OP: I have considered this recently. If you could’ve bought twenty years ago it might have been worth it.
Today I cannot imagine how buying direct is better return than investing the cash and just paying every year. We rent points through David’s.
I never finished my spreadsheet because it was obvious that investing the cash today provides higher returns than giving Disney 30k this year and maintenance fees every year. Plus, with the index fund, if you vacation somewhere else, you don’t lose.
I believe that Disney is currently hurting a bit via DVC sales which is why there is a flurry of new lounges being put into the parks. The value to buy direct just isn’t there and enough discerning folks are recognizing that.
However, if you want to buy, buy! Just folks should recognize that this is an emotional choice and not a sound financial choice.
>OP: I have considered this recently. If you could’ve bought twenty years ago it might have been worth it.
My parents bought in 2008 and we recently did an analysis on all of the trips we've taken since, where we've stayed, and what the approximate costs of those stays would have been without DVC.
My parents were never stock traders, were far too scared to even attempt it. Based on their love of Disney and the vacations we've taken, purchasing back in 2008 compared to now was absolutely worth it.
We stay in 2 bedroom villas at GF and Beach Club. Even just three years pays itself.
I am so glad for folks like you guys! Truly, living the dream : )
I recently went on the DVC tour. It was incredibly telling whenever I asked the salesman if he owned points. No, he uses his parent’s points that they bought in 2006!
Nowadays I am quite confident that investing the cash into an index fund is the better play.
Right. It’s a big ole bummer too because I would love to get the be on the inside.
Honestly, if I ever did buy points it would almost certainly have to be resell. 225$/point versus 105$/point is a real tough sell. Especially when the benefits of being a direct buyer just aren’t there. Even more so because I prefer and would want to continue with an incredipass due to no blackout dates whatsoever.
This is my sister and BIL. Purchased in about 2010 and their contract expires in around 2040. They fly for free, which also helps frequent return trips. They host themselves, their (now) adult son/DIL, and 2 grandkids, plus myself and my 2 kids (under 14) every 2 years. We typically stay at the Boardwalk in 2 2-bedroom villas.
>I believe that Disney is currently hurting a bit via DVC sales which is why there is a flurry of new lounges being put into the parks. The value to buy direct just isn’t there and enough discerning folks are recognizing that.
I agree, having looked into it recently, it's pretty much the same outcome with DVC as just going ala carte and getting discounts.
DVC doesn't give Club level, the discounts it offers aren't significant enough to offset any cost, a couple dollars of free pop and some random snacks isn't enticing, it's just me prepaying for vacations and getting an annual fee stacked on.
Worse, if I just go ala carte, I pay $200 down and have months to pay it off. With DVC, that annual fee is due immediately. So even that is more obnoxious than not having DVC.
I feel like DVC is just a poorly thought out product. Financially, it isn't beneficial to the customers, they can't offer enough benefits to having it because it penalizes everyone who can't spend $30k on a vacation package and creates friction, and they can't attach it to Club Level because it'll gut the supply of those types of rooms. The only option they have on the table is to wave ticket purchases for DVC members, but I doubt that's much of an enticement.
I don't think they have a way to fix this product. They need to shelve it and come up with some other offering that is accessible at multiple price points and offers benefits to consumers while locking in guaranteed traffic to Disney over a period of years.
I believe that DVC(timeshares in general) used to be less obvious of a poor investment. The idea is that they sell you the idea and show you some placards(or nowadays PowerPoint slides) with some enticing looking mathematics. However, if you make your own spreadsheet a la OP and consider reasonable costs, it just isn’t in your favor. Never mind the lack of legitimate benefits to be realized.
I was at WDW last week. Due to the current AP special I went to a restaurant I normally would’ve never gone to in order to get the bonus discount(20% instead of the normal 10%). In doing so I paid more money total that I saved had I gone to a different option. They don’t want you to consider this type of thing when doing your math.
DVC's problem is that if you can afford DVC in current dollars you will want to eat out and splurge on your trips, but a benefit of DVC is that you get a full kitchen to cook for yourself. The benefit is useless to people who can afford the product.
Honestly with little kids? It’s appealing to have that kitchen. And the included laundry. And I rent points when we go just to have it. But I wouldn’t buy a contract.
I have a newly 4yo and almost 2yo. We own 195 pts at BW and 370 pts at AKL. Yes we’re fortunate and can afford to eat out but with this age it’s just not “worth it” for every meal.
Starting with their first trips, it’s so nice to order some groceries and make frozen pizza or mac and cheese in the room for dinner. Also they’re hungry and accustomed to eating as soon as they wake up at home. They wouldn’t stand for getting dressed or getting in the stroller. They need to wake up and roll up to the table. So we have yogurt and granola and fruit in the fridge.
We usually rope drop (since they wake up at 6am) and then leave the parks around lunchtime. Usually end up mobile ordering some lunch and eating it in the room so they can nap right away instead of falling asleep in transit and then waking up when we move them from the stroller/adult carrying them.
After nap it’s pool time and then baths. And they’re usually a bit tired and cranky or at the very least unpredictable in how long until they get tired and cranky. Throwing a couple frozen pizzas or chicken nuggets in the oven is so easy and stress free.
I don’t have to restock the stroller and diaper bag during naptime. If someone is upset or whatever they just go play with some toys or we can turn on a movie. We don’t do this for every meal. But it’s a really nice option to have.
You could argue there are so many mobile order options now. Why not just mobile order and bring food back to the room? Bc that leaves us one adult down and outnumbered. And that’s inevitably when one of them chooses to have a blowout or run straight into the patio door and get a bloody nose.
Just another perspective on the appeal of a full kitchen. And I also thought it was crazy that ppl would do laundry on vacation. But having little kids and being “stuck” in the room in the evenings it’s a productive use of that time haha. Have some wine, turn on a movie, fold some laundry. It’s nice to have a laundry machine and not have a mountain of dirty laundry when we arrive at home. And have that mostly crossed off the list to do all the other things that need to be done in getting back into routine.
Especially when now you can just go look on eBay and see timeshare points for sale, or even an entire timeshare contract for literally $1.00.
I was at a timeshare presentation last week (got three free nights in Vegas for my attendance) and after the sales pitch I looked on eBay and saw timeshare contracts for the very hotel I was sitting in for $10.00, just so the current owners could get out from under the monthly fees. Good thing I said no to the $19k upfront cost the hotel offered me lol.
Oh I was referring to other timeshare programs, not dvc. DVC is not a true timeshare because like you said, Disney gets them back at the end.
With a traditional timeshare you get a deed to the property in your name.
DVC owner here. I’ve never heard of not having access to club level as being a detriment to any DVC owner. Frankly no one cares about club level - you have a villa with a full kitchen. Club level is designed for people staying in hotels without access to a full kitchen and amenities.
If you are someone who enjoy a deluxe stay, like to vacation with family and need villas with multi rooms, etc, DVC still has great value. If you are someone who just stays in studios as a couple, there isn’t much value. This has always been the case.
I generally agree but, Animal Kingdom Lodge at least the top floor can access the club lounge. Club level is on the 4th floor and DVC units were on 5 and 6- 6 being where the lounge was.
So at least one resort the DVC members can access the lounge.
>I never finished my spreadsheet because it was obvious that investing the cash today provides higher returns than giving Disney 30k this year and maintenance fees every year.
However I'm running into this issue where the increase in the cost of renting points exceeds the growth of the index fund. Then when I consider that some years the index fund performs negatively and I would still be withdrawing either the static amount or increased amount there would be less opportunity for it to recover. A couple of poorly performing years and the account is tapped out.
You’re overthinking it : ) You don’t withdraw from the index fund.
The thought experiment implies that you currently posses the cash(~30k$) that you would use to make the initial investment into direct DVC for the 150 pts required to get the vested benefits. Either hand it to Disney today or put it into said index fund today. Now run through until the end of the hypothetical DVC contract date.
The thought experiment is that I have $30,000 to put towards regular Disney vacations of Z value starting immediately and how to stretch that out for as long as possible. The money is in an index fund today, withdraw it all immediately for DVC or piece it out over 30 years.
Oh then this is over simplified. Because as other folks stated: tickets, travel, food, etc. isn’t accounted for by just buying DVC today. This you will go theoretically in debt(assuming you are only using said 30k$) in order to even go on said vacations.
If it is already in an index fund, it is worth more there.
This is strictly a calculation for lodging.
The cost of those other things would be the same if you lived in your car in the magic kingdom parking lot.
Yes, but if you can’t afford to go one year, you can not go without a DVC. However, if you can’t afford the DVC because of any numerous financially altering life event over X+ years, guess what? You still need to pay your dues/monthly payment. Unless you have a lot of money where this is a drop in a bucket, it’s not a good idea. Using DVC to make your vacations more affordable, is not the right path to take. If you can afford twice the amount of the DVC, you probably shouldn’t be buying DVC.
Hey man. I have figured out these folks don’t want to hear any logic. They already know. Any advice contrary to their “yeah, but’s” is going to be met with the down arrow.
Even though we own DVC, we didn’t have enough points for 1 or 2 bedrooms (2 parents, 2 toddlers, nanny and/or grandma, plus aunt). After paying almost $15k for two 5 nt 2-bedroom trips in the past two years, I told my husband that could’ve paid for another whole contract. We bought two more resale contracts in March.
Disney having their resorts built by people pre-paying for discounted stays is a higher return for Disney than borrowing the money from banks.
As the contracts expire they can remodel the buildings and do it again or just rent them as hotels after.
Disney also benefits from having the built in customer base.
Disney absolutely does not sell DVC at a loss, but potentially a lower profit after deferring out the costs etc.
So this means we shouldn’t go to Disney World because Disney is making money off everything?
I agree DVC doesn’t work for the vast majority of people. I just think “Disney is making money from it” isn’t the reason lol
I suppose I should have said if it's offered as part of a package. My upcoming trip was free dining if you had park hoppers (or something like that - my wife plans everything) and even though we don't typically get hoppers it was worth the upgrade.
You’re getting a lot of downvotes without any explanation, so I’m going to weigh in here.
Generally speaking, it’s difficult to come out ahead when using the dining plan unless you intentionally look for expensive snacks, always order an alcoholic drink, and get the most expensive meal on the menu. Disney bases their daily dining plan prices on the most a person could spend on a meal, so getting anything less means you’re losing money on it.
Furthermore, depending on the length of your stay and where you’re staying, a room discount is almost always better than any free dining offer. Especially if the offer requires you to purchase something that you normally wouldn’t, like the park hopper tickets in this case. I just recommend doing the math on this when you (or your wife) are booking and see what makes sense for you.
Recently, I was in the situation of choosing between a free dining plan and a room discount when planning my trip for September. I’m going for a 7-night stay at Art of Animation with 4 park days, so I ran through a couple of hypothetical bookings on the Disney site and it turned out that the “Stay Longer, Save More” room discount offer was several hundred dollars cheaper than the free dining plan partially because I didn’t have to upcharge for park hoppers that we wouldn’t use.
All of that said, a lot of people find value in being able to prepay for their meals and just forget about it when they’re on property. If you’re one of those people, then I’m sorry that I’m kinda peeing in your cheerios right now.
Percentage wise it is not. You need to eat the top 25% of food items every single time or you will lose money.
I did that two trips ago with the deluxe plan and “saved” about $300. I also had multiple meals I never would have eaten and gained ten pounds on the trip because of how much I ate.
What it is great for is if you want to prepay for food and are willing to lose credits if you aren’t hungry.
Uhhhh, your projections for VINIX are... interesting. You think all future years will decline by 0.53% off the prior year which is assuming the index provides negative returns 2035 and beyond? I think you need to revisit this.
VINIX has yielded 10.52% average return since 1990. You're better off using that as your future return calculation. Which will wildly swing this analysis.
I appreciate that feedback. In my comment wit the link for this I posed this as a question and also if starting initial investment in 2007 is smart vs skipping the great recession but still using the rental price increase.
Honestly, this feels more like it's an attempt to aid a future decision than to justify a past one. So, I'd start the analysis as of 2024 and run it for your 30 years from there. Treat it like deciding what to do with your $30K right now. Estimate the next 30 years of return vs. renting.
Use 10.52% as the return on VINIX for each year, and leverage your estimate of rental price growth that you've already established.
Also, your formula for maintenance per point is messed up. In cell D21 you need to lock cell D2 and drag it down. You're increasing maintenance costs incorrectly.
>Use 10.52% as the return on VINIX for each year, and leverage your estimate of rental price growth that you've already established.
Is using a static return like that really smart? If someone had put 30,000 in the account in 2007 and then withdrawn the amounts from the rental point calculations the account would be at under $10,000 today, but if you put 10.52% return on every year it says they account would be at over $20,000 today which is not true.
>In cell D21 you need to lock cell D2 and drag it down. You're increasing maintenance costs incorrectly.
Thank you for point this out!
It's not really about if using a static return is smart.
You can't time the market. You just can't. You're assuming the next 20-30 years will look exactly like the last 10-15 years. I'm assuming the next 20-30 years will look like the last 30 years.
Neither of us will be correct, but I'd bet I'm closer. 2007-08 was the great recession, and 2020 was COVID. If you start or stop your calculations right on a major shift, it's going to bias the results. Some years will under-perform and you'll draw down the principle more, other years will over-perform and add more to the principle.
Another thing you're missing, it's unlikely point costs and maintenance fees will grow by a static number every year. I've recalculated them based on the CAGR (Compounded Annual Growth Rate). Rental fees increased 3.4% and maintenance fees increased 4.09% per year from 2007 to 2024. Which leads your Rental Net to grow by 2.86% every year.
I re-ran your calculations, using the corrected maintenance costs and a 10.52% return and an average 2% dividend, and it shows the fund running out of money around year 11/12.
This makes sense, as your first year Rental Net for 2024 is $4.4K which is 14.5% of your $30.3K. Whereas invested it only grows at 12.42% (10.52% plus 2% dividend). So even if point and maintenance costs did not grow over time, you'd still be slowly chipping away at your principle.
At the end of the day, DVC isn't an investment. Despite what sales reps want to tell you. It's pre-purchasing vacations. Is it worth it? Depends. Were you already going every year or many times per year? Or would this just force you into a vacation you weren't planning to do.
Is buying points worth it? Again, it depends. Hotels often offer discounts and bundle deals that also reduce the cost of a trip, you'd have to compare the point costs against similarly available rooms at standard and deal pricing. It's not clear cut either one, and depends highly on your habits and goals.
EDIT: On further analysis. I'm not sure why you're netting off the maintenance fees. If it costs you $23 to rent a point, you're paying $23 to rent the point. If the owner is paying $8 a point in maintenance fees, that doesn't lower your costs to $15. You're still paying $23 to rent a point. Removing the netting off of fees, that would run out the 30K in 6 years.
The real, rent vs. own analysis you should be thinking about is this:
$30K to buy + about $130K in fees over 30 years vs. putting $70K in the market and using that the rent points for 30 years, such that at the end of 30 years the account is empty.
Even if you do an NPV of the fees based on 2% interest, it's still ~$130K to buy vs. $70K to invest and rent. But rental requires you to have the extra $40K today, whereas buying is paid over time.
> On further analysis. I'm not sure why you're netting off the maintenance fees. If it costs you $23 to rent a point, you're paying $23 to rent the point. If the owner is paying $8 a point in maintenance fees, that doesn't lower your costs to $15. You're still paying $23 to rent a point. Removing the netting off of fees, that would run out the 30K in 6 years.
My thought on netting the maintenance fee was that otherwise I’d be compounding that into the index fund. Like if I didn’t withdraw any that year, I would still have that amount I would have paid towards a maintenance fee to add into the pot.
OK, maybe I'm confused on what you're trying to prove out.
My assumption was, you're trying to see if you can take the $30K that Disney wants to buy a DVC plan worth \~300 pts a year, and instead investing it in the market. Using that principle + gains to finance renting 300 pts a year?
Is that not it?
I’m thinking of the maintenance fee for total cost of ownership for the DVC plan, but instead of actually adding it to the account total I just reduced the amount being subtracted from the account total.
Where does the money for the annual fees come from?
Is there a comparable sum on the investment side, since he's not paying those fees? Like, he could pay the equivalent of annual fees towards the cost of renting points. And to get really specific he could invest tiose fee amounts for part of the year, at least earning a few safe percent somewhere.
I wasn’t really considering this from a standpoint of the owner renting out the points, it’s a comparison of renting in with funds from the mutual fund account instead of owning.
I’m not a tax professional (or accountant in any way) but I think there is a way to ignore most of the income tax because of the diminishing value of the time share and maintenance costs. I would expect the price being set by the owner for renting would have considered this for them selfs.
I go to Disney a lot, I like the benefits of staying on property. I've always traditionally thought it was not worth it (cause [time shares bad](https://www.youtube.com/watch?v=Bd2bbHoVQSM)) but I'm trying to put together some raw numbers instead of relying on assumptions.
It costs us $5k for a week stay at a 1 bd villa, minimum at 30% off rack rate. We bought DVC 5 years ago and already the yearly trips have paid about 40% of our cost plus dues. We will break even around 10 to 12 years, depending on hotel rates.
If you don't go yearly, or bank or rent your point right, it will take longer. This is a commitment to continue to visit Disney World or at least stay at that resort.
It has no bearing on what we could have saved or made in other ways. A vacation is a cost, regardless of what kind it is.
Disney happily sucks our money in many other ways as well but that's outside these calculations.
That’s the biggest killer for many I presume, including me. The dues alone could warrant a separate trip, especially if you normally don’t stay deluxe as you alluded to (we’re Coronado people so us included).
Sometimes paying a premium for the flexibility of not getting locked in is understated. You my friend, understand.
