What are some of the disadvantages of beginning full timing?

[precioustime]

We presently own an all paid for home but are considering becoming full timers. Our present rig is a 28' 2016 motorhome, very comfortable for us two. If we sell the home and full time, travel the US and see the country are there any disadvantages to this plan? I could keep the home then travel for 6 months to a year and see how we feel fulltiming.In short what disadvantages have you found in becoming a full timer?

[BarbaraOK]

2gypsies wrote:

allen8106 wrote:
If and when I go full time I'll sell my place and drop $50k into a CD for an exit plan. I live in the country on 14 acres and at 59 it's getting to be more than I want to deal with. I could probably sell the place for $225k and burn the rest living out my life at $13k-$15k a year. Social Security, pension and 401k will kick it at 65.

Many full-timers sell their house and put it ALL into their investment plan. That's your exit money. $50,000 wouldn't go far. When you start out full-timing you really should be debt-free.

Not necessarily. For a lot of us, it made sense NOT to pull money from tax-deferred investments but instead pay for rigs with low interest loans that could easily be handled by our income stream.

[2gypsies1]

allen8106 wrote:
If and when I go full time I'll sell my place and drop $50k into a CD for an exit plan. I live in the country on 14 acres and at 59 it's getting to be more than I want to deal with. I could probably sell the place for $225k and burn the rest living out my life at $13k-$15k a year. Social Security, pension and 401k will kick it at 65.

Many full-timers sell their house and put it ALL into their investment plan. That's your exit money. $50,000 wouldn't go far. When you start out full-timing you really should be debt-free.

[allen8106]

If and when I go full time I'll sell my place and drop $50k into a CD for an exit plan. I live in the country on 14 acres and at 59 it's getting to be more than I want to deal with. I could probably sell the place for $225k and burn the rest living out my life at $13k-$15k a year. Social Security, pension and 401k will kick it at 65.

[allen8106]

2oldman wrote:

dons2346 wrote:
If you have a paid for home, you would be stupid to sell it. You could either rent it out...

I don't think I'd go so far as to call it stupid. If you're in your golden years it's nice to cash out and have all the money to do what you want.

Many think it's stupid to rent it out. Being an absentee landlord is not something I'd consider a great idea.

I was a landlord for about 5 years and hated it. It's a royal PITA.

[jorbill2or]

I was agreeing with WRPO .. 2oldman made a coment about taxes on sales of a primary and that’s what I was replying to .. not clearly though obviously.

[Walaby]

Understand that WRPO, was just pointing out to jorbill20r that the discussion was about turning a primary into a rental.

Rental property is not for everyone. I did it for about 15 years... not sure I'd do it again.

Mike

[westernrvparkow]

Walaby wrote:

jorbill2or wrote:
I think the discussion was on a rental home not a primary and turning a primary into a rental?

No, OP clearly was talking about a primary residence, and what to do with that (sell or possibly rent).


Mike

The conversation then meandered into how turning your home into a rental could lead to very real, and very expensive, tax consequences. Currently you get to keep the first $250,0000 ($500,000 if your are married) of appreciation in your residence tax free. Make that home a rental and you put that appreciation at risk of taxation. with federal capital tax rates of up to 20 percent, that could conceivably result in a $100,000 tax bill, not pocket change for most people.

[2oldman]

I guess the OP isn't coming back.

[2oldman]

Walaby wrote:
.. Dad had health problems creep up all of a sudden, and he moved in with me for the rest of his time.

This is why you should do what you've dreamed of doing *before* you have health issues. Nobody's getting younger and healthier, but everyone wants to hang on to houses and jobs as if they are.

[Walaby]

jorbill2or wrote:
I think the discussion was on a rental home not a primary and turning a primary into a rental?

No, OP clearly was talking about a primary residence, and what to do with that (sell or possibly rent).

My father and his wife did what some refer to as the "stupid" thing, but it wasn't stupid at all for them. They sold the house, bought the 5er and dually and hit the road. Worked out great. They got to travel and do whatever they wanted, with whomever they wanted, and didn't have to be anywhere at any particular time.

The need for an exit plan is important though, and in that case, they were a tad unprepared. They had plenty of assets to handle whatever they needed or wanted, and could have easily bought a house when it was time. Unfortunately, Dad had health problems creep up all of a sudden, and he moved in with me for the rest of his time. Step Mom had plenty of assets to buy a house and take care of herself.

If it were me, I would give it a shot for the first year, and then decide to sell or keep house.

Mike

[valhalla360]

ksg5000 wrote:
My RV depreciates - my home appreciates. While taking a year or so off to travel in the RV has it's appeal I would think long/hard b4 I would sell my house.

When you factor in, property tax, insurance, maintenance, periodic kitchen rehabs, etc...it's not the great investment you've been lead to believe.

For most, your best chance is to break even "before" inflation which means you are really depreciating after inflation...probably not as much as an RV but unless you go crazy you will have only a fraction as much money tied up in the RV (would you rather lose 10% on a $250k house or 20% on a $25k RV?)

[valhalla360]

2oldman wrote:

dons2346 wrote:
If you have a paid for home, you would be stupid to sell it. You could either rent it out...

I don't think I'd go so far as to call it stupid. If you're in your golden years it's nice to cash out and have all the money to do what you want.

Many think it's stupid to rent it out. Being an absentee landlord is not something I'd consider a great idea.

X2

Don't become an accidental landlord. Particularly an absentee landlord.

I will say, don't sell the house and dump every penny into an RV but you should be able to upgrade your RV for less than 10% of the house cost.

The downside is how you adapt to the new lifestyle. Lots of peopl burn out treating it like a vacation. Remember you aren't on vacation so you don't need to do 2000miles in a week and hit 3 attractions per day every day. It's OK to find a comfy nice place and hang out for a week or two. Travel days of a 100-150 miles are nice. See 1 or 2 attractions per week.

Of course a big question is are you working or retired? If working, you need to figure out how to fit that in.

[ksg5000]

My RV depreciates - my home appreciates. While taking a year or so off to travel in the RV has it's appeal I would think long/hard b4 I would sell my house.

[DutchmenSport]

Disadvantage? Waking up in the middle of the night from a dead sleep and realizing for that instantaneous moment, you have no clue where you are. Oh ... I experience that right now, we are in the camper so much, between drive way camping and State Park camping. I haven't been in the house, except for an occasional shower for 7 months now.