Serious question - Rent, or live in an RV?

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Serious question - Rent, or live in an RV?

Wayne Yates
Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes

I knew that title would grab your attention.

I'm 24. I'm single and not looking for anything until I have enough passive income from real estate rentals to leave my job. No pets, literally just me.

I'm a contractor. Work is heavy right now, but I've been without work for 8 months before and it's scary. That's the only reason I'm considering living in an RV. Even if I rent though, I'll always have at least 6 mos of savings in my bank account. So I'm undecided.

With that being said, I'm a pretty materialistic guy. I like things. I usually rent 3 bedroom houses just for myself. I use one room as a gym, one as an office, then a bedroom. And I love it.

What I don't love... is the rent payment. I pay about $1,200/mo in rent and yard maintenance. I make about $1,000 a week. I have about $10,000 in my checking account.

My parents have 20 acres about an hour from everyone (friends, family, and work) that I can use. Nice land.

I also have no debts other than my car payment. It's a $12,000 car. I owe $10,000.

So without boring you with details... should I pay cash for a cheaper camper trailer, fix it up, and live in that? Approx $15,000 total. And enjoy the perks of seclusion (big plus, I'm introverted), and no rent payment while making pretty decent money...

OR

Continue renting pricey houses and just be more traditional about things.

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Michele FischerPro Member
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
9y

I'm at a different place in my life, but here's my reaction:

It seems silly that you owe $10K on a $12K vehicle... seriously?  I'd start paying that off pretty aggressively and start building a fund for the next vehicle.

It seems luxurious to have a three bedroom apartment for one person, isn't there something between a 3 BR and an RV?

I would not want to live an hour away from my life.  Commuting takes a big toll on you and your modest vehicle, is it worth it?  Is there a closer place you could park and RV or a tiny house?

Seems like you are contemplating two extremes in living situations, and maybe middle ground would be a better option.

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  • Wayne Yates
    OP
    Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes
    9y

    @Will Pritchett I've read a couple of Dave Ramsey's books, he's super conservative. Which I suppose would be good for me to do for the next year, but ultimately I'm more of a Robert Kiyosaki sort of investor. Or wanting to be.

    I've never considered that approach, but my parents have a shed I could park my RV under which is right next to the water/power unit. They also have all my gym equipment and my old bedroom could be converted into a work space for a small side business I want to start.

    We do have Uber, I never thought of doing that though. If work ever dies down, I'm sure I'll give anything a shot! Haha. Right now I only have about 90 minutes of free time a day on my work days. And in that time I still have to shower and cook, so I really don't have much time at all, but it would definitely be a consideration if work slowed down. Thanks Will

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  • Wayne Yates
    OP
    Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes
    9y

    @Timothy Beauford thanks so much for the financing company names, I'll add them to my notes. Seriously I appreciate that Tim!

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  • Wayne Yates
    OP
    Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes
    9y

    @Glenn R. I'm not impressed with my income by any means, I don't know why people twice my age slave away their lives for $25/hr. I promise, it's not something I brag about. Haha. I also have a great head when it comes to buying stuff. I used to drive a $40,000 truck, rent a luxurious house, motorcycle, bought all new furniture, etc etc etc. I'm past all that. Got rid of most of it and I'm talking about getting rid of the rest, so I don't understand how I need to mature anymore when it comes to money. I'm pretty much not going to finance anything unless someone else is paying for it and giving me cash flow. Wasn't trying to brag about $5k a month, that's not worthy of bragging. I'd rather make $3k a month from passive income in rentals without slaving away 60 hour weeks like I do now.

    College town is just close to where my parents live. I'm stuck between a college town and a huge city. I work in the huge city. Moving out there is waaayyyyyy too hectic for me. I like my seclusion in the country, which is a good 45 minute drive. I don't mind the drive at all, I don't see why people keep talking about that portion. I've driven an hour for work for over 7 years, it's all I know. Maybe it catches up with you with time though. I'm unsure. I don't plan on doing this job forever anyways though.

    Not trying to sound like I'm attacking, I genuinely appreciate the advice. I'm working on my credit now. I have a secured credit card, and 3 others. I use them periodically and haven't paid a single cent in interest for over a year. My car (my only debt) has automatic payments set up and I'm going to double the payment after the first is sent and apply it only to the principal. I'm going to do this for a couple months. Once I have the RV and no rent, then I'll really throw it at the car. Good idea or no?

    I'm really good with my spending now. Literally the only materialistic thing I've bought in the last few months have been books. I listen to them on Audible and buy the hard copies for my library. It's a sentimental thing and shows my progress along the way. Other than that, nothing flashy or dumb. Haven't even bought shoes in a year. I'm doing well over here I think! Haha. Sorry to ramble

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  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    9y
    Wayne Yates - Why don't you rent a furnished bedroom or walkout basement in someone else's house for $400-600/mo, utilities included? Find somewhere month to month within 15 minutes driving of your current job, then you'll save 100 miles, 2 hours each day. (I have used craigslist shared/temp postings, craigslist wanted, and church/community boards in the past to find affordable living.) You can use the saved time to work longer, potentially, and make $50-100 more every day. You can pocket the savings in comparison to your alternatives to save up for a house downpayment where you then become the 'landlord'. Or pay down your car debt faster. Consider wear and tear on your car is estimated at .50+/mi by the IRS so 100 miles is like $50/day in effective cost. (Even though actual cash expense is only $12 in gas, etc.) Commuting is not a tax deductible expense.
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  • Wayne Yates
    OP
    Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes
    9y

    @Wade Alderson that's what I was thinking! Like if I buy a rental home for a tenant, most people pay that much in rent anyways... If all goes bad and the tenant is kicked out or I go months without rent, I can afford it comfortably regardless because I live for practically free already. Just seems smart to me, but I was thinking people would think I'm being a little over the top with it.

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  • Wayne Yates
    OP
    Tuscaloosa, AL · Member since 2017 · 42 posts · 6 votes
    9y

    @Natalie Schanne well, I have two options.

    1. Live 45 mins (hour with traffic) away from work. Rent free on parents land in the corner. We have opposite schedules. I'd wake up around noon and could use their house however, they'll be gone. Kitchen to cook, bathroom to shower, etc. Hