Article on timeshares

[cobbler]

This was in my newspaper today and Disney was mentioned in it.

Click HERE to read it.

There was also some basic math printed in my newspaper, which I don't seem to find here, showing if the timeshares save you money if you invested it instead and so on.

I will make another post in this thread showing the math for those curious

 

[cobbler]

Ok, here is the math for SSR. They also show it for Marriott's Grande Vista, Hilton Grand Vacations Club, and Sheratons Vistana. If you want any of the others let me know and I will post it.

They say you need to buy 150 points minimum and they show the price per point at $101 and closing costs of $200 and annual maintenance fees at $618.

(Quote from the article)
"Our cost-efficiency formula is admittedly simplisitc: Take how much you would have made by investing the amount of the buy-in cost in a CD at 5 percent and put that toward the cost of renting the place in 2007: compare the end result with the annyal timeshare maintanence fees to decide whether the timeshare makes financial sense."

"Cost efficiency:" (Remember this is for SSR)
"Apply $768 CD investment earnings toward cost of booking 11 nights in a studio - $2204 through Travelocity ($3453 through Disney) - during low season (Sept 9-16) = $1436. Compare with the $597 in annual fees. Advantage: Timeshare by $839."

They assumed the 2006 MF of $3.98 for 150 points.

 

[Chuck S]

Interesting how many BBB complaints some of the companies have had.

 

[dumbo71]

No offense to you but THEIR math is simply ridiculous.

Yes it works to some degree but you simply should not feel like you are saving money with a Timeshare.

That example of saving money the first year????? In order to "save" money you'd have to buy into DVC. That interest off of the CD used is fine. Difference is, the principle is still sitting in that CD. Timeshares sell for pennies on the dollar with resale. Granted DVC is an exception with ROFR but the older resorts will gradually start to fall in the coming years IMO.

Also, you could rent that studio for 10 dollars a point and the "savings" would be minimal. Their dues are too low also. I just got my statement for SSR, 350 points and it is $1448.56 or $4.14 per point give or take. They also don't take into account the rising dues. They should have used a stock market investment startegy also. Any 10 year avergae of the stock market has netted 8% ove rthat 10 years. At 8% the savings if you rented would be zilch. Add in the rising dues and you'd be behind. I'll work out the math and post using real numbers. Also at the end of the 50 year DVC term or now 46 that purchase is worth nothing. The CD or stock market money will still be there.

Thanks for the interesting article. I just find the math misleading.

 

[dumbo71]

Ok here is my estimates. 150 points at SSR. I didn't use the $101, quite frankly I haven't heard of anyone paying that. They usually have a promotion of some type. I'll use $94 pp a midpoint between the $87 referral price and the $101.

150 x $94 = $14,100 = $200 closing fee and you have $14,300.

Now taking that $14,300 investing it in the stock market at 8% you have $1144 to use each and every year.

Dues on those 150 points would be $621 give or take. Now $14,300 divided by 46 years of use gives you $310.87 per year cost of your points. Add those 2 together and you have $931.87 per year cost to the owner for those points. Keep in mind that will grow over time due to rising dues.

Now the investment would net you $1144 a year to use towards the week in a studio at DVC. Magic week at SSR would be 123 points. Premiere week would be 163. Lets just say every year you get a studio for a week using the higher point weeks during premier on alternating years thus using your full allotment of points. I'll use the 123 x $10 pp renting and you have a cost of $1230 per year. Your saving would be $1230 - $1144 = $86 in the first year and reducing each year with the increasing dues. A case can be made that renting price would increase but we simply haven't seen much of that. Someone is always there renting for that $10.

$86 a year savings and at the end of the 46 years it is worthless? Not much of a "deal" where I'm sitting.

I'm sure holes can be poked in this as well. I used a simplistic example like the paper did.

I love DVC as much as the next guy but I never considered it a cost savings plan. I spend far more at WDW now than I did before DVC. Buy becuase you can afford it and you love WDW and DVC not because it "saves" you money.

