VGC which contracts were in the $80 range.  I can only wish for the gold old days of resale dvc.


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## mtm65

*If only!!*



frank808 said:


> Ah the good years.  A few years ago contracts with 2 years of free points were selling in the mid to low $40's.  After renting out the 2 years of free points at $10 point you had all in costs of about $31 a point at ssr.  This bought the price of points purchased to about 75 cents plus yearly maintenance fees.  I only purchased contracts that cost under $1 a point over the life of the contract.  Except for VGC which contracts were in the $80 range.  I can only wish for the gold old days of resale dvc.



I really wish I knew about DVC a few years ago.  It would have changed how we vacationed over the years   Hoping that buying in now is not the wrong time to buy!


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## Beefnot

mtm65 said:


> I really wish I knew about DVC a few years ago. It would have changed how we vacationed over the years  Hoping that buying in now is not the wrong time to buy!


 
If you're buying as an "investment" or hoping for price appreciation, now (and anytime) is certainly the wrong time to buy.  If you're buying with contentment at the fully loaded average nightly cost that those points get you, then now's a great time to buy.


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## mtm65

Beefnot said:


> If you're buying as an "investment" or hoping for price appreciation, now (and anytime) is certainly the wrong time to buy.  If you're buying with contentment at the fully loaded average nightly cost that those points get you, then now's a great time to buy.



Was hoping for both of course!  I will settle for only getting "the contentment" that the points will get us.


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## djohn06

Beefnot said:


> If you're buying as an "investment" or hoping for price appreciation, now (and anytime) is certainly the wrong time to buy.  If you're buying with contentment at the fully loaded average nightly cost that those points get you, then now's a great time to buy.



Agreed.  That ship has sailed.


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## rfc0001

djohn06 said:


> Agreed.  That ship has sailed.


Buy low sell high as the saying goes.  That said, we are in another stock market bubble...wait 2-3 years, and we'll be in another recession (did I mention I'm entirely in cash?)


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