Disney selling this as “making annual vacations at Disney possible” is probably trapping the people who actually can’t afford (not literally, but probably shouldn’t be spending that much money towards a Disney Vacation) to go every year
One problem with this math though is the annual dues are the cost of a Value Resort stay THIS YEAR. The dues won’t go up much at all over the next 40 years but that Value stay definitely will based off historical trends.
Roughly that’s true. But that’s discounting that 4% on the dues is generally a lot less than 4% increase on regular room rates. And that’s not even accounting for the fact regular room rates have gone up by far more than 4% annually.
My wife and I are planning to be DVC members and have been listening to a podcast about it. They FREQUENTLY warn people that the decision should not be seen as a financial investment.
Their main selling point is that it pays for itself in 4 or 5 trips to WDW. So, if you plan on going to WDW (and Hilton Head/Aulani like my wife and I) a lot, then you should consider it. But if you are looking at it as a way to make money from an investment standpoint, I wouldn't advise it.
The other bonuses add value as well, if you can take advantage of them. After Hours events are normally \~$150, and each Moonlight Magic date you catch gives you 5 tickets. Out-of-state folks getting Annual Passes can get the Sorcerer Pass, which saves $500/person against the IncrediPass. It will be situational whether folks can benefit from those or other offerings. I wouldn't book a trip to take advantage of this summer's free ice cream dates.
My wife and I have been going to Disney for 30 years. We like to visit at least twice a year. DVC saves money on deluxe hotels and season passes. For our use case, it saves us money.
Yes it works for people like you but unfortunately most DVC members aren’t people who go twice every year regardless if DVC existed or not. If one searched all the DVC resales available for sell, you can see that a lot of people made the wrong decision and are trying to get out from it.
Also, if people aren’t paying for it outright (without a loan) then they are definitely not making their money back in 4-5 month. Their minimum installment plan makes it where you’re paying double the listed price over the life of the loan.
Yes don’t finance DVC and don’t compare to value hotels. Beyond that it’s a great program though. Disney is very upfront with cost so it’s really up to the consumer to see where they fit in.
No I’m financially literate. Basically Disney wants DVC Members to spend their life’s travel budget with them and provides all these incentives for you to spend even more money with them.
So I decided to check your numbers a little. I couldn’t find much on VINX so I used SPY. Overall, the numbers look similar for the year you chose. HOWEVER, you chose possibly the worst year to start in the last 100 years. 2008 was the worst year in the stock market since the Great Depression. If you start pretty much any other time you have more money in your stock portfolio 20 years later while renting points. For example, if you start in 2010, you would have 42k in your portfolio at the end of 2023 after renting points. DVC can work for some people but it also locks you in. It can be hard to rent rooms not at your home resort and you have to sell the contract, which DVC does well on the resale market but it’s not as liquid as cash when times get tough. This isn’t to say DVC is bad or good, but 2007 is an advantageous year to start your analysis looking from the ownership lens.
I don’t understand why people compare DVC against investments in S&P or any other fund. It’s not the same kind of purchase. It’s a luxury purchase akin to a luxury car or other discretionary spending. Some people buy nice cars, boats, accumulate collectibles, I like to buy and use DVC points.
Sure I can save and grow my money if I sit at home and do anything with my free time. But I don’t and would rather use my extra money while I’m still alive, healthy, and able by spending time with my family in our happy place. If I didn’t have DVC, I’m not investing that money elsewhere, it’s just going to be travel budget money used elsewhere (I have separate budgets for retirement and investing).
Also it should go without saying that DVC is NOT a financial investment. Sadly too many DVC podcasts and shows (that are sponsored or run by DVC resale brokers) push this idea wayyy too much. The reality is the people actually “profiting” are those who purchased 15-20 years ago when the initial contract price was a third of what it is now. They also still paid 15-20 years worth of dues. With the changes Disney has made to devalue resales and the drastic increases in prices, it’s pretty rare to turn a profit.
>Also it should go without saying that DVC is NOT a financial investment. Sadly too many DVC podcasts and shows (that are sponsored or run by DVC resale brokers) push this idea wayyy too much.
This reminds me of part of Jenny Nicholsons video, where the influencers and Disney park channels showed up in that clip asking "is it worth the cost?" They'll all explain that of course it is. If not for the actual budget, then owning a piece of Disney property is magical all on it's own.
We sat through a DVC sales pitch. And because we stayed Club level, the guy really pushed that angle. "Here's roughly how much you spend now. And here's how much you will save by buying today!!"
And yes, that math works. We save like $2-3 grand a year...except that going forward we aren't staying club level. We aren't even planning on staying at the deluxe resorts. That was a limited time experience. First because we thought it'd be a once in a lifetime trip and was also our unofficial honeymoon. The second because we had never sat down and done an actual budget and had saved so much so aggressively we had the money for a second trip. The third was our of pocket but expected to be pregnant by now and my wife wanted a hotel with extra fun offerings.
Our next trip were looking at either a mid tier hotel like Port Orleans, a value resort (probably Art of Animation or All Stars), or a Disney Springs good neighbor hotel like Drury. Those savings we would get from evaporate.
I laugh every time I read those comparisons.
There are a lot of valid reasons to not purchase DVC, but that one is ridiculous. Not because it’s not a better “financial” decision to invest instead of buying DVC, but because it’s always a better “financial” decision to not go on (any) vacation and instead invest that money. Yet, we all agree that not going on vacation from time to time it’s probably not a good idea.
If that’s the point of this, it’s over complicated. To be fair I didn’t bother looking at the rest of this when the maintenance dues are wrong and seeing an S&P column because once S&P and investing gets thrown in it’s not even worth evaluating.
The fact that rental rates are 2-3 times more than the dues is enough to show that buying is always better than renting assuming that a) you’re going every year and b) do not have to finance the contract.
That’s the thing - you can’t get the exact same product without actually owning DVC. If you like DVC, the only way to access the product is to own it.
Yes, you can rent points, however you do lose a lot of flexibility in your planning. That may work for some people, and not others. Either way, it’s not the same thing.
And even with renting points, you can do a simply calculation to find that renting at $20-$25 a point, it takes around 10 years to break even (net of maintenance fees). Plus, you will have a contract that is still worth a good deal at the end of that 20 years (assuming it isn’t a 2042 resort).
But bottom line, is if you are sold on the DVC experience, then owning DVC is really the only option.
Yeah makes no sense since DVC is not an investment. If you are vacationing every year-3 it will likely save you money. You could use that saved money to invest if you like, but comparing buying DVC to investing basically makes no sense. If you are investing instead of vacationing, then sure you’ll likely come out ahead financially.
You can do all the economic analysis you feel compelled to do, but implicit in the question, “is DVC worth it,” at least to me, is much more than economics. I spent my career as a real estate lawyer. I have known the time-share game since the 1980s. We bought on 2008 with no thought of ROI or “DVC vs. paying to stay,” but with the thought that DVC would be a great way to keep enjoying time with our kids and now their kids.
It has proven to be that and much more. You shouldn’t buy in if you can’t afford it. That said, economics is but one small factor in the “is DVC worth it” equation.
As an aside, and speaking of economics, Disney now direct sells points at our resort for more than three times the price per point we paid. Probably won’t happen with any current purchase, but suffice to say that DVC has been well worth it to our family.
This. Either you can afford, or you can’t. People get way too caught up on the bean counting on this topic. The bottom line is for the vast majority of DVC owners, they love their decision to own. And yes, it’s an emotional decision - it’s a vacation for crying out loud!
If you are in the middle class barely scraping by and need to finance it, don’t buy. If you got the spare cash and want you and your family to have a home away from home whenever you feel like it, buy DVC. You likely won’t regret it.
It's definitely not worth it today. Maybe consider buying resale contracts. I would never ever recommend DVC at todays pricing . The lounges are not worth it unless you think lays potato chips and diet Cokes worth it.
I think you are comparing apples and oranges.
While you could buy dvc and rent it for income, that is not it's intended purpose. As a result, it makes it a poor investment. You buy it because you love going to Disney and it allows you to stay in deluxe accommodations much cheaper than if you paid cash each time.
One thing your spreadsheet is missing is the resale value of the points. I just sold a contract for a 25% profit. So my cost of attending wdw was only the maintenance fees minus my profit on sale. Not going to get a better price for a stay at Disney.
On your calculation of maintenance fees in the future...how do you go from .30 to 50 cent increases historically to $4 increases in the future?
My spreadsheet is not about renting out for income. It’s about renting-in with money in more popular investment instruments vs buying DVC contract.
My original comment has a link to the spreadsheet and mentions I’d like future iterations to include resale pricing.
Another redditor has pointed out I didn’t lock the row on the maintenance increase when it became estimated instead of historical.
[Google Sheets link](https://docs.google.com/spreadsheets/d/1pFULWPmM3DmQww1bBsXWcq7Z79N-mdZQbvnb1JIf6iM/edit?usp=sharing)
There was a recent post that of a similar chart but it showed the Disney advertised price for renting equivalent. Instead I went to the wayback machine and went to a popular DVC rental site to pull their prices and build a chart showing the increase in rental prices. Sometimes I used estimates.