 

[lisaviolet]

This was in my newspaper today and Disney was mentioned in it.

Click HERE to read it.

There was also some basic math printed in my newspaper, which I don't seem to find here, showing if the timeshares save you money if you invested it instead and so on.

I will make another post in this thread showing the math for those curious

Great article Cobbler. Interesting to see all the costs. Thank you for posting it.

 

[dianeschlicht]

Interesting how many BBB complaints some of the companies have had.

I noticed that too! DVC only had 1.

 

[Dean]

Remember that DVC is a smaller company than most of the rest looked at. Generally the complaints in this area are related to sales tactics and promises, DVC GENERALLY stays aware from controversy in that area. While interesting, the article was really short on true information. It would have been FAR better had the writer explored the resales aspects to those resort systems and posted a comparison. While the difference are minimal for DVC, they are major for all the rest of the systems looked at.

 

[JMLBrats]

Ok here is my estimates. 150 points at SSR. I didn't use the $101, quite frankly I haven't heard of anyone paying that. They usually have a promotion of some type. I'll use $94 pp a midpoint between the $87 referral price and the $101.

150 x $94 = $14,100 = $200 closing fee and you have $14,300.

Now taking that $14,300 investing it in the stock market at 8% you have $1144 to use each and every year.

Dues on those 150 points would be $621 give or take. Now $14,300 divided by 46 years of use gives you $310.87 per year cost of your points. Add those 2 together and you have $931.87 per year cost to the owner for those points. Keep in mind that will grow over time due to rising dues.

Now the investment would net you $1144 a year to use towards the week in a studio at DVC. Magic week at SSR would be 123 points. Premiere week would be 163. Lets just say every year you get a studio for a week using the higher point weeks during premier on alternating years thus using your full allotment of points. I'll use the 123 x $10 pp renting and you have a cost of $1230 per year. Your saving would be $1230 - $1144 = $86 in the first year and reducing each year with the increasing dues. A case can be made that renting price would increase but we simply haven't seen much of that. Someone is always there renting for that $10.

$86 a year savings and at the end of the 46 years it is worthless? Not much of a "deal" where I'm sitting.

I'm sure holes can be poked in this as well. I used a simplistic example like the paper did.

I love DVC as much as the next guy but I never considered it a cost savings plan. I spend far more at WDW now than I did before DVC. Buy becuase you can afford it and you love WDW and DVC not because it "saves" you money.

This is exactly true & DH and I said pretty much the same thing, but the reason we bought is simply that if you ever want to stay in any unit besides a studio it's suddenly way more expensive and of course there's the whole control issue or lack thereof when you rent. If it was just the 2 of us we probably wouldn't have purchased, but for family of 5 it makes perfect sense and is in fact a cost saving plan based on the type of units we want to stay in.

 

[dumbo71]

This is exactly true & DH and I said pretty much the same thing, but the reason we bought is simply that if you ever want to stay in any unit besides a studio it's suddenly way more expensive and of course there's the whole control issue or lack thereof when you rent. If it was just the 2 of us we probably wouldn't have purchased, but for family of 5 it makes perfect sense and is in fact a cost saving plan based on the type of units we want to stay in.

Thanks for backing me up.

I agree if you NEED or WANT more space Timeshares can be the way to go. It shouldn't be looked at as cost saving but simply the luxury of space. Is there a finer luxury than that extra room?

I strongly feel that studio is not what DVC is about. If all I wanted was a studio I'd stay at a moderate resort. DVC is one bedroom or larger. That is where rthe difference comes into play.

 

[paults]

http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20070107/LIFE/701070315/1005/LIFE

 

[JMLBrats]

Thanks for backing me up.

I agree if you NEED or WANT more space Timeshares can be the way to go. It shouldn't be looked at as cost saving but simply the luxury of space. Is there a finer luxury than that extra room?

I strongly feel that studio is not what DVC is about. If all I wanted was a studio I'd stay at a moderate resort. DVC is one bedroom or larger. That is where rthe difference comes into play.

No prob, dumbo71-I agree w/what you just said here too.