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Thread: DVC - Recouping The Cost - An Individual Accounting

  1. #1
    Senior Member mgarbowski's Avatar
    Join Date
    Feb 2014

    DVC - Recouping The Cost - An Individual Accounting

    I've been keeping track of our DVC costs since we bought in 2011. A few years in, I started recording some assumed room costs/savings by checking a points rental calculator whenever I book our stays. With a spreadsheet, and a few assumptions, it's now easy to track and project when we hit our break even point. I thought my findings might be of interest so I'm going to post a complete summary.

    Upfront Costs
    We bought 200 points at BLT direct in 2011. The official price was $130/pt but there was a $15 per point incentive that lowered it to $115 for a buy-in of $23,000. We put the entire amount on a Disney Visa, in 3 separate charges over 2 weeks. Closing costs were $301. I'm also 98% certain we also received a $500 Visa gift card for a total upfront cost of $22,801.

    To date, we have paid $6,988 in dues. Assume an average increase for 2019 and it will soon be $8,196. Add that to the initial outlay and the total nominal cost, ignoring the time-value of money, is $30,996.

    Room Benefits
    I've been using the rental cost calculator here to estimate what I would have paid to stay in the same rooms without DVC membership. It's a compromise figure. I could rent points cheaper without a broker. I could also pay hotel rates plus tax to Disney for much more. In truth I would never have stayed in these rooms annually without DVC, and I figure this somewhat midrange figure is fair enough for my exercise. I had to guesstimate the imputed value of 2-3 early stays because I didn't start checking these point rental figures from the beginning.

    With those disclaimers, over the years we have stayed 35 nights (a mix of studios and 1-BRs) with a total imputed cost/value of $19,659. Add in next year's stay at Bay Lake (1BR, Lake View) and the totals are 41 nights for $23,909. The average nightly rate is $583 and ranges from a low of $248 per night for 2 nights at a studio at OKW on July 4 weekend in 2017, to $792 per night for a one-bedroom at Boardwalk overlooking Crescent Lake during Easter Week in 2015.

    Simple Net
    Ignoring time values, we will still be $7,087 away from recouping our initial outlay plus annual dues with room benefits in 2019 after 8 years. But we probably will turn positive in 2 more years after that in 2021.

    Accounting for Lost Interest/Earnings
    There are lots and lots of theories how to do this. Here is what I did. My interest rate is 3%. It's another compromise between the 0-1% you would have gotten in a bank the last decade, and the 5-8% you reasonably hope to get on a standard mix of investments. I started with my initial 2011 outlay, and carry that into 2012 plus the 3% I would have earned had I not spent it on DVC. To that I add the 2011 dues, and then subtract the imputed value of our 2012 stay. That becomes the new "principal," to which I apply 3%, add 2012 dues, subtract the value of the 2013 stay, and so on. In effect, I treat the DVC costs as a sort of loan that I made, for which I am repaid with room stays. The interest goes down every year as the "principal" amount decreases.
    The result of this is that the 2019 deficit/principal will be $10,143, so the assumed interest adds about $3,000 compared to the static nominal dollar model. Projecting out we will turn positive in 2023, just 2 years more than the static model that ignores time value. That is 12 years after the initial purchase.

    Additional Notes

    My semi-confident estimate, based on a review of current contract listings and sales, is that I could sell this contract now for enough to recoup our initial costs, plus some but certainly not most of our dues or imputed lost interest. It would mean that all our stays to date cost an average room rate of $200-250 a night out of pocket. That's a very rough estimate, but good enough for me and one I find satisfying.

    We have mostly made good use of our points. I think we twice let banked points expire, and one of those was a very small amount. But the other was the first year, when we used a relative's points to book half our 2012 vacation (irrelevant long story) so we did not really start getting a good return on our 2011 purchase until 2013. But even in the years we did not waste any points, we also could have been a bit more aggressive using them. I've started using more, and that will accelerate the value recovery.

    My actual dues paid largely track the published dues rate multiplied by our 200 points, excpt in 2012 we seem to have been undercharged by about $100. I don't know why, and cannot find a mistake in my math or my records. But at least it was in my favor. And I presume there is a good reason for it that I am just missing. I very much doubt Disney made a mistake like that in my favor. I take my dues paid direct from my online DVC membership. You can go back and check your entire history.