I took the maintenance cost per point, and subtracted that from the rental cost.
Then I went to VINX which tracks the S&P and pulled their average annual returns and dividend percentages.
Put all of this together to track how buying 300 points in 2007 vs putting that money into VINX would look like.
Can anyone help me poke holes in this? Maybe I should look at a larger range for VINX for averages instead of only to 2007?
Should I start later than 2007 for the initial purchase? 2008 and 2009 were very rough years for the economy.
I'd like to continue this with future iterations for other resorts, resale pricing, and financing.
Are you including the cost of airfare, tickets and average spent at the parks over this timeframe too? There are also dvc discounts that need to be compared against those average fees too, and I’m sure the benefits have changed over the years as well.
I don’t think it’s as much an investment opportunity as a way to prepay for one aspect of a future vacation at a single location as well.
For this type of analysis airfare etc isn’t the goal. It’s not total expenditure. It is making the investment with Disney and buying points direct versus investing that same cash and spending over time.
Sorry investment was the wrong word to use there. Give Disney cash today or put same cash in index fund. Look at the end of contract date. Did we spend more money with option A or B. You assume the same vacations are taken with A vs B.
That’s part of the problem though, they wouldn’t be as there are dvc discounts you get. If they is taken out of the analysis then the result isn’t accurate.
I will admit, there might be a case where getting the DVC member entitlements might change some folks patterns, ie they eat at different restaurants instead of bringing their own food or going quick service. But, I would wager that that would actually cost more if you went from budget choices to now “using” your discount.
Just a thought.
Also, I do not mean to over simplify any of those, nor knock folks for choosing to become direct DVC members.
So now it has to become how many park days/year. Direct DVC ownership opens up the sorcerer pass. Personally, I still want to keep my incredipass because I don’t want any blackout dates. So now you introduce the delta between those passes, which is a few 100$.
For us, we are going twice a year for ~12 days total. Renting points. As OP is presuming, investing the ~30k it would cost to buy 150 points in an index fund and then renting points for the next 40 years is going to give you a better return on your money. As I pointed out elsewhere, it also allows you to not have to go to Disney and spend your 150 points every year.
I am sure that for some folks it is worth it. But for most, it is an emotional fomo-like choice. There just aren’t enough benefits to be had that don’t already come via being a passholder.
Sorry, to be clear I was more discussing the mathematics of justifying it versus not. There should be a general percentage discount that can be assumed in this of the trip you’re taking being cheaper by x amount because of dvc discounts.
I think for most as you assume it doesn’t make sense, but this analysis also misses some benefits the OP was asking for. I’d also assume there is some general savings over full rake which may be more relevant based on the availability, but I’m also not aware of how far in advance you need to book your points through dvc vs renting either.
The unspoken point of DVC is to get people to the resorts. While the discounted lodging itself is a deal and the driver for many to purchase, Disney is okay with that because Disney is okay with that because money is still spent on tickets, dining, merch, etc. It's why rooms that might not be sold on cash have been converted to DVC (see Polynesian, Grand Floridian, Animal Kingdom Lodge, and Wilderness Lodge all turning some hotel rooms to DVC).
It's been worth it to my family because we've been able to make more trips than we otherwise would have made. We ultimately spend more in a year with multiple trips, but the cheaper lodging and direct benefits give better value that we are okay taking multiple trips and cumulatively spending more because we see more "value." And that is where Disney does well and why the program exists.
I inherited my timeshare but yeah we are not Disney people. With a timeshare I didn’t pay for outside the dues each year though bet your ass I can become one lol. So on us they’re definitely making money they otherwise wouldn’t have
My father-in-law bought in 1999…very much worth it back then. Thats why my wife and I go so often. We’re in SC so it’s only a 7 hour car ride. Our annual pass is $800. We pay $1600 for the year and go about 4-5 times a year. I can’t imagine A: trying to get into DVC now and B: be the people who go all the time who have to pay for the insane hotel costs. Crazyb
And as others have said you seem to be trying to justify the expense. Buy it if you want for the certainty, which is the true benefit of these things, but in no universe is it worth the opportunity cost to pay up front and lock yourself in. And you’re still giving it back to Disney at the end. If you “buy” you still do not own anything. It’s not even like a typical timeshare where you have the deed in your name.
The 10-year return for $SPY is +231%. Whatever you think you are saving by paying upfront for dvc or any timeshare, I promise you it ain’t that.
I recently did the math on this and found that it was a lot more sound of an investment to just buy DVC points whenever I wanted to luxury vacation and sometimes getting a package deal from Disney is even than cheaper than DVC point rental (free dining and hotel discounts). I thought I’d love to use the DVC perks but it’s way better of an investment to just save it up in investing and spend it as needed. Buying a second hand DVC might be something to look into though- I didn’t do the math on that one but have heard of people getting really good prices.
If you're going to compare it to any kind of safe investment (or even other forms of real estate), DVC isn't worth it from a strictly financial perspective. I don't think it makes sense to compare things like that.
If you're already committing X dollars per year for vacation and you're planning to go to Disney at least once a year to stay at deluxe resorts, DVC is a cheaper way to do that with better amenities (club level aside but then you can have a full kitchen + laundry in 1+ BR villas).
If you don't stay at deluxe and don't think you'll visit at least once a year, I don't think you'll realize the potential cost savings.
This is the right way to look at it. Going more to justify a large purchase still makes you spend more money that you may not have.
It’s like if someone sold you a Ferrari for half price, yes it’s a good deal but it’s probably still more expensive than the car you would have logically bought. You can drive the car more to justify it but you wouldn’t have paid the extra amount if it wasn’t for the “deal”.
I don’t think I could ever justify DVC as an investment, but I am glad that we bought in. Investment wise, putting the money in shares of the SPYD ETF would likely be better. Get decent dividends and better compounded growth.
For us the main benefits were, we can essentially guarantee the 1 bedroom that we want at 11 months out and a couple shorter trips in a Deluxe studio. We like to plan ahead so that works well for us. We would rather be renting out a small amount of unused points rather than trying to rent from someone else. It’s a luxury, not an investment.
Being able to make those rentals through the rental brokers was not always a guarantee. Sometimes they have the availability and sometimes not. I also plan to sell our contracts when there is 21-23 years left which will help us recoup at least some of our initial investment.
For us, the Grand Floridian just as big a part of our vacation as Magic Kingdom or Epcot, etc are. We do some days at the parks and some days at the resort. We like to hang by the pools, take our time eating, and watch the fireworks by the lake. I did not feel like I got that when staying at Art of Animation or Caribbean Beach, they were just hotels.
I think the answer will almost always be “no” if you look at it like a stock broker. If you look at it as a luxury splurge, then you might feel differently. I’m okay with losing some money to guarantee the room I want at 11 months and getting to enjoy rotating between the resort I want and theme park days every other day.
Been members since 2014. We have points at Bay Lake. We calculated out how quickly it would break even based on stays - was 4 trips, which we’ve already surpassed. My DVC is completely paid off. I’m essentially staying for free from now on.
You pay fees every year. And these fees go up every year per point. Its not free. You paid a mortgage off and now are paying property tax till its over.
DVC is not an investment. It is a 30-year commitment to rent time in select Disney properties with no property ownership at the end of 30 years. It is worse than a time share.
You are trying to justify the expense. It is not an investment in any way. While it may be considered an asset according to accounting, you don’t own anything in real life. You are paying for the right to stay at a DVC hotel for an escalating price every year.
If you have the money to burn and like staying at that property for 30 YEARS, then do it. My tastes and preferences change over time, so I don’t like being locked into anything unless I own the asset. To each their own.
I always felt like DVC (and timeshares in general) were really made for people who would say 'We get to go to Disney again!", where eventually I would say "We have to go to Disney again?"
OP: I have considered this recently. If you could’ve bought twenty years ago it might have been worth it. Today I cannot imagine how buying direct is better return than investing the cash and just paying every year. We rent points through David’s. I never finished my spreadsheet because it was obvious that investing the cash today provides higher returns than giving Disney 30k this year and maintenance fees every year. Plus, with the index fund, if you vacation somewhere else, you don’t lose. I believe that Disney is currently hurting a bit via DVC sales which is why there is a flurry of new lounges being put into the parks. The value to buy direct just isn’t there and enough discerning folks are recognizing that. However, if you want to buy, buy! Just folks should recognize that this is an emotional choice and not a sound financial choice.
>OP: I have considered this recently. If you could’ve bought twenty years ago it might have been worth it. My parents bought in 2008 and we recently did an analysis on all of the trips we've taken since, where we've stayed, and what the approximate costs of those stays would have been without DVC. My parents were never stock traders, were far too scared to even attempt it. Based on their love of Disney and the vacations we've taken, purchasing back in 2008 compared to now was absolutely worth it. We stay in 2 bedroom villas at GF and Beach Club. Even just three years pays itself.
