The cost of being a DVC member vs. Renting Points

[Jack Moramarco]

Hello everyone, I was hoping someone would be able to clarify a question for me because I’m very confused on how buying into DVC is worth it?

I just returned from staying in a 2 bedroom villa at the Boardwalk for 7 nights. March 5th - 12th. 301 points was needed for this type of accommodation for the 7 nights. I have a friend who’s children are older and they no longer travel to Disney anymore. It’s not the first time I’ve rented points from him. He usually charges me $10 per point and we have stayed in a studio at the Polynesian twice before. This time he rented me the 301 points for $2800. Which if you do the math is $9.30 per point From what I am understanding, Disney is charging $188 per point to buy into DVC. So, if I were to buy into DVC and become a member it would cost me in the neighborhood of $56,000 to purchase that amount of points!

How does that make sense to spend that amount of money when I can rent points for a fraction of the price? I have been going to Disney once a year for the past 10 years and have been renting for the past 3 or 4 yearly trips, so if I wanted to keep on this pace of going once a year for at least a week at a time wouldn’t it make sense to keep doing what I’m doing? I’m mean even the maintenance fees for 300 points would be almost half the cost of what my trip just cost.
I’ve been told that if you go every year, becoming a DVC member is something you should look into. I totally disagree!

So if anyone has an answer for me or can explain to me what I’m missing or not understanding, I greatly appreciate it. Thank you.

 

[MB_01]

Most people don’t have friends that will rent them points for $9.30. If you are going every year and that per point rate to rent is between 16 and 18 a point those lines will eventually cross and you’d have been better off buying in. Everyone’s situation is unique. If I had your deal I wouldn’t recommend buying in either.

 

[Jack Moramarco]

Most people don’t have friends that will rent them points for $9.30. If you are going every year and that per point rate to rent is between 16 and 18 a point those lines will eventually cross and you’d have been better off buying in. Everyone’s situation is unique. If I had your deal I wouldn’t recommend buying in either.

Ok, thank you. I thought so but I just wanted to ask. Thanks again!

 

[JETSDAD]

You're fortunate to have someone renting to you well under market value. You're getting points essentially at their cost, or below what your cost would be buying in today. If you were renting from a broker you would be nearly double what you are paying so the math changes quickly at that point.

 

[Great3]

Also, you are comparing renting from your friends at essentially their cost (buy-in / RTU years + MF's) to Direct Purchase price from Disney (therefore the math of course makes sense to keep doing what you are doing).

For most people here on Dis Boards, although there many that purchase direct from Disney since their didn't know the resale market existed or the time or wanted to purchase direct for whatever reasons, most first time purchasers are comparing rental at market rate of $16 - $19 per points to resale prices of about $100 / per points, the math works out quicker that recovery / money savings can be had after about 10 years of DVC ownership.

Great3

 

[Aussie RJ]

I wish I had a friend who would rent me points for $9.30. He is what we call a fair dinkum top bloke!

 

[DougEMG]

Do your friend a favour and tell him he is giving his points away and can do a lot better.

 

[quandrea]

Do your friend a favour and tell him he is giving his points away and can do a lot better.

This. I won’t rent below $20 Canadian, which is about $14.50 USD. Even to family.

 

[Matty B13]

I think you owe your friend a really nice gift! $10 point is almost their cost.

 

[Bing Showei]

I also have a friend who lets me use her points at cost. She’s called my wife.

 

[Bing Showei]

I’m very confused on how buying into DVC is worth it?

If you enjoy that warm fuzzy feeling of going back year after year on your buddy’s dirt cheap (provider subsidized) points and feeling like $2,800 for x days at PVB is a steal, that’s the reason people will buy at CCV for $188/points: 49 more years of that feeling.

The difference between you and that CCV owner is they are not the mercy of a friend deciding to stop that gravy train. Conversely, you are not contractually obligated to pay that yearly whether or not you lose your job or have some other life change.

Depending on your tolerance for risk/uncertainty, each side buys you a different kind of freedom.

 

[Brett Wyman]

Frequent renter. For perspective I paid 16 dollars a point in 2018 and 17 a point in 2019, with the exception of a few last minute sales.

