VGF worth the Money ? Why I think YES!!!

[Johnny D]

Is VGF worth the cost. This is how I figured it.

Bought 200 points at $150 a point. 30k plus $424 closing costs. Paid cash.

The following is a 10 year analysis.

I like going 2 x a year. This analysis is based on a October (F & W) and a early December trips in a standard view studio. Only way to stay there at those times is to own.

7 days early Dec. 125 pts Standard View
5 days early OCt. 85 pts. Standard View.

I want to stress, you will NEVER be able to stay at VGF studio, standard view, at the 7 month window at any time of the year except for a possible day or two once it sells out. Since I have bought, I have been tracking it. With 35% of the resort sold out, and 75% declared available for DVC, it still seems almost impossible at 7 months.

My DVC VGF was an add on so I received 2013 points (August UY) and banked my 200 2013 points (400 current points). If managed right over a 10 year period, we will be able to do those 12 days a VGF every year because of the 2013 banked points.

Now some assumptions. DVC resorts have usually hit the resale market at about 90% of there initial direct purchase price. I will use $145 (initially offered to DVC members for 1 month, I think?). So by the time there is any decent volume on the secondary market, I believe VGF will almost be sold out and buying direct will be $170.

The secondary market will be selling for about $130. So ok, I bought at $150 and could have waited another year or 1 1/2 yrs and saved $20 per point. However, I picked up 200 points from last year which I feel more than makes up for that $20, plus there are no restrictions. ( I know a lot of people don't see the value in using there points for cruises and the Disney collection and I agree, but still like the option) Also remember buying today gives you 50 years of points, buying next year gives you 49 and so on. So my conclusion, if you want to stay at VGF the value is there. Full 50 years on the contract, no restrictions, negligible price difference compared to secondary market if bought early, and still able to pick up 2013 UY points.

Now, if I don't own VGF and want to stay there what would it cost to pay cash. Well, I looked it up. Both staying at GF and VGF, at those times of the year, or really any time, the cost is crazy.

With tax, 5 days in October will cost around $3000 and 7 nights in early December around...get this...$5400 Total for 12 nights to stay there would be $8400 for 1 year based on the 2 times of the year I plan to travel. That's crazy expensive.

Finally I calculated the cost if I sold at 10 years.

I believe (assumptions but a conservative ones) that VGF will hold it's initial resale value around $130 point. I own at boardwalk, bought at $65 a point after incentives and is now selling for more. I am not counting on that.

200 pts. sold at 130 a point is $26000. I will have paid about 12K in maintenance fees (counting on about 2.5% MF increases), $424 closing costs and lets say 2k in commissions and closing costs selling. Total spent 44,424- 26,000 + = 18,424

Will have spent $18,424 for 120 nights at VGF = $153.53 a night at the VGF over the 10 years. I will take that!!!

As far as the time value of money goes, I used extremely conservative investments when I purchased; and I am not qualified to calculate the TVM on offsetting the 30k initially used to purchase, compared to the savings every year saved on rooms, dvc perks and annual passes for 10 years. The $ 153 a night to stay at VGF works for me. I would be interested in anyone's thoughts on this analysis or how they justified their purchase.

 

[chukdotcom]

Is VGF worth the cost. This is how I figured it.

Bought 200 points at $150 a point. 30k plus $424 closing costs. Paid cash.

The following is a 10 year analysis.

I like going 2 x a year. This analysis is based on a October (F & W) and a early December trips in a standard view studio. Only way to stay there at those times is to own.

7 days early Dec. 125 pts Standard View
5 days early OCt. 85 pts. Standard View.

I want to stress, you will NEVER be able to stay at VGF studio, standard view, at the 7 month window at any time of the year except for a possible day or two once it sells out. Since I have bought, I have been tracking it. With 35% of the resort sold out, and 75% declared available for DVC, it still seems almost impossible at 7 months.