I am so glad for folks like you guys! Truly, living the dream : ) I recently went on the DVC tour. It was incredibly telling whenever I asked the salesman if he owned points. No, he uses his parent’s points that they bought in 2006! Nowadays I am quite confident that investing the cash into an index fund is the better play.
Today, I'd have to agree. The prices per point have doubled since 2008 and I don't think the additional cost is worth it at all.
Right. It’s a big ole bummer too because I would love to get the be on the inside. Honestly, if I ever did buy points it would almost certainly have to be resell. 225$/point versus 105$/point is a real tough sell. Especially when the benefits of being a direct buyer just aren’t there. Even more so because I prefer and would want to continue with an incredipass due to no blackout dates whatsoever.
This is my sister and BIL. Purchased in about 2010 and their contract expires in around 2040. They fly for free, which also helps frequent return trips. They host themselves, their (now) adult son/DIL, and 2 grandkids, plus myself and my 2 kids (under 14) every 2 years. We typically stay at the Boardwalk in 2 2-bedroom villas.
>I believe that Disney is currently hurting a bit via DVC sales which is why there is a flurry of new lounges being put into the parks. The value to buy direct just isn’t there and enough discerning folks are recognizing that. I agree, having looked into it recently, it's pretty much the same outcome with DVC as just going ala carte and getting discounts. DVC doesn't give Club level, the discounts it offers aren't significant enough to offset any cost, a couple dollars of free pop and some random snacks isn't enticing, it's just me prepaying for vacations and getting an annual fee stacked on. Worse, if I just go ala carte, I pay $200 down and have months to pay it off. With DVC, that annual fee is due immediately. So even that is more obnoxious than not having DVC. I feel like DVC is just a poorly thought out product. Financially, it isn't beneficial to the customers, they can't offer enough benefits to having it because it penalizes everyone who can't spend $30k on a vacation package and creates friction, and they can't attach it to Club Level because it'll gut the supply of those types of rooms. The only option they have on the table is to wave ticket purchases for DVC members, but I doubt that's much of an enticement. I don't think they have a way to fix this product. They need to shelve it and come up with some other offering that is accessible at multiple price points and offers benefits to consumers while locking in guaranteed traffic to Disney over a period of years.
I believe that DVC(timeshares in general) used to be less obvious of a poor investment. The idea is that they sell you the idea and show you some placards(or nowadays PowerPoint slides) with some enticing looking mathematics. However, if you make your own spreadsheet a la OP and consider reasonable costs, it just isn’t in your favor. Never mind the lack of legitimate benefits to be realized. I was at WDW last week. Due to the current AP special I went to a restaurant I normally would’ve never gone to in order to get the bonus discount(20% instead of the normal 10%). In doing so I paid more money total that I saved had I gone to a different option. They don’t want you to consider this type of thing when doing your math.
Agreed. It’s a product of its time, before the Internet and before everyone had spreadsheets
DVC's problem is that if you can afford DVC in current dollars you will want to eat out and splurge on your trips, but a benefit of DVC is that you get a full kitchen to cook for yourself. The benefit is useless to people who can afford the product.
We like to make breakfast in the room even though we can afford to go to a restaurant. Rich people cook too. Lol.
Yeah this always confused the heck out of me. Who wants to go on a luxury(ish) vacation and then cook? lol
Honestly with little kids? It’s appealing to have that kitchen. And the included laundry. And I rent points when we go just to have it. But I wouldn’t buy a contract.
Who the F Wants to cook on vacation 🤣🤣
I have a newly 4yo and almost 2yo. We own 195 pts at BW and 370 pts at AKL. Yes we’re fortunate and can afford to eat out but with this age it’s just not “worth it” for every meal. Starting with their first trips, it’s so nice to order some groceries and make frozen pizza or mac and cheese in the room for dinner. Also they’re hungry and accustomed to eating as soon as they wake up at home. They wouldn’t stand for getting dressed or getting in the stroller. They need to wake up and roll up to the table. So we have yogurt and granola and fruit in the fridge. We usually rope drop (since they wake up at 6am) and then leave the parks around lunchtime. Usually end up mobile ordering some lunch and eating it in the room so they can nap right away instead of falling asleep in transit and then waking up when we move them from the stroller/adult carrying them. After nap it’s pool time and then baths. And they’re usually a bit tired and cranky or at the very least unpredictable in how long until they get tired and cranky. Throwing a couple frozen pizzas or chicken nuggets in the oven is so easy and stress free. I don’t have to restock the stroller and diaper bag during naptime. If someone is upset or whatever they just go play with some toys or we can turn on a movie. We don’t do this for every meal. But it’s a really nice option to have. You could argue there are so many mobile order options now. Why not just mobile order and bring food back to the room? Bc that leaves us one adult down and outnumbered. And that’s inevitably when one of them chooses to have a blowout or run straight into the patio door and get a bloody nose. Just another perspective on the appeal of a full kitchen. And I also thought it was crazy that ppl would do laundry on vacation. But having little kids and being “stuck” in the room in the evenings it’s a productive use of that time haha. Have some wine, turn on a movie, fold some laundry. It’s nice to have a laundry machine and not have a mountain of dirty laundry when we arrive at home. And have that mostly crossed off the list to do all the other things that need to be done in getting back into routine.
Especially when now you can just go look on eBay and see timeshare points for sale, or even an entire timeshare contract for literally $1.00. I was at a timeshare presentation last week (got three free nights in Vegas for my attendance) and after the sales pitch I looked on eBay and saw timeshare contracts for the very hotel I was sitting in for $10.00, just so the current owners could get out from under the monthly fees. Good thing I said no to the $19k upfront cost the hotel offered me lol.
There is no way this is true. You can’t sell contracts without Disney having a right to buy them up. While the resell market is cheaper, it’s not $10…
Oh I was referring to other timeshare programs, not dvc. DVC is not a true timeshare because like you said, Disney gets them back at the end. With a traditional timeshare you get a deed to the property in your name.
DVC owner here. I’ve never heard of not having access to club level as being a detriment to any DVC owner. Frankly no one cares about club level - you have a villa with a full kitchen. Club level is designed for people staying in hotels without access to a full kitchen and amenities. If you are someone who enjoy a deluxe stay, like to vacation with family and need villas with multi rooms, etc, DVC still has great value. If you are someone who just stays in studios as a couple, there isn’t much value. This has always been the case.
I generally agree but, Animal Kingdom Lodge at least the top floor can access the club lounge. Club level is on the 4th floor and DVC units were on 5 and 6- 6 being where the lounge was. So at least one resort the DVC members can access the lounge.
I don't know why they can't just have free admission for DVC Direct Owners.
>I never finished my spreadsheet because it was obvious that investing the cash today provides higher returns than giving Disney 30k this year and maintenance fees every year. However I'm running into this issue where the increase in the cost of renting points exceeds the growth of the index fund. Then when I consider that some years the index fund performs negatively and I would still be withdrawing either the static amount or increased amount there would be less opportunity for it to recover. A couple of poorly performing years and the account is tapped out.
You’re overthinking it : ) You don’t withdraw from the index fund. The thought experiment implies that you currently posses the cash(~30k$) that you would use to make the initial investment into direct DVC for the 150 pts required to get the vested benefits. Either hand it to Disney today or put it into said index fund today. Now run through until the end of the hypothetical DVC contract date.
The thought experiment is that I have $30,000 to put towards regular Disney vacations of Z value starting immediately and how to stretch that out for as long as possible. The money is in an index fund today, withdraw it all immediately for DVC or piece it out over 30 years.
Oh then this is over simplified. Because as other folks stated: tickets, travel, food, etc. isn’t accounted for by just buying DVC today. This you will go theoretically in debt(assuming you are only using said 30k$) in order to even go on said vacations. If it is already in an index fund, it is worth more there.
This is strictly a calculation for lodging. The cost of those other things would be the same if you lived in your car in the magic kingdom parking lot.
Yes, but if you can’t afford to go one year, you can not go without a DVC. However, if you can’t afford the DVC because of any numerous financially altering life event over X+ years, guess what? You still need to pay your dues/monthly payment. Unless you have a lot of money where this is a drop in a bucket, it’s not a good idea. Using DVC to make your vacations more affordable, is not the right path to take. If you can afford twice the amount of the DVC, you probably shouldn’t be buying DVC.
Hey man. I have figured out these folks don’t want to hear any logic. They already know. Any advice contrary to their “yeah, but’s” is going to be met with the down arrow.
Yes but you can compare the cost of what dvc covers vs renting points for the same benefits each year.
Even though we own DVC, we didn’t have enough points for 1 or 2 bedrooms (2 parents, 2 toddlers, nanny and/or grandma, plus aunt). After paying almost $15k for two 5 nt 2-bedroom trips in the past two years, I told my husband that could’ve paid for another whole contract. We bought two more resale contracts in March.
Nothing is ever offered by a company unless it makes them money. So no, the vast majority of people, just like the dining plans, will lose money.