    These figures ignore dining discounts, gift store discounts, and annual pass discounts (and anything else I forgot). I've no reliable way to measure how much we have saved, (nor to account for the extent to which it caused us to spend more). Nor does this account for the fact that I paid the entire purchase price, and most annual dues, either with cash back credit cards or gift cards bought at a discount. All of these would lower or further offset our costs, including imputed lost interest, and make this financial analysis more favorable.

    Finally, the needless yet necessary disclaimer that your costs are not my costs, your stays are not my stays, my assumptions can be wrong, my math can be wrong (though I doubt that), and I'm not a financial professional and I'm not making predictions or giving advice about you, to you or for you.

    But for all that, as I said at the start, I think this might be useful or at least interesting for other owners or potential owners and hopefully worth the time it took me to write it up. Feel free to ask questions or share your own experience if you have kept similar records.
    2004 May Offsite,
    2008 Easter SSR, 2011 February SSR, 2012 February Jambo House/BLT, 2013 Easter BLT, 2014 Easter BWV, 2014 Christmas week CBR, 2015 Easter BWV, 2016 Feb Universal Portofino, 2017 February Poly, 2017 July OKW solo, 2017 Christmas week POFQ, 2018 P-week Wilderness Lodge

  2. #2
    Senior Member
    Join Date
    Oct 2012

  3. #3
    wishes he had a pink frolicing llama under his tagline George's Avatar
    Join Date
    Apr 2011
    Northfield, IL
    Thanks for sharing your numbers.

    I have 780 points spread out over three resorts (410 BLT, 200 Poly, 170 VGC), which is more than two of us need for twice-yearly WDW trips and a long weekend at DLR thrown in every year and a half or so. I tend to sell points to pay my annual dues, and paid an average of about $85pp for the BLT and VGC contracts when I started buying them in 2011; $150 for Poly. Going rates are at all-time highs now (VGC points are going for $200 and up!), and I could recoup, but for now the selling points and using the others (and iviting friends with us sometimes, getting larger units) is working for us now.

    Quiet, both of ya! You're gonna ruin Maw's birthday!

    Stupid Judy.

    But Sandy Plankton said...

  4. #4
    the jeweled acrobats only perform amazing stunts for him DopeyRunr's Avatar
    Join Date
    May 2011
    Upstate NY
    This is very interesting. We only have a single 110 point contract, purchased resale near the market bottom, so our initial outlay was comparably quite low. As a result the savings on three annual passes for our family, which we've purchased outright three times and renewed once, would be a more significant factor in calculating our breakeven, but less relevant in yours.
    Follow me on Twitter at: @DopeyRunr
    Blogging about running for fun at Disney and elsewhere with Team Shenanigans.

  5. #5
    Senior Member
    Join Date
    Aug 2011
    This is interesting.

    I've done my own calculations for us, which is what actually keeps talking me out of it, and found that it would be a 13 year payback for us, not far off your 12 years. I didn't take into account opportunity costs like you did. Not sure I want to add that in, the 13 year payback is making me scared to buy in, extending it out longer will almost guarantee I never do.

  6. #6
    Senior Member Strangeite's Avatar
    Join Date
    May 2013
    The Alpha Quadrant
    We bought in about the same time, maybe a little before but the dark secret that I don't really want to factor into financial equations is that we have visited WDW far more times than we would normally have because "we had the points."
    I am @GrtBigBeautiful on DizTwitter

  7. #7
    Senior Member
    Join Date
    Feb 2014
    Mark, I like your methodology. Most guestimates I seen over the years put the breaking point at about 10-12 years. This reasoned analysis confirms it for you, at least. Next time I get in the mood do do some Disney Math on a rainy day, I’ll run my numbers. Thanks for the step by step example.
    June 2004 ASMO; Dec 2005 POP; Feb 2007 POP; March 2011 POR; March 2014 POR; Feb 2015 BWV; Sept 2015 PVB; Jan 2016 AKV Jambo (kind of); Feb 2016 OKW; Sept 2016 PVB; Feb/March 2017 BWV/PVB; Aug/Sept 2017 BCV; Feb 2018 BLT/CCV


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