My DVC VGF was an add on so I received 2013 points (August UY) and banked my 200 2013 points (400 current points). If managed right over a 10 year period, we will be able to do those 12 days a VGF every year because of the 2013 banked points.

Now some assumptions. DVC resorts have usually hit the resale market at about 90% of there initial direct purchase price. I will use $145 (initially offered to DVC members for 1 month, I think?). So by the time there is any decent volume on the secondary market, I believe VGF will almost be sold out and buying direct will be $170.

The secondary market will be selling for about $130. So ok, I bought at $150 and could have waited another year or 1 1/2 yrs and saved $20 per point. However, I picked up 200 points from last year which I feel more than makes up for that $20, plus there are no restrictions. ( I know a lot of people don't see the value in using there points for cruises and the Disney collection and I agree, but still like the option) Also remember buying today gives you 50 years of points, buying next year gives you 49 and so on. So my conclusion, if you want to stay at VGF the value is there. Full 50 years on the contract, no restrictions, negligible price difference compared to secondary market if bought early, and still able to pick up 2013 UY points.

Now, if I don't own VGF and want to stay there what would it cost to pay cash. Well, I looked it up. Both staying at GF and VGF, at those times of the year, or really any time, the cost is crazy.

With tax, 5 days in October will cost around $3000 and 7 nights in early December around...get this...$5400 Total for 12 nights to stay there would be $8400 for 1 year based on the 2 times of the year I plan to travel. That's crazy expensive.

Finally I calculated the cost if I sold at 10 years.

I believe (assumptions but a conservative ones) that VGF will hold it's initial resale value around $130 point. I own at boardwalk, bought at $65 a point after incentives and is now selling for more. I am not counting on that.

200 pts. sold at 130 a point is $26000. I will have paid about 12K in maintenance fees (counting on about 2.5% MF increases), $424 closing costs and lets say 2k in commissions and closing costs selling. Total spent 44,424- 26,000 + = 18,424

Will have spent $18,424 for 120 nights at VGF = $153.53 a night at the VGF over the 10 years. I will take that!!!

As far as the time value of money goes, I used extremely conservative investments when I purchased; and I am not qualified to calculate the TVM on offsetting the 30k initially used to purchase, compared to the savings every year saved on rooms, dvc perks and annual passes for 10 years. The $ 153 a night to stay at VGF works for me. I would be interested in anyone's thoughts on this analysis or how they justified their purchase.

I see 2 problems:

"I believe (assumptions but a conservative ones) that VGF will hold it's initial resale value around $130 point."

I disagree with this.

"Will have spent $18,424 for 120 nights at VGF = $153.53 a night at the VGF over the 10 years. I will take that!!!?"

That equation leaves out the single largest variable. TVM.

 

[Msmithmd]

DVC will absolutely save you money versus the discounted (est 35%) rate on deluxe hotel accommodations. If it didn't, there really wouldn't be much reason to buy.

As to whether your guesses on resale are accurate, nobody really knows. Sure, for the first couple years I agree. But even just a few years more, and you might be way off. BLT is only five years old. It is offered direct currently at $165 pp and sells resale for half of that. Will VGF hold it's purchase price better? Time will tell.

VGF is a fantastic resort. If you want to stay there consistently and envision yourself staying there year after year, then buying it is the correct decision for you.

There will always be cheaper options, both on and offsite. But I wouldn't get too concerned with how other people view a purchase that you have made for leisure. If it makes you happy, and obviously you have the money by paying cash, then good for you for the decision that you made.

 

[Belle091507]

I didn't see the calculation of dues in your equation - unless I missed it?

 

[BenDiscipio]

DVC will absolutely save you money versus the discounted (est 35%) rate on deluxe hotel accommodations. If it didn't, there really wouldn't be much reason to buy.

As to whether your guesses on resale are accurate, nobody really knows. Sure, for the first couple years I agree. But even just a few years more, and you might be way off. BLT is only five years old. It is offered direct currently at $165 pp and sells resale for half of that. Will VGF hold it's purchase price better? Time will tell.