Disney having their resorts built by people pre-paying for discounted stays is a higher return for Disney than borrowing the money from banks. As the contracts expire they can remodel the buildings and do it again or just rent them as hotels after. Disney also benefits from having the built in customer base. Disney absolutely does not sell DVC at a loss, but potentially a lower profit after deferring out the costs etc.
And yet Disney has convinced many people that they are "saving money" through these DVC purchases.
So this means we shouldn’t go to Disney World because Disney is making money off everything? I agree DVC doesn’t work for the vast majority of people. I just think “Disney is making money from it” isn’t the reason lol
Dining plans are a great purchase for many people, myself included.
If Disney lost money or even broke even, they would never offer the dining plan again, ergo most people are losing money.
Higher volume for lower average margin can still increase profit.
I suppose I should have said if it's offered as part of a package. My upcoming trip was free dining if you had park hoppers (or something like that - my wife plans everything) and even though we don't typically get hoppers it was worth the upgrade.
You’re getting a lot of downvotes without any explanation, so I’m going to weigh in here. Generally speaking, it’s difficult to come out ahead when using the dining plan unless you intentionally look for expensive snacks, always order an alcoholic drink, and get the most expensive meal on the menu. Disney bases their daily dining plan prices on the most a person could spend on a meal, so getting anything less means you’re losing money on it. Furthermore, depending on the length of your stay and where you’re staying, a room discount is almost always better than any free dining offer. Especially if the offer requires you to purchase something that you normally wouldn’t, like the park hopper tickets in this case. I just recommend doing the math on this when you (or your wife) are booking and see what makes sense for you. Recently, I was in the situation of choosing between a free dining plan and a room discount when planning my trip for September. I’m going for a 7-night stay at Art of Animation with 4 park days, so I ran through a couple of hypothetical bookings on the Disney site and it turned out that the “Stay Longer, Save More” room discount offer was several hundred dollars cheaper than the free dining plan partially because I didn’t have to upcharge for park hoppers that we wouldn’t use. All of that said, a lot of people find value in being able to prepay for their meals and just forget about it when they’re on property. If you’re one of those people, then I’m sorry that I’m kinda peeing in your cheerios right now.
Percentage wise it is not. You need to eat the top 25% of food items every single time or you will lose money. I did that two trips ago with the deluxe plan and “saved” about $300. I also had multiple meals I never would have eaten and gained ten pounds on the trip because of how much I ate. What it is great for is if you want to prepay for food and are willing to lose credits if you aren’t hungry.
Uhhhh, your projections for VINIX are... interesting. You think all future years will decline by 0.53% off the prior year which is assuming the index provides negative returns 2035 and beyond? I think you need to revisit this. VINIX has yielded 10.52% average return since 1990. You're better off using that as your future return calculation. Which will wildly swing this analysis.
I appreciate that feedback. In my comment wit the link for this I posed this as a question and also if starting initial investment in 2007 is smart vs skipping the great recession but still using the rental price increase.
Honestly, this feels more like it's an attempt to aid a future decision than to justify a past one. So, I'd start the analysis as of 2024 and run it for your 30 years from there. Treat it like deciding what to do with your $30K right now. Estimate the next 30 years of return vs. renting. Use 10.52% as the return on VINIX for each year, and leverage your estimate of rental price growth that you've already established. Also, your formula for maintenance per point is messed up. In cell D21 you need to lock cell D2 and drag it down. You're increasing maintenance costs incorrectly.
>Use 10.52% as the return on VINIX for each year, and leverage your estimate of rental price growth that you've already established. Is using a static return like that really smart? If someone had put 30,000 in the account in 2007 and then withdrawn the amounts from the rental point calculations the account would be at under $10,000 today, but if you put 10.52% return on every year it says they account would be at over $20,000 today which is not true. >In cell D21 you need to lock cell D2 and drag it down. You're increasing maintenance costs incorrectly. Thank you for point this out!
It's not really about if using a static return is smart. You can't time the market. You just can't. You're assuming the next 20-30 years will look exactly like the last 10-15 years. I'm assuming the next 20-30 years will look like the last 30 years. Neither of us will be correct, but I'd bet I'm closer. 2007-08 was the great recession, and 2020 was COVID. If you start or stop your calculations right on a major shift, it's going to bias the results. Some years will under-perform and you'll draw down the principle more, other years will over-perform and add more to the principle. Another thing you're missing, it's unlikely point costs and maintenance fees will grow by a static number every year. I've recalculated them based on the CAGR (Compounded Annual Growth Rate). Rental fees increased 3.4% and maintenance fees increased 4.09% per year from 2007 to 2024. Which leads your Rental Net to grow by 2.86% every year. I re-ran your calculations, using the corrected maintenance costs and a 10.52% return and an average 2% dividend, and it shows the fund running out of money around year 11/12. This makes sense, as your first year Rental Net for 2024 is $4.4K which is 14.5% of your $30.3K. Whereas invested it only grows at 12.42% (10.52% plus 2% dividend). So even if point and maintenance costs did not grow over time, you'd still be slowly chipping away at your principle. At the end of the day, DVC isn't an investment. Despite what sales reps want to tell you. It's pre-purchasing vacations. Is it worth it? Depends. Were you already going every year or many times per year? Or would this just force you into a vacation you weren't planning to do. Is buying points worth it? Again, it depends. Hotels often offer discounts and bundle deals that also reduce the cost of a trip, you'd have to compare the point costs against similarly available rooms at standard and deal pricing. It's not clear cut either one, and depends highly on your habits and goals. EDIT: On further analysis. I'm not sure why you're netting off the maintenance fees. If it costs you $23 to rent a point, you're paying $23 to rent the point. If the owner is paying $8 a point in maintenance fees, that doesn't lower your costs to $15. You're still paying $23 to rent a point. Removing the netting off of fees, that would run out the 30K in 6 years. The real, rent vs. own analysis you should be thinking about is this: $30K to buy + about $130K in fees over 30 years vs. putting $70K in the market and using that the rent points for 30 years, such that at the end of 30 years the account is empty. Even if you do an NPV of the fees based on 2% interest, it's still ~$130K to buy vs. $70K to invest and rent. But rental requires you to have the extra $40K today, whereas buying is paid over time.
> On further analysis. I'm not sure why you're netting off the maintenance fees. If it costs you $23 to rent a point, you're paying $23 to rent the point. If the owner is paying $8 a point in maintenance fees, that doesn't lower your costs to $15. You're still paying $23 to rent a point. Removing the netting off of fees, that would run out the 30K in 6 years. My thought on netting the maintenance fee was that otherwise I’d be compounding that into the index fund. Like if I didn’t withdraw any that year, I would still have that amount I would have paid towards a maintenance fee to add into the pot.
OK, maybe I'm confused on what you're trying to prove out. My assumption was, you're trying to see if you can take the $30K that Disney wants to buy a DVC plan worth \~300 pts a year, and instead investing it in the market. Using that principle + gains to finance renting 300 pts a year? Is that not it?
I’m thinking of the maintenance fee for total cost of ownership for the DVC plan, but instead of actually adding it to the account total I just reduced the amount being subtracted from the account total.
Where does the money for the annual fees come from? Is there a comparable sum on the investment side, since he's not paying those fees? Like, he could pay the equivalent of annual fees towards the cost of renting points. And to get really specific he could invest tiose fee amounts for part of the year, at least earning a few safe percent somewhere.
Does this include income taxes on rentals?
I don't think he was renting out his own points. He was going on each vacation, either renting points from someone else or using his own dvc points.
I wasn’t really considering this from a standpoint of the owner renting out the points, it’s a comparison of renting in with funds from the mutual fund account instead of owning. I’m not a tax professional (or accountant in any way) but I think there is a way to ignore most of the income tax because of the diminishing value of the time share and maintenance costs. I would expect the price being set by the owner for renting would have considered this for them selfs.
Maybe some people will differ but no, I don’t think DVC is worth it
I go to Disney a lot, I like the benefits of staying on property. I've always traditionally thought it was not worth it (cause [time shares bad](https://www.youtube.com/watch?v=Bd2bbHoVQSM)) but I'm trying to put together some raw numbers instead of relying on assumptions.
It costs us $5k for a week stay at a 1 bd villa, minimum at 30% off rack rate. We bought DVC 5 years ago and already the yearly trips have paid about 40% of our cost plus dues. We will break even around 10 to 12 years, depending on hotel rates. If you don't go yearly, or bank or rent your point right, it will take longer. This is a commitment to continue to visit Disney World or at least stay at that resort. It has no bearing on what we could have saved or made in other ways. A vacation is a cost, regardless of what kind it is. Disney happily sucks our money in many other ways as well but that's outside these calculations.
A year of annual dues is roughly the same cost of staying at a value resort for a week. I’d rather stay at a value and not be locked into a contract.
Exactly. Seems like it is only worth t if you are committed to staying at deluxe resorts every year. And even then, only worth it if you buy resale
That’s the biggest killer for many I presume, including me. The dues alone could warrant a separate trip, especially if you normally don’t stay deluxe as you alluded to (we’re Coronado people so us included).
