Full time as a both a necessity and a lifestyle choice

[namtrag]

Hi All,

My wife and I are 50ish, and without going into many details, are not in the greatest financial shape. My house keeps dropping in value, and despite putting my life savings down 6 years ago, and paying 6 years of house payments, we are still upside down by 40k +. Divorce obligations are pretty steep as well, so for another 3 years, minimum, we will have zero money to save. To top it all off, we have no retirement of any kind.

We love being outdoors, and found backpacking and car camping as a way to get away from our stress fairly inexpensively. We have started discussing a plan where anywhere from 10 years from now to retirement at 67, we can somehow get out of our S&B house, buy an RV (class A or C), and go on the road as FTers, not driving constantly, but putting down for a month or two at a time. I am an accountant, so I could do bookkeeping, income taxes, and the like from the RV as long as I have an internet connection. The hard part will be finding clients!

I see RV living as fairly inexpensive compared to my S&B existence, with its mortgage payment of $1700 (PITI), 250 electric bill, 100 water bill, 50 sewer bill, and all the repairs and maintenance on top of that ( all through the age of 75 before it's paid off) . I almost see no other option for us as we grow older, or very few other options. I cannot see the logic of continuing to pay on a house which will never come back to what I owe. Much less having to work until 75 just to pay the mortgage off.

I see short-selling or renting out my house at a 200-300 negative cash flow per month, then RV or renting a small condo as one slightly viable option as we approach "retirement" as we expect our SS at 67 to be about 2800-3000 per month, which would hardly cover our current housing costs plus food.

I know we are not the only ones in precarious financial situations, but it seems like most of what I see on these types of forums are retired people with ss, full military or civilian pensions, and financial security, who are rving as a fun way to retire vs doing it because you can't afford other ways to live when you get old.

I would be interested to hear from those who are doing it on ss or small pensions, and is it doable, or a big struggle?

[Larryzv7]

My house was under-water as well, so I rented it out for awhile at more than twice my mortgage payment, went full-time RVing, and enjoyed getting the extra rental money for almost 2-years. The tenants were good and their lease was up on February 1st so now I am putting it on the market for sale. I will leave it on the market 90-days and if it does not sell then I will once again rent it out for a year or two until the market somewhat rebounds. The rental market is very hot and I’ve found it rather easy to get reputable tenants. You may or may not want to hire a property manager to manage your rental. My property manager is also a real estate broker and handles both my rental and the sale of my house; he only charges $75/month to manage my property and that comes out of my rental income. Still there is a lot left over, after paying my property manager, mortgage, and HOA dues, that I do have some discretionary income. The extra money is great and once my house is sold I will have a lot more discretionary money every month from not having a mortgage, HOA dues, property taxes, etc.

[Executive45]

IMHO, much of the information provided is good, some not so good... true, an RV is a depreciating asset, but it sounds like your home is also. Throwing good money after bad is never good advice. If you truly believe your home will never be worth what you owe and eventually you'll end up losing it anyway, then my advice would be to dump it asap. That said, a short sale will mess up your credit same as a bk... maybe not quite as bad but pretty close, so buy your rig now assuming your credit still is solid enough.

We broke even on our home in California but we paid cash for a mobile home in Arizona that we live in for the three winter months. It also provides us an exit strategy.

Your food bill won't change unless you eat out a lot..we don't...but the costs of living in the RV are much lower than the S&B. While doing your research, pick out some places of interest and check out the monthly costs for sites. Except for the cost of electric, everything else is included....We spend somewhere between $35-50/yr but rarely stay a week or so at any one park so fuel and site rent is more than monthly rates. Work Camping is an excellent idea as well..especially with a child...depending on age...

Good luck...do your homework and don't let your pride get in the way of making a good financial decision......Dennis

[jmtandem]

Also, your plans on how to secure an income sound uncertain.

It sounds to me like the OP has just started looking into this. He has a job and perhaps so does his wife. Walking away from two jobs and going out in an RV without sufficient income coming in is a little scary for most.

As far as depreciation on an RV, paying $50,000 for a nice new fifth or travel trailer, like an Arctic Fox that is well insulated and built for full timing would probably work. If, in ten years it was essentially worth absolutely nothing, the depreciated loss would be $5,000 a year plus maintenance, registration, insurance, tires, and (if financed) some interest. That might be around $7000 a year.

If he keeps his home at the costs he has identified, the cost is in excess of $2000 a month and probably quite a bit more or $24,000+ a year minus the income tax deduction. If the OP pays the monthly rate at RV parks that would add another $500-700 a month depending on where the RV park is and how nice it is. Or a total cost of around $13,000 a year for the RV park and RV coach. Since the OP does not include any info about his or his wife's income it is hard to understand if an RV lifestyle apart from the current employment would be a significant reduction in earnings but most likely so. Social Security rarely is as much as the wage earner made in income.

If their income is $3500 or more a month they can make the RV life work for them as long as their debts are low and the RV payment is not included in that number. $5000 would be a better number if paying off some debts, divorce costs, and paying $500 a month for the RV. Keeping the home for ten years would cost $240,000 in principal, interest, and utilities if not more. So, in many ways the RV life can be less expensive. Many that fulltime and say it costs about as much as a home probably had a less expensive home or they spend all their money each month just as they did with home ownership. I assume the OP has a car, perhaps two, that would need to become a toad on a motorhome or a truck or van to tow a trailer or fifth so those costs are outside my calculations as they are already affording the cars.

In any event it is an interesting discussion. The OP is an accountant, here looking for some information, so I am sure he can work the numbers. Bailing out of the house ASAP might be financially in their interest rather than struggling every year to make ends meet. They also have a child that in all probability will need a college fund, starting on that as early as possible only helps that child get into the university system without an undue financial burden.

[Jayco-noslide]

Not sure I would recommend it. Possibly you could live cheaper, sort of. However, 1st off, a nice RV is expensive, they use lots of fuel and camping fees can equal renting a nice apartment. Then, the RV depreciates rapidly and eventually has to be replaced so the long range cost are high. Also, your plans on how to secure an income sound uncertain.

[TheHardWay]

My brother and his wife were way under water on their house too, but loved it too much. They held on to it for many years after they could no longer afford it, and finally had to declare bankruptcy and give the house back to the bank. Had they done it when they got into trouble they would already have clean credit; instead they are still trying to dig their way out.

[jmtandem]

I know we are not the only ones in precarious financial situations, but it seems like most of what I see on these types of forums are retired people with ss, full military or civilian pensions, and financial security, who are rving as a fun way to retire vs doing it because you can't afford other ways to live when you get old.

I don't think this is necessarily true. There are 1.3 million Americans living in RV's full time. Most by choice. Most are doing it on $3500 or less a month not counting the cost of the RV depreciation or payments. Of course, some spend all their money each month making the RV lifestyle as expensive as it was living in the stick and brick. Most spend time looking for ways to save money like paying the monthly rate at an RV park that can be as little as $500 instead of the daily rate. Most don't eat out all the time. Some boondock. But, many more than in the past are young, work web based businesses to make ends meet, and thoroughly enjoy following the seasons. The web has made it much easier to work and make some money and travel and do it from anywhere. There are lots of web pages devoted to ways to make money fulltiming and all the rest of the attributes of that lifestyle. For many years the ideal to acheive was to retire and full time in the RV. Now many younger folks are doing that long before retirement. Check out these websites that are loaded with tons of good info on full timing and making money as well:

Escapees
Technomadia
NuRvers
Gone with the Wynns

As far as your house and your credit if you decide to off it as a short sale, I would get the RV first to be sure you can get the RV before letting the house go and having credit issues. Get a big RV to live in, get one with electrical capacity like solar and a generator especially if you plan to be off the cord for long periods of time, get an RV that is not made only for occasional recreational usage but full time living and get connected with other folks that are full timing and working, go to their rallys and network, etc. Lots of great ideas come from other folks and you never know what will wash up over your transom once you cast off the dock lines. It seems to me you need to make a decision on the house relatively soon for two important reasons: time is going by for your child growing up and time is going by for you and your wife and a fresh start could be a breath of fresh air for you. We never know how long we have to live and be healthy. Bad decisions that you might have made in your past are in the past, move on.

Sometimes when faced with a decision the only wrong decision is not making any decision. However, I think you will find everybody in the webpages I shared above want to live in their RV and make it happen. If your choice of an RV is only to get out from under an expensive home with no light at the end of the tunnel, then the RV might not be for you. You have a nice job apparently, so maybe a good choice would be to try the RV fulltime life close enough to go to work every day at least until you build up enough finances to be truly mobile.

Hope this helps! If not, line the bird cage with it.

[RVUSA]

namtrag wrote:
I know we are not the only ones in precarious financial situations,

You are the only accountant I have ever heard of in this precarious financial situation.

[John___Angela]

namtrag wrote:
That is sweet! whereabouts are you in these pics. It looks really pretty.

And thanks everyone for the encouragement (even the person who recommended apartment now.) I am glad we are finally moving to figure out a way to make things work...and consider all the options.

Hello again. This property is in British Columbia Canada. I don't know where you live but more importantly where do you want to live. There are places like this all over the USA and Canada. Prices can very from 25,000 to 250,000 depending on location and amenities. Nice places can be found routinely for 50,000, after that view and location start playing a strong role.

Good luck and safe travels.

[Aridon]

Aridon wrote:

Francesca Knowles wrote:

John & Angela wrote:

Aridon wrote:

Francesca Knowles wrote:

Aridon wrote:
We have a permanent site which we use as a home base. We are young, well off financially and have a young baby.

People wonder and ask all the time why we don't have a house and can't fathom why we don't buy one. Well I broke it down for my inlaws the other day who wanted us to buy their home so they could FT in their RV (i'm not kidding).

250k for the house
$4,700 in property taxes
$2,400 in insurance
$600 a year for HOA (no benefits)
plus landscaping, water sewer, cable etc..

New roof in a few years and every 15 years
New AC since its 12 years old and likely to die in the next 5 years
Same with the water heater etc.

Compared to living in our RV:

$216 / mth which covers everything
HOA, water, sewer, cable, trash pick up, pool etc

$1,100 a year for taxes.

:h

Not gettin' the math here- $316.00 a month including taxes gets you what, exactly???

If that's a piece of ground where you park your ever-depreciating "house", I'm thinking it's only relevant for comparison purposes if you never take that house anywhere else where you pay to park it. In that case you'd need to factor in campground cots plus all expenses connected to all that moving around, including depreciation of the house.

Not when I would keep the RV regardless. Even if we bought another Stick and Bricks or moved into a property we already own and rent I would still keep my RV. Making the cost sunk and irrelevant to the calculation.

I get where Aridon is coming from on this. We are also full timers and also have a couple of RV locations split between north and south climates. We also have HOA fees (one higher and one lower). Many folks like us in this situation use these properties as a home base to travel from but don't necessarily hang around the property all the time. These type of properties tend to rent out for fairly large amounts, 1000 to 1500 dollars is common and they are fairly easy to rent. That allows the owner to go on the road with no worries of where the money for the on the road campgrounds comes from.

Except that yours is a completely different situation from either Arlon's or the O.P.'s.

Unless I've read their posts completely wrong in both cases, they're getting rid of the (rentable) property, and therefore won't be getting any offsetting income therefrom. Arlon's "expenses" as posted are either payments on a home base-type piece of raw land or space payments at some kind of RV park...it seems to me that if he's not living there full time, fees for travel/campgrounds when going place to place ought to be factored in for comparison purposes.

No our situations are rarely the same and you are correct my situation and OP is very different.

I'm simply letting the OP know I understand what his plans are, posted my thoughts and that is all. He has a lot of debt and can't rent out his home nor does he want to pay 400k+ in interest over 30 years. I understand why he wants to cut his bills down and maybe still have the option of moving his home if he wants.

Why would I factor in travel and time in the RV compared to buying a house when I would continue to do so if we had a house or not? I'm comparing living expenses not travel / vacation. If he wants to travel then obviously he needs to account for that in his budget. My travel budget is likely very different from yours or anyone else here so why bring that into it anything?

Not sure why that is so difficult to understand. We full time, don't plan on stopping. If we bought a house to live in, we would continue to spend time on the road and such. When I compare my living expenses I don't include my vacation expense. Seems kind of obtuse to even suggest otherwise. Continually. The two are not in any way related. I could park my RV on my lot and that would be it. Obviously if I travel or go somewhere its extra. If I lived in a house with the RV it would be exactly the same. Extra.

[azrving]

Is there a way out of the house now? Anyway to get out without defaulting. If you think you will be in the same basic shape down the road as far as the house goes, it makes no difference.

If you bail now, its that much sooner you will have reduced your stress level and work load.

I bought in the bubble, put $50,000 down and another $50,000 plus in materials and my labor in rebuilding it literally from the curb to the back fence and sold it and walked away with $50,000

Why? Because I wouldn't walk with anymore now (5 Years later). In the mean time I stopped paying $4800.00 in taxes, water bills etc. I moved into our vacation home and winter down south. My point is that if you wont be much different down the road, do it now. Your net worth and earning potential may be better off.

Its a tough thing to give advice on but I also see the benefit that you are mobile. You can work anywhere. What if you bought a $8,000 TT or 5er and park it in a decent RV park for $300 to $400 a month. I don't know, would you still be swimming but not feel like your about to go under at the next crisis? Then you have the seasonal issue, its great down south in the winter but do you want to be there in the summer? Could you have residence in SD and pay someone to move the rig twice a year and just have one cheap car. You know, cut it to the bone. God I hate debt. But it is self induced, never seen an arm twisted up behind anyone's back at a bank closing.

[Aridon]

Francesca Knowles wrote:

John & Angela wrote:

Aridon wrote:

Francesca Knowles wrote:

Aridon wrote:
We have a permanent site which we use as a home base. We are young, well off financially and have a young baby.

People wonder and ask all the time why we don't have a house and can't fathom why we don't buy one. Well I broke it down for my inlaws the other day who wanted us to buy their home so they could FT in their RV (i'm not kidding).

250k for the house
$4,700 in property taxes
$2,400 in insurance
$600 a year for HOA (no benefits)
plus landscaping, water sewer, cable etc..

New roof in a few years and every 15 years
New AC since its 12 years old and likely to die in the next 5 years
Same with the water heater etc.

Compared to living in our RV:

$216 / mth which covers everything
HOA, water, sewer, cable, trash pick up, pool etc

$1,100 a year for taxes.

:h

Not gettin' the math here- $316.00 a month including taxes gets you what, exactly???

If that's a piece of ground where you park your ever-depreciating "house", I'm thinking it's only relevant for comparison purposes if you never take that house anywhere else where you pay to park it. In that case you'd need to factor in campground cots plus all expenses connected to all that moving around, including depreciation of the house.

Not when I would keep the RV regardless. Even if we bought another Stick and Bricks or moved into a property we already own and rent I would still keep my RV. Making the cost sunk and irrelevant to the calculation.

I get where Aridon is coming from on this. We are also full timers and also have a couple of RV locations split between north and south climates. We also have HOA fees (one higher and one lower). Many folks like us in this situation use these properties as a home base to travel from but don't necessarily hang around the property all the time. These type of properties tend to rent out for fairly large amounts, 1000 to 1500 dollars is common and they are fairly easy to rent. That allows the owner to go on the road with no worries of where the money for the on the road campgrounds comes from.

Except that yours is a completely different situation from either Arlon's or the O.P.'s.

Unless I've read their posts completely wrong in both cases, they're getting rid of the (rentable) property, and therefore won't be getting any offsetting income therefrom. Arlon's "expenses" as posted are either payments on a home base-type piece of raw land or space payments at some kind of RV park...it seems to me that if he's not living there full time, fees for travel/campgrounds when going place to place ought to be factored in for comparison purposes.

No our situations are rarely the same and you are correct my situation and OP is very different.

I'm simply letting the OP know I understand what his plans are, posted my thoughts and that is all. He has a lot of debt and can't rent out his home nor does he want to pay 400k+ in interest over 30 years. I understand why he wants to cut his bills down and maybe still have the option of moving his home if he wants.

Why would I factor in travel and time in the RV compared to buying a house when I would continue to do so if we had a house or not? I'm comparing living expenses not travel / vacation. If he wants to travel then obviously he needs to account for that in his budget. My travel budget is likely very different from yours or anyone else here so why bring that into it anything?

Not sure why that is so difficult to understand. We full time, don't plan on stopping. If we bought a house to live in, we would continue to spend time on the road and such. When I compare my living expenses I don't include my vacation expense. Seems kind of stupid to even suggest otherwise. Continually. The two are not in any way related. I could park my RV on my lot and that would be it. Obviously if I travel or go somewhere its extra. If I lived in a house with the RV it would be exactly the same. Extra.

[namtrag]

That is sweet! whereabouts are you in these pics. It looks really pretty.

And thanks everyone for the encouragement (even the person who recommended apartment now.) I am glad we are finally moving to figure out a way to make things work...and consider all the options.

[Francesca_Knowl]

John & Angela wrote:

Aridon wrote:

Francesca Knowles wrote:

Aridon wrote:
We have a permanent site which we use as a home base. We are young, well off financially and have a young baby.

People wonder and ask all the time why we don't have a house and can't fathom why we don't buy one. Well I broke it down for my inlaws the other day who wanted us to buy their home so they could FT in their RV (i'm not kidding).

250k for the house
$4,700 in property taxes
$2,400 in insurance
$600 a year for HOA (no benefits)
plus landscaping, water sewer, cable etc..

New roof in a few years and every 15 years
New AC since its 12 years old and likely to die in the next 5 years
Same with the water heater etc.

Compared to living in our RV:

$216 / mth which covers everything
HOA, water, sewer, cable, trash pick up, pool etc

$1,100 a year for taxes.

:h

Not gettin' the math here- $316.00 a month including taxes gets you what, exactly???