VGF is a fantastic resort. If you want to stay there consistently and envision yourself staying there year after year, then buying it is the correct decision for you.

There will always be cheaper options, both on and offsite. But I wouldn't get too concerned with how other people view a purchase that you have made for leisure. If it makes you happy, and obviously you have the money by paying cash, then good for you for the decision that you made.

His contention was that it sold initially at $145...so it would settle at $130....BLT sold initially at 100 or thereabouts (I've read where some bought in the 90s with incentives) and is currently selling at or around 90-100....that seems to PROVE his point...BLT is holding value, regardless of what it is sold for now. The point seems to be that if you buy in early at lower rates, the price holds. Some have actually appreciated over the years...

Additionally, I find it difficult to believe that BLT is selling for $165 now direct. They are selling VGF at 155 right now I believe....

 

[Msmithmd]

Ben- agree with your thesis on BLT. The problem is that the VGF started out so much higher. For it to follow that same sort of price trend you would have to imply that VGF will be selling retail for $220-230 four years from now and I personally don't believe the market would bear that.

As to current BLT pricing, allow me to "make you a believer:"

http://www.dvcnews.com/index.php/dvc-program/financial/pricing-a-promotions

 

[Dean]

Is VGF worth the cost. This is how I figured it.

Bought 200 points at $150 a point. 30k plus $424 closing costs. Paid cash.

The following is a 10 year analysis.

I like going 2 x a year. This analysis is based on a October (F & W) and a early December trips in a standard view studio. Only way to stay there at those times is to own.

7 days early Dec. 125 pts Standard View
5 days early OCt. 85 pts. Standard View.

I want to stress, you will NEVER be able to stay at VGF studio, standard view, at the 7 month window at any time of the year except for a possible day or two once it sells out. Since I have bought, I have been tracking it. With 35% of the resort sold out, and 75% declared available for DVC, it still seems almost impossible at 7 months.

My DVC VGF was an add on so I received 2013 points (August UY) and banked my 200 2013 points (400 current points). If managed right over a 10 year period, we will be able to do those 12 days a VGF every year because of the 2013 banked points.

Now some assumptions. DVC resorts have usually hit the resale market at about 90% of there initial direct purchase price. I will use $145 (initially offered to DVC members for 1 month, I think?). So by the time there is any decent volume on the secondary market, I believe VGF will almost be sold out and buying direct will be $170.

The secondary market will be selling for about $130. So ok, I bought at $150 and could have waited another year or 1 1/2 yrs and saved $20 per point. However, I picked up 200 points from last year which I feel more than makes up for that $20, plus there are no restrictions. ( I know a lot of people don't see the value in using there points for cruises and the Disney collection and I agree, but still like the option) Also remember buying today gives you 50 years of points, buying next year gives you 49 and so on. So my conclusion, if you want to stay at VGF the value is there. Full 50 years on the contract, no restrictions, negligible price difference compared to secondary market if bought early, and still able to pick up 2013 UY points.

Now, if I don't own VGF and want to stay there what would it cost to pay cash. Well, I looked it up. Both staying at GF and VGF, at those times of the year, or really any time, the cost is crazy.

With tax, 5 days in October will cost around $3000 and 7 nights in early December around...get this...$5400 Total for 12 nights to stay there would be $8400 for 1 year based on the 2 times of the year I plan to travel. That's crazy expensive.

Finally I calculated the cost if I sold at 10 years.

I believe (assumptions but a conservative ones) that VGF will hold it's initial resale value around $130 point. I own at boardwalk, bought at $65 a point after incentives and is now selling for more. I am not counting on that.