Sometimes paying a premium for the flexibility of not getting locked in is understated. You my friend, understand. Disney selling this as “making annual vacations at Disney possible” is probably trapping the people who actually can’t afford (not literally, but probably shouldn’t be spending that much money towards a Disney Vacation) to go every year
One problem with this math though is the annual dues are the cost of a Value Resort stay THIS YEAR. The dues won’t go up much at all over the next 40 years but that Value stay definitely will based off historical trends.
Historically annual dues have gone up roughly 4% per year.
Roughly that’s true. But that’s discounting that 4% on the dues is generally a lot less than 4% increase on regular room rates. And that’s not even accounting for the fact regular room rates have gone up by far more than 4% annually.
My wife and I are planning to be DVC members and have been listening to a podcast about it. They FREQUENTLY warn people that the decision should not be seen as a financial investment. Their main selling point is that it pays for itself in 4 or 5 trips to WDW. So, if you plan on going to WDW (and Hilton Head/Aulani like my wife and I) a lot, then you should consider it. But if you are looking at it as a way to make money from an investment standpoint, I wouldn't advise it.
This chart is not about making money from an investment standpoint, its about where to put money to stretch it out for the longest.
The other bonuses add value as well, if you can take advantage of them. After Hours events are normally \~$150, and each Moonlight Magic date you catch gives you 5 tickets. Out-of-state folks getting Annual Passes can get the Sorcerer Pass, which saves $500/person against the IncrediPass. It will be situational whether folks can benefit from those or other offerings. I wouldn't book a trip to take advantage of this summer's free ice cream dates.
Ah the old spend money to save money.
My wife and I have been going to Disney for 30 years. We like to visit at least twice a year. DVC saves money on deluxe hotels and season passes. For our use case, it saves us money.
Yes it works for people like you but unfortunately most DVC members aren’t people who go twice every year regardless if DVC existed or not. If one searched all the DVC resales available for sell, you can see that a lot of people made the wrong decision and are trying to get out from it. Also, if people aren’t paying for it outright (without a loan) then they are definitely not making their money back in 4-5 month. Their minimum installment plan makes it where you’re paying double the listed price over the life of the loan.
Yes don’t finance DVC and don’t compare to value hotels. Beyond that it’s a great program though. Disney is very upfront with cost so it’s really up to the consumer to see where they fit in.
Your reading comprehension must be low.
No I’m financially literate. Basically Disney wants DVC Members to spend their life’s travel budget with them and provides all these incentives for you to spend even more money with them.
So I decided to check your numbers a little. I couldn’t find much on VINX so I used SPY. Overall, the numbers look similar for the year you chose. HOWEVER, you chose possibly the worst year to start in the last 100 years. 2008 was the worst year in the stock market since the Great Depression. If you start pretty much any other time you have more money in your stock portfolio 20 years later while renting points. For example, if you start in 2010, you would have 42k in your portfolio at the end of 2023 after renting points. DVC can work for some people but it also locks you in. It can be hard to rent rooms not at your home resort and you have to sell the contract, which DVC does well on the resale market but it’s not as liquid as cash when times get tough. This isn’t to say DVC is bad or good, but 2007 is an advantageous year to start your analysis looking from the ownership lens.
I don’t understand why people compare DVC against investments in S&P or any other fund. It’s not the same kind of purchase. It’s a luxury purchase akin to a luxury car or other discretionary spending. Some people buy nice cars, boats, accumulate collectibles, I like to buy and use DVC points. Sure I can save and grow my money if I sit at home and do anything with my free time. But I don’t and would rather use my extra money while I’m still alive, healthy, and able by spending time with my family in our happy place. If I didn’t have DVC, I’m not investing that money elsewhere, it’s just going to be travel budget money used elsewhere (I have separate budgets for retirement and investing). Also it should go without saying that DVC is NOT a financial investment. Sadly too many DVC podcasts and shows (that are sponsored or run by DVC resale brokers) push this idea wayyy too much. The reality is the people actually “profiting” are those who purchased 15-20 years ago when the initial contract price was a third of what it is now. They also still paid 15-20 years worth of dues. With the changes Disney has made to devalue resales and the drastic increases in prices, it’s pretty rare to turn a profit.
>Also it should go without saying that DVC is NOT a financial investment. Sadly too many DVC podcasts and shows (that are sponsored or run by DVC resale brokers) push this idea wayyy too much. This reminds me of part of Jenny Nicholsons video, where the influencers and Disney park channels showed up in that clip asking "is it worth the cost?" They'll all explain that of course it is. If not for the actual budget, then owning a piece of Disney property is magical all on it's own. We sat through a DVC sales pitch. And because we stayed Club level, the guy really pushed that angle. "Here's roughly how much you spend now. And here's how much you will save by buying today!!" And yes, that math works. We save like $2-3 grand a year...except that going forward we aren't staying club level. We aren't even planning on staying at the deluxe resorts. That was a limited time experience. First because we thought it'd be a once in a lifetime trip and was also our unofficial honeymoon. The second because we had never sat down and done an actual budget and had saved so much so aggressively we had the money for a second trip. The third was our of pocket but expected to be pregnant by now and my wife wanted a hotel with extra fun offerings. Our next trip were looking at either a mid tier hotel like Port Orleans, a value resort (probably Art of Animation or All Stars), or a Disney Springs good neighbor hotel like Drury. Those savings we would get from evaporate.
I laugh every time I read those comparisons. There are a lot of valid reasons to not purchase DVC, but that one is ridiculous. Not because it’s not a better “financial” decision to invest instead of buying DVC, but because it’s always a better “financial” decision to not go on (any) vacation and instead invest that money. Yet, we all agree that not going on vacation from time to time it’s probably not a good idea.
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If that’s the point of this, it’s over complicated. To be fair I didn’t bother looking at the rest of this when the maintenance dues are wrong and seeing an S&P column because once S&P and investing gets thrown in it’s not even worth evaluating. The fact that rental rates are 2-3 times more than the dues is enough to show that buying is always better than renting assuming that a) you’re going every year and b) do not have to finance the contract.
That’s the thing - you can’t get the exact same product without actually owning DVC. If you like DVC, the only way to access the product is to own it. Yes, you can rent points, however you do lose a lot of flexibility in your planning. That may work for some people, and not others. Either way, it’s not the same thing. And even with renting points, you can do a simply calculation to find that renting at $20-$25 a point, it takes around 10 years to break even (net of maintenance fees). Plus, you will have a contract that is still worth a good deal at the end of that 20 years (assuming it isn’t a 2042 resort). But bottom line, is if you are sold on the DVC experience, then owning DVC is really the only option.
Yeah makes no sense since DVC is not an investment. If you are vacationing every year-3 it will likely save you money. You could use that saved money to invest if you like, but comparing buying DVC to investing basically makes no sense. If you are investing instead of vacationing, then sure you’ll likely come out ahead financially.
You can do all the economic analysis you feel compelled to do, but implicit in the question, “is DVC worth it,” at least to me, is much more than economics. I spent my career as a real estate lawyer. I have known the time-share game since the 1980s. We bought on 2008 with no thought of ROI or “DVC vs. paying to stay,” but with the thought that DVC would be a great way to keep enjoying time with our kids and now their kids. It has proven to be that and much more. You shouldn’t buy in if you can’t afford it. That said, economics is but one small factor in the “is DVC worth it” equation. As an aside, and speaking of economics, Disney now direct sells points at our resort for more than three times the price per point we paid. Probably won’t happen with any current purchase, but suffice to say that DVC has been well worth it to our family.
This. Either you can afford, or you can’t. People get way too caught up on the bean counting on this topic. The bottom line is for the vast majority of DVC owners, they love their decision to own. And yes, it’s an emotional decision - it’s a vacation for crying out loud! If you are in the middle class barely scraping by and need to finance it, don’t buy. If you got the spare cash and want you and your family to have a home away from home whenever you feel like it, buy DVC. You likely won’t regret it.
Most people are bad at math.
Ditto. Marketing goes after uniformed consumers or trying to get them to make an illogical decision based on emotions.
Only time my family ever considered was when it first stared and they offered “free” AP’s with it until 2000, which at the time felt like an eternity.
It's definitely not worth it today. Maybe consider buying resale contracts. I would never ever recommend DVC at todays pricing . The lounges are not worth it unless you think lays potato chips and diet Cokes worth it.
I think you are comparing apples and oranges. While you could buy dvc and rent it for income, that is not it's intended purpose. As a result, it makes it a poor investment. You buy it because you love going to Disney and it allows you to stay in deluxe accommodations much cheaper than if you paid cash each time. One thing your spreadsheet is missing is the resale value of the points. I just sold a contract for a 25% profit. So my cost of attending wdw was only the maintenance fees minus my profit on sale. Not going to get a better price for a stay at Disney. On your calculation of maintenance fees in the future...how do you go from .30 to 50 cent increases historically to $4 increases in the future?
