How much will I need to spend each year before it is worth joining the Disney Vacation Club.?

How much will I need to spend each year before I should consider joining a Disney Vacation Club? I was offered a timeshare resort at the Animal Kingdom for about $17,000 with annual maintenance fees of about $800 (2% to 4% increase each year for inflation). The property is good for 49 years. My wife likes to stay at a moderate or better resort when we go to disney each year or any of it's other properties. Most of the places we like to go fit into our annual timeshare allowance each year on the months we like to visit.



Before we decide to transfer money out of our retirement account, we want to make sure if it is worth it, or should we leave it in our retirement account. We were planning on paying off the timeshare over a 10 year period by transferring our money from our retirement to the timeshare.



ThanksHow much will I need to spend each year before it is worth joining the Disney Vacation Club.?
I have SERIOUS concerns about taking money out of your retirement account for, of all things, a timeshare.



I also have serious concerns about spending so much money on a property that is only deeded for only 49 years. Why not look at a property that serves in perpuity. So those generations can enjoy vacationing as well.



But lets focus on your question about finances...

Remember, your retirement account is an appreciating asset (well, we hope it is) and a timeshare is a depreciating asset (well, I don't consider timeshares an asset, but some do).



So let's compare figures the best we can.



You don't provide your rate of return for your retirement account. I'm hoping it's over 5%.

We know you can get a loan for less than 5% (Feds just lowered to 4.25% 1-8-8), but lets keep it simple and you said 120 months (10 years) @ 5% for a $17,000 loan, $0 down.

(I would stretch the payment out as long as possible to keep the rate down, but that's your call)



With those numbers, you're looking at $181/month for 10 yrs (principal + interest) not including the $66/month of maintenance for a total of $247/month the first year.



For that first year, $247 x 12 = $2964

Now $2964/6 nights = $494 per night for your resort stay ($423/night for 7 nights)



We did not factor the 2-4% annual maintenance inflation.



If $423 - $494 per night for a yearly 1 week vacation is not in your budget, you have options;



Look at a timeshare reseller.

You can perhaps knock that $17000 price tag down to $8000 (maintenance fees will most likely remain the same)



www.sellmytimesharenow.com

www.holidaygroup.com

www.timesharesonly.com

www.ebay.com



are a few resellers you can look at.



Your other option is just to bid on a week at a nice resort. Perhaps you can get something cheaper for the week than a whopping $2964 (maybe even nicer too) without the mortgage and maintainence obligation and, most important, without tapping into your well-earned retirement account.



Before you jump into the Timeshare pool, ask friends who own or have owned timeshares in the past about their usage and if they have received value from their timeshare.

And check out the timeshare owners website

www.tug2.net

for more valuable information on this "investment" (not my words)



I wish you luck (and don't touch that retirement account for a timeshare)

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