200 pts. sold at 130 a point is $26000. I will have paid about 12K in maintenance fees (counting on about 2.5% MF increases), $424 closing costs and lets say 2k in commissions and closing costs selling. Total spent 44,424- 26,000 + = 18,424

Will have spent $18,424 for 120 nights at VGF = $153.53 a night at the VGF over the 10 years. I will take that!!!

As far as the time value of money goes, I used extremely conservative investments when I purchased; and I am not qualified to calculate the TVM on offsetting the 30k initially used to purchase, compared to the savings every year saved on rooms, dvc perks and annual passes for 10 years. The $ 153 a night to stay at VGF works for me. I would be interested in anyone's thoughts on this analysis or how they justified their purchase.

I question the never being able to stay in a studio at 7 months but I'd agree it won't be routinely available and there are times of year when it's going to be nearly impossible. Current trends won't be representative however you've got to wait for sell out and the members have a couple of trips under their belt before you can get an accurate gauge.

I don't agree with your assumption of $130 as the floor for resales, they're already at $135 but I would agree that they will be much higher than most other current resorts. CA is likely the best comparison.

I don't believe in using the destination cost as the comparison unless you would stay there anyway on cash and I do feel strongly in using the TVM. For VGF vs cash, I'd look at half the upfront as long term investments at 8% and half at money market rates, add in the yearly fees escalated at 4% and subtract a yearly amount for the vacation out of those funds based on what you'd do not owning DVC. For VGF vs a different DVC purchase, I'd adjust the short term vs long term investment ratio to 25/75% for most properties.

 

[disneynutz]

Bottom line is that vacations at Disney and DVC ownership is going to cost 100's of thousands of dollars over your term of ownership.

Owning where you love to stay will pretty much guarantee you availability there.

Paying a few extra thousand dollars now to get what you want really isn't that big of deal in the scheme of things if it makes you happy.

Bill

 

[dvc at last !]

Bottom line is that vacations at Disney and DVC ownership is going to cost 100's of thousands of dollars over your term of ownership.

Owning where you love to stay will pretty much guarantee you availability there.

Paying a few extra thousand dollars now to get what you want really isn't that big of deal in the scheme of things if it makes you happy.

Bill

Agree.

 

[CMOORE185]

When I bought in 2000 at $65 per point DVC was showing figures of a break even point at about 7 years. At today's prices that point has to at least double. So the value comes to the long term user, which I believe to be a small group. I would love to know how long the average buyer stays before selling, I would guess less than 10 years. So for most GFV's is not a good value.

 

[Sandisw]

Bottom line is that vacations at Disney and DVC ownership is going to cost 100's of thousands of dollars over your term of ownership.

Owning where you love to stay will pretty much guarantee you availability there.

Paying a few extra thousand dollars now to get what you want really isn't that big of deal in the scheme of things if it makes you happy.

Bill

Gotta agree with you there and the point I think that is important, is that everyone prioritizes things differently so no wrong way to look at it or disagree with someone's assumptions in terms of its "value".

I bought the resorts that I love and enjoy staying at them...don't want to own elsewhere and every time I try to stay somewhere else, it seems I end up changing back.

My DD and I are trying one night at VGF this summer and when Poly goes on sale, I can see maybe wanting points there, but in the end, very happy with what we have spent for DVC and what it offers us...

To the OP, good for you and your decision and owning what you feel meets your needs, at a price you felt meet your needs and is providing you with what you feel is a great value for your money...enjoy and WELCOME to the club!!!!

 

[Dean]

When I bought in 2000 at $65 per point DVC was showing figures of a break even point at about 7 years. At today's prices that point has to at least double. So the value comes to the long term user, which I believe to be a small group. I would love to know how long the average buyer stays before selling, I would guess less than 10 years. So for most GFV's is not a good value.

IMO that was about the best case scenario after the free passes were gone. For many I don't think they'll ever break even, esp for retail purchases at the higher cost more recent resorts.

Bottom line is that vacations at Disney and DVC ownership is going to cost 100's of thousands of dollars over your term of ownership.