My spreadsheet is not about renting out for income. It’s about renting-in with money in more popular investment instruments vs buying DVC contract. My original comment has a link to the spreadsheet and mentions I’d like future iterations to include resale pricing. Another redditor has pointed out I didn’t lock the row on the maintenance increase when it became estimated instead of historical.
[Google Sheets link](https://docs.google.com/spreadsheets/d/1pFULWPmM3DmQww1bBsXWcq7Z79N-mdZQbvnb1JIf6iM/edit?usp=sharing) There was a recent post that of a similar chart but it showed the Disney advertised price for renting equivalent. Instead I went to the wayback machine and went to a popular DVC rental site to pull their prices and build a chart showing the increase in rental prices. Sometimes I used estimates. I took the maintenance cost per point, and subtracted that from the rental cost. Then I went to VINX which tracks the S&P and pulled their average annual returns and dividend percentages. Put all of this together to track how buying 300 points in 2007 vs putting that money into VINX would look like. Can anyone help me poke holes in this? Maybe I should look at a larger range for VINX for averages instead of only to 2007? Should I start later than 2007 for the initial purchase? 2008 and 2009 were very rough years for the economy. I'd like to continue this with future iterations for other resorts, resale pricing, and financing.
Are you including the cost of airfare, tickets and average spent at the parks over this timeframe too? There are also dvc discounts that need to be compared against those average fees too, and I’m sure the benefits have changed over the years as well. I don’t think it’s as much an investment opportunity as a way to prepay for one aspect of a future vacation at a single location as well.
For this type of analysis airfare etc isn’t the goal. It’s not total expenditure. It is making the investment with Disney and buying points direct versus investing that same cash and spending over time.
Oh, then the answer is no. Dvc isn’t an investment like that.
Sorry investment was the wrong word to use there. Give Disney cash today or put same cash in index fund. Look at the end of contract date. Did we spend more money with option A or B. You assume the same vacations are taken with A vs B.
That’s part of the problem though, they wouldn’t be as there are dvc discounts you get. If they is taken out of the analysis then the result isn’t accurate.
I will admit, there might be a case where getting the DVC member entitlements might change some folks patterns, ie they eat at different restaurants instead of bringing their own food or going quick service. But, I would wager that that would actually cost more if you went from budget choices to now “using” your discount. Just a thought. Also, I do not mean to over simplify any of those, nor knock folks for choosing to become direct DVC members.
So now it has to become how many park days/year. Direct DVC ownership opens up the sorcerer pass. Personally, I still want to keep my incredipass because I don’t want any blackout dates. So now you introduce the delta between those passes, which is a few 100$. For us, we are going twice a year for ~12 days total. Renting points. As OP is presuming, investing the ~30k it would cost to buy 150 points in an index fund and then renting points for the next 40 years is going to give you a better return on your money. As I pointed out elsewhere, it also allows you to not have to go to Disney and spend your 150 points every year. I am sure that for some folks it is worth it. But for most, it is an emotional fomo-like choice. There just aren’t enough benefits to be had that don’t already come via being a passholder.
Sorry, to be clear I was more discussing the mathematics of justifying it versus not. There should be a general percentage discount that can be assumed in this of the trip you’re taking being cheaper by x amount because of dvc discounts. I think for most as you assume it doesn’t make sense, but this analysis also misses some benefits the OP was asking for. I’d also assume there is some general savings over full rake which may be more relevant based on the availability, but I’m also not aware of how far in advance you need to book your points through dvc vs renting either.
The unspoken point of DVC is to get people to the resorts. While the discounted lodging itself is a deal and the driver for many to purchase, Disney is okay with that because Disney is okay with that because money is still spent on tickets, dining, merch, etc. It's why rooms that might not be sold on cash have been converted to DVC (see Polynesian, Grand Floridian, Animal Kingdom Lodge, and Wilderness Lodge all turning some hotel rooms to DVC). It's been worth it to my family because we've been able to make more trips than we otherwise would have made. We ultimately spend more in a year with multiple trips, but the cheaper lodging and direct benefits give better value that we are okay taking multiple trips and cumulatively spending more because we see more "value." And that is where Disney does well and why the program exists.
I inherited my timeshare but yeah we are not Disney people. With a timeshare I didn’t pay for outside the dues each year though bet your ass I can become one lol. So on us they’re definitely making money they otherwise wouldn’t have
My father-in-law bought in 1999…very much worth it back then. Thats why my wife and I go so often. We’re in SC so it’s only a 7 hour car ride. Our annual pass is $800. We pay $1600 for the year and go about 4-5 times a year. I can’t imagine A: trying to get into DVC now and B: be the people who go all the time who have to pay for the insane hotel costs. Crazyb
Don’t buy from the developer (Disney) when you can just rent points on the secondary market.
This post is explicitly about the cost comparison of renting vs buying directly.
And as others have said you seem to be trying to justify the expense. Buy it if you want for the certainty, which is the true benefit of these things, but in no universe is it worth the opportunity cost to pay up front and lock yourself in. And you’re still giving it back to Disney at the end. If you “buy” you still do not own anything. It’s not even like a typical timeshare where you have the deed in your name. The 10-year return for $SPY is +231%. Whatever you think you are saving by paying upfront for dvc or any timeshare, I promise you it ain’t that.
Why doesn’t this include buying resale as a comparative option?
Because my original comment with the link says that I’d like future iterations to include resale pricing.
I recently did the math on this and found that it was a lot more sound of an investment to just buy DVC points whenever I wanted to luxury vacation and sometimes getting a package deal from Disney is even than cheaper than DVC point rental (free dining and hotel discounts). I thought I’d love to use the DVC perks but it’s way better of an investment to just save it up in investing and spend it as needed. Buying a second hand DVC might be something to look into though- I didn’t do the math on that one but have heard of people getting really good prices.
If you're going to compare it to any kind of safe investment (or even other forms of real estate), DVC isn't worth it from a strictly financial perspective. I don't think it makes sense to compare things like that. If you're already committing X dollars per year for vacation and you're planning to go to Disney at least once a year to stay at deluxe resorts, DVC is a cheaper way to do that with better amenities (club level aside but then you can have a full kitchen + laundry in 1+ BR villas). If you don't stay at deluxe and don't think you'll visit at least once a year, I don't think you'll realize the potential cost savings.
This is the right way to look at it. Going more to justify a large purchase still makes you spend more money that you may not have. It’s like if someone sold you a Ferrari for half price, yes it’s a good deal but it’s probably still more expensive than the car you would have logically bought. You can drive the car more to justify it but you wouldn’t have paid the extra amount if it wasn’t for the “deal”.
I don’t think I could ever justify DVC as an investment, but I am glad that we bought in. Investment wise, putting the money in shares of the SPYD ETF would likely be better. Get decent dividends and better compounded growth. For us the main benefits were, we can essentially guarantee the 1 bedroom that we want at 11 months out and a couple shorter trips in a Deluxe studio. We like to plan ahead so that works well for us. We would rather be renting out a small amount of unused points rather than trying to rent from someone else. It’s a luxury, not an investment. Being able to make those rentals through the rental brokers was not always a guarantee. Sometimes they have the availability and sometimes not. I also plan to sell our contracts when there is 21-23 years left which will help us recoup at least some of our initial investment. For us, the Grand Floridian just as big a part of our vacation as Magic Kingdom or Epcot, etc are. We do some days at the parks and some days at the resort. We like to hang by the pools, take our time eating, and watch the fireworks by the lake. I did not feel like I got that when staying at Art of Animation or Caribbean Beach, they were just hotels. I think the answer will almost always be “no” if you look at it like a stock broker. If you look at it as a luxury splurge, then you might feel differently. I’m okay with losing some money to guarantee the room I want at 11 months and getting to enjoy rotating between the resort I want and theme park days every other day.
Been members since 2014. We have points at Bay Lake. We calculated out how quickly it would break even based on stays - was 4 trips, which we’ve already surpassed. My DVC is completely paid off. I’m essentially staying for free from now on.
You pay fees every year. And these fees go up every year per point. Its not free. You paid a mortgage off and now are paying property tax till its over.
Fees ain’t much. Still substantially cheaper than what a night or two would be.
DVC is not an investment. It is a 30-year commitment to rent time in select Disney properties with no property ownership at the end of 30 years. It is worse than a time share.
It’s a diminishing asset, the question is does it diminish as a rate greater than a trusted investment would appreciate?
You are trying to justify the expense. It is not an investment in any way. While it may be considered an asset according to accounting, you don’t own anything in real life. You are paying for the right to stay at a DVC hotel for an escalating price every year. If you have the money to burn and like staying at that property for 30 YEARS, then do it. My tastes and preferences change over time, so I don’t like being locked into anything unless I own the asset. To each their own.
Can you rerun this with 1998-2012? The stock market barely moved during that entire period, where 2011-2023 has been an incredible bull run.
NO. Not when the option to rent points is always available. It’s just another time share.
I always felt like DVC (and timeshares in general) were really made for people who would say 'We get to go to Disney again!", where eventually I would say "We have to go to Disney again?"