Perloo
Earning My Ears
- Joined
- Mar 18, 2020
Would love to get some other eyeballs on this. Have been considering DVC for awhile and doing some math on direct at RR. Understand the resale restrictions, and understand there are much cheaper ways to get in on the resale market. Can tweak the math accordingly if we end up going resale, but figured I'd start here for my analysis. Wouldn't do anything for a couple months to see what happens post-corona.
Comparing two scenarios: either 1) buying DVC, even though we don't go as frequently as many on these boards, and renting out points whenever we can't effectively bank them, vs. 2) renting points through a broker every time we do go. In both scenarios, the frequency and point cost of our visits is the same. I then take the dollars spent in each scenario and assume that, instead of spending them on Disney, I invest them, in order to see which option is "costing" me the most in potential investment gains. (No, I would probably not have the discipline to do this in real life, but I wanted to compare apples-to-apples.)
Scenario 1: Buying 175 points @ $195pp, $5 closing, $8 MF, with MF inflating 3%/yr. Renting unused points @ $14.50pp, also inflating 3%/yr.
Scenario 2: Renting @ $20pp, inflating 3%/yr.
In both scenarios, any invested dollars appreciate 5%/yr. Obviously this analysis is not sensitized for a coronavirus-impacted 2020.
What is surprising to me is that I have found DVC to be more cost-effective in all the different cases I'm running - varying the frequency and timing of trips - including when I drastically reduce the # of visits over a 50yr period (like, even getting down to 3 or 4 visits across all 50 years). And I realized that, given my assumptions, I start with a $6.50 spread between renting unused points and the MF, both inflating at the same rate. That, plus just a couple trips where I'm renting points @ $70 or $80pp in the last 10 years of the analysis, turns DVC into a winner.
So, very curious for feedback:
1. Is there something off in my analyis logic?
2. Is there something materially off in my assumptions?
Ultimately, I'm surprised that DVC can appear to still be cost-effective vs. just renting points when I only project 3-4 trips over a 50yr period.
Comparing two scenarios: either 1) buying DVC, even though we don't go as frequently as many on these boards, and renting out points whenever we can't effectively bank them, vs. 2) renting points through a broker every time we do go. In both scenarios, the frequency and point cost of our visits is the same. I then take the dollars spent in each scenario and assume that, instead of spending them on Disney, I invest them, in order to see which option is "costing" me the most in potential investment gains. (No, I would probably not have the discipline to do this in real life, but I wanted to compare apples-to-apples.)
Scenario 1: Buying 175 points @ $195pp, $5 closing, $8 MF, with MF inflating 3%/yr. Renting unused points @ $14.50pp, also inflating 3%/yr.
Scenario 2: Renting @ $20pp, inflating 3%/yr.
In both scenarios, any invested dollars appreciate 5%/yr. Obviously this analysis is not sensitized for a coronavirus-impacted 2020.
What is surprising to me is that I have found DVC to be more cost-effective in all the different cases I'm running - varying the frequency and timing of trips - including when I drastically reduce the # of visits over a 50yr period (like, even getting down to 3 or 4 visits across all 50 years). And I realized that, given my assumptions, I start with a $6.50 spread between renting unused points and the MF, both inflating at the same rate. That, plus just a couple trips where I'm renting points @ $70 or $80pp in the last 10 years of the analysis, turns DVC into a winner.
So, very curious for feedback:
1. Is there something off in my analyis logic?
2. Is there something materially off in my assumptions?
Ultimately, I'm surprised that DVC can appear to still be cost-effective vs. just renting points when I only project 3-4 trips over a 50yr period.