Owning where you love to stay will pretty much guarantee you availability there.

Paying a few extra thousand dollars now to get what you want really isn't that big of deal in the scheme of things if it makes you happy.

Bill

I would agree for those who have enough dollars to do so, have enough knowledge and experience to truly know that's where they want and will use the points mostly at that option. However, I think the # of new buyers that buy out of hype/emotion thinking that's what they want then end up using their points here and there but not at that high end option consistently is very high. A number of them will end up with a different preference that would have been far cheaper up front. The problem is you'd really have to have a number of years and trips under your belt and stayed at essentially all options in question at least once and several times at "The Choice". Retail BLT buyers at least had the hope of lower fees to offset though predictably, the fees are not going to offset nearly as much as some thought.

 

[Splashboat]

When I bought in 2000 at $65 per point DVC was showing figures of a break even point at about 7 years. At today's prices that point has to at least double. So the value comes to the long term user, which I believe to be a small group. I would love to know how long the average buyer stays before selling, I would guess less than 10 years. So for most GFV's is not a good value.

The price of staying at Disney has also gone up quite a bit. I just looked at staying 5 nights in a studio at the Grand Floridian club level for 5 nights with the 30% off discount offered right now. For comparison, I took the same 5 days we stayed back in 2009 with the same package.
In 2009 we paid $2,653.46. Now it is $4,355.28 for the same exact package, nights and time of year.

 

[Lorilais_mommie]

The price of staying at Disney has also gone up quite a bit. I just looked at staying 5 nights in a studio at the Grand Floridian club level for 5 nights with the 30% off discount offered right now. For comparison, I took the same 5 days we stayed back in 2009 with the same package. In 2009 we paid $2,653.46. Now it is $4,355.28 for the same exact package, nights and time of year.

We also bought in at the VGF.. After many months of going over EVERY Detail..
This was one of our many reason for buying in..
We have watched our cash price at the resorts almost double into the past 5 years..
Disney shows no sign of slowing down..

 

[CMOORE185]

The price of staying at Disney has also gone up quite a bit. I just looked at staying 5 nights in a studio at the Grand Floridian club level for 5 nights with the 30% off discount offered right now. For comparison, I took the same 5 days we stayed back in 2009 with the same package.
In 2009 we paid $2,653.46. Now it is $4,355.28 for the same exact package, nights and time of year.

You have to factor in a 3% to 5% increase in MF's each year as a DVC member, so what you pay for a room also increases each year. But my point is that someone buying at today's prices must keep it a very long time for it to be a worthwhile purchase, which I believe very few do.

 

[DVCcurious]

I've been curious about DVC for two years and I've seen a lot of different math on this website to justify buying into DVC.

My conclusion is if you get a screaming deal at resale (late 2012) your break even is like 5 years. So those who bought BWV for $55 per point with banked points break even in about 5 years. If you get a generic resale deal, say BWV for $80 your break even is about 7 years. If you buy direct your break even is about 10 years.

So you will come out ahead if you buy direct, but it will take you longer.

If you are going to WDW and staying deluxe at least every other year than DVC will be a good deal regardless what price point you pay.

But frankly I have more regret not buying Google stock at $200 back in 2004 than I have regret not buying DVC points for $55 back in 2012!

 

[DougEMG]

If you normally would be paying cash to stay at the gf, then buying at the vgf is probably a good value. And while I am very tempted to buy there myself, I keep comparing it to buying resale for less than half the price and that cures me of any desire to buy direct.

Ive got a week booked this Sept at the vgf, hopefully I can still resist after that visit.

 

[Dean]

I've been curious about DVC for two years and I've seen a lot of different math on this website to justify buying into DVC.

My conclusion is if you get a screaming deal at resale (late 2012) your break even is like 5 years. So those who bought BWV for $55 per point with banked points break even in about 5 years. If you get a generic resale deal, say BWV for $80 your break even is about 7 years. If you buy direct your break even is about 10 years.

So you will come out ahead if you buy direct, but it will take you longer.

If you are going to WDW and staying deluxe at least every other year than DVC will be a good deal regardless what price point you pay.

But frankly I have more regret not buying Google stock at $200 back in 2004 than I have regret not buying DVC points for $55 back in 2012!

You must be ignoring the time value of money on the up front cost AND comparing to the rack rate of DVC to arrive at those times. If so, both are mistakes in my opinion and significantly underestimates ones costs.

 

[BenDiscipio]

You must be ignoring the time value of money on the up front cost AND comparing to the rack rate of DVC to arrive at those times. If so, both are mistakes in my opinion and significantly underestimates ones costs.

Look, Dean....I know you love to play the bad guy in the forums....the one who tells everyone what an idiot they are for buying DVC....but clearly there is a monetary advantage to owning DVC....otherwise nobody would be buying it. The downside isn't that you don't break even...the downside is that you're stuck with it every year until you sell it. If you're ok with the latter, it's a great deal. You know that, I'm sure....deep down....TVM aside....rack rate aside....it's a good deal if you want to keep traveling to Disney. Heck, it's even a good deal if you want to travel to disney every few years and rent out the rest.

You're paying a sum of money upfront for the right to pay only MF each year for your deluxe Disney hotel accommodations, which we know rack rates are escalating at an astronomical rate....based on demand, I might add....it's not like these rack rates are unrealistic because they are selling out with those rates....even discounted, especially in the monorail resorts.

You keep saying those buying into the VGF are not even going to stay there all the time based on your experience with other people you've talked to staying at wide varieties of places. But you're not taking into account that the GF is the flagship at Disney and there are many families that come back every year and pay those rates. Those families are going to buy into VGF, not to go exchange them for SSR and AKL I assure you! They are buying to stay at VGF every year. No matter how you discount the rates, you're going to break even very quickly when comparing DVC buy in at VGF with even discounted GF room rates every year. It's a no-brainer....you know that, I know that....

 

[Dean]

Look, Dean....I know you love to play the bad guy in the forums....the one who tells everyone what an idiot they are for buying DVC....but clearly there is a monetary advantage to owning DVC....otherwise nobody would be buying it. The downside isn't that you don't break even...the downside is that you're stuck with it every year until you sell it. If you're ok with the latter, it's a great deal. You know that, I'm sure....deep down....TVM aside....rack rate aside....it's a good deal if you want to keep traveling to Disney. Heck, it's even a good deal if you want to travel to disney every few years and rent out the rest.

You're paying a sum of money upfront for the right to pay only MF each year for your deluxe Disney hotel accommodations, which we know rack rates are escalating at an astronomical rate....based on demand, I might add....it's not like these rack rates are unrealistic because they are selling out with those rates....even discounted, especially in the monorail resorts.

You keep saying those buying into the VGF are not even going to stay there all the time based on your experience with other people you've talked to staying at wide varieties of places. But you're not taking into account that the GF is the flagship at Disney and there are many families that come back every year and pay those rates. Those families are going to buy into VGF, not to go exchange them for SSR and AKL I assure you! They are buying to stay at VGF every year. No matter how you discount the rates, you're going to break even very quickly when comparing DVC buy in at VGF with even discounted GF room rates every year. It's a no-brainer....you know that, I know that....

You have me all wrong, my goal is to get people to think about what they're doing and to make the best decisions, not emotional ones based on bad information. That requires providing info and questioning those variables. Having said that, I think your assumptions are off as generalizations and for the most part apply only to a smaller subset of people, esp the one that says that most who buy DVC make good decisions, some do and some don't but it's their decisions to make. I just want them to have the best info possible to make the decisions. Specific to the post your referenced, I was hoping the poster would expand on their assumptions because I don't think 5 yrs is possible if one accounts for all the variables that I think should be considers. If someone wants to use different variables, that's up to them.