If that's a piece of ground where you park your ever-depreciating "house", I'm thinking it's only relevant for comparison purposes if you never take that house anywhere else where you pay to park it. In that case you'd need to factor in campground cots plus all expenses connected to all that moving around, including depreciation of the house.

Not when I would keep the RV regardless. Even if we bought another Stick and Bricks or moved into a property we already own and rent I would still keep my RV. Making the cost sunk and irrelevant to the calculation.

I get where Aridon is coming from on this. We are also full timers and also have a couple of RV locations split between north and south climates. We also have HOA fees (one higher and one lower). Many folks like us in this situation use these properties as a home base to travel from but don't necessarily hang around the property all the time. These type of properties tend to rent out for fairly large amounts, 1000 to 1500 dollars is common and they are fairly easy to rent. That allows the owner to go on the road with no worries of where the money for the on the road campgrounds comes from.

Except that yours is a completely different situation from either Arlon's or the O.P.'s.

Unless I've read their posts completely wrong in both cases, they're getting rid of the (rentable) property, and therefore won't be getting any offsetting income therefrom. Arlon's "expenses" as posted are either payments on a home base-type piece of raw land or space payments at some kind of RV park...it seems to me that if he's not living there full time, fees for travel/campgrounds when going place to place ought to be factored in for comparison purposes.

[John___Angela]

Aridon wrote:

Francesca Knowles wrote:

Aridon wrote:
We have a permanent site which we use as a home base. We are young, well off financially and have a young baby.

People wonder and ask all the time why we don't have a house and can't fathom why we don't buy one. Well I broke it down for my inlaws the other day who wanted us to buy their home so they could FT in their RV (i'm not kidding).

250k for the house
$4,700 in property taxes
$2,400 in insurance
$600 a year for HOA (no benefits)
plus landscaping, water sewer, cable etc..

New roof in a few years and every 15 years
New AC since its 12 years old and likely to die in the next 5 years
Same with the water heater etc.

Compared to living in our RV:

$216 / mth which covers everything
HOA, water, sewer, cable, trash pick up, pool etc

$1,100 a year for taxes.

:h

Not gettin' the math here- $316.00 a month including taxes gets you what, exactly???

If that's a piece of ground where you park your ever-depreciating "house", I'm thinking it's only relevant for comparison purposes if you never take that house anywhere else where you pay to park it. In that case you'd need to factor in campground cots plus all expenses connected to all that moving around, including depreciation of the house.

Not when I would keep the RV regardless. Even if we bought another Stick and Bricks or moved into a property we already own and rent I would still keep my RV. Making the cost sunk and irrelevant to the calculation.

I get where Aridon is coming from on this. We are also full timers and also have a couple of RV locations split between north and south climates. We also have HOA fees (one higher and one lower). Many folks like us in this situation use these properties as a home base to travel from but don't necessarily hang around the property all the time. These type of properties tend to rent out for fairly large amounts, 1000 to 1500 dollars is common and they are fairly easy to rent. That allows the owner to go on the road with no worries of where the money for the on the road campgrounds comes from. In some of these types of communities the HOA fees even cover unlimited golf not to mention health club, pools, tennis etc etc. Not saying this would work for the OP but it's something to think about. Some of these types of communities are zoned for park models as well so it can also play into the exit strategy when its time to come off the road. Count on the RV being worth zero the day after you buy it and it makes the planning easier. We have been full timing for 11 years in the same rig and there is no doubt the maintenance is less than on a house. Lots of options. If you do look at an RV property make sure you spend some time in the community before you buy the property. That will give you a chance to see if there are any down sides to living in a fairly regulated community. We like the idea of a regulated community as it keeps it all neat clean and tidy, others hate the rules and regs. Check it out.

Either way, good luck in your situation. I wish you the very best. Here are a few shots of an RV property, in this case ours. Lots of ideas out there.

[namtrag]

I never mentioned my income....so I don't know how you can conclude we live too high a lifestyle, but I guess one could infer that. Our house is a starter home of 1500 sq ft. I see that you are from Ohio. Our house in Ohio would sell for about 125k, here in Va Beach it is worth about 210k. I paid 325k for it in 2006 and put 60k down. Rent on an apartment here (2 BR since we still have a child at home) that you would actually set foot in is about $1400 per month. I don't think lowering my housing costs by $300 per month is going to solve my problems...it might help some, but it's not going to be a long term solution unless we move to a rural setting when we retire. Selling the house is also not an option since we a 40,000 underwater in it, with an additional 10,000 in deferred maintenance to do to sell it.