 

[Katie L]

As has been mentioned, you are paying well under market. We paid $14 a point and rented points last year. We did this privately and she was amazing. We also had a medical issue that caused us to have to delay within the 30 day window. She could have said "I'm sorry there is nothing I can do." and she fulfilled her contractual obligations. She instead called DVC for us and was able to get holding waived etc and we had an amazing time six months later. I realized, for us, it would have been much less stressful to just own points. This is one of many factors that convinced us to put an offer in. Had I owned, I would have postponed before the 30 day window and been hunting to find the perfect time to go. It all worked out, but we were lucky to have such a kind owner willing to take tons of time with us to walk through the mess.

 

[skier_pete]

Yes, your friend is likely renting close to their cost. Maintenance fees at Boardwalk at like $7.12 per point, so they are only taking a small profit on those points probably to cover their original buy-in.

I always factor the value of points as being the buy-in cost divided by the # of years on the contract, plus the maintenance fees. So if you buy-in at Copper Creek at $188 per point, and you get 49 years - so you factor the buy-in cost as $3.84 / point. Then you have MF at Copper Creek of $7.43 - so the cost of 2019 points is $11.27. If you bought a used contract at say SSR for $110 a point with 35 years left it's just a little bit cheaper at $3.14 / pt buy-in + $6.41 MF so $9.55 per point. If you can rent points for $9.30 every year - then yes you are WAY better off just buying points and not worrying about the up front costs. Follow this link HERE to see recent values of resale points.

Basically - when you think about how much the buy-in will cost you short-term IMO if you have a source at under $13 a point and you don't care about long-term ownership, I would keep on renting.

 

[Frederic Civish]

You are also forgetting the fact that, with the Resale market you can probably sell it back and get all or almost all of your money back.

I purchased Poly at the then Direct Retail price (I already knew about the resale market, but I wanted a lot of Poly). It wasn't that long ago. I have purchased other contracts at BLT and AKV on the Resale market. I could turn around right now and probably sell them for what I paid, or even a bit more. I know there is nothing guaranteed, but I don't think there are very many people who have owned for a while, no matter how they bought it, who couldn't get their money back right now.

And that is AFTER using it for however many years. In other words, if you can buy and use it and then sell it and get all your money back, ALL YOU ARE PAYING FOR IS YEARLY MAINTENANCE FEES. So, you can get your Deluxe accommodations for around $7.50 a point. That means AKL for around $120 a night and a Poly Studio for around $160 a night. Those rooms rent out, cash, for four times as much. THAT is why you might want to buy DVC.

Now, I also know that 'Resale' prices are not guaranteed. There is no promise from anyone that you can get your value out of it. But, look at Boardwalk and Beach Club. They end in about 23 more years, but their price has shown no sign of weakness, yet. That means people have been able to use them for over 25 years, and could sell now and get better than their money back.

THAT is what I call a good deal.

 

[Katie L]

You are also forgetting the fact that, with the Resale market you can probably sell it back and get all or almost all of your money back.

I purchased Poly at the then Direct Retail price (I already knew about the resale market, but I wanted a lot of Poly). It wasn't that long ago. I have purchased other contracts at BLT and AKV on the Resale market. I could turn around right now and probably sell them for what I paid, or even a bit more. I know there is nothing guaranteed, but I don't think there are very many people who have owned for a while, no matter how they bought it, who couldn't get their money back right now.

And that is AFTER using it for however many years. In other words, if you can buy and use it and then sell it and get all your money back, ALL YOU ARE PAYING FOR IS YEARLY MAINTENANCE FEES. So, you can get your Deluxe accommodations for around $7.50 a point. That means AKL for around $120 a night and a Poly Studio for around $160 a night. Those rooms rent out, cash, for four times as much. THAT is why you might want to buy DVC.

Now, I also know that 'Resale' prices are not guaranteed. There is no promise from anyone that you can get your value out of it. But, look at Boardwalk and Beach Club. They end in about 23 more years, but their price has shown no sign of weakness, yet. That means people have been able to use them for over 25 years, and could sell now and get better than their money back.

THAT is what I call a good deal.

The history is good, but I think the future resort restrictions are trying too drive down resale value. I would never buy DVC on the thought that I can sell and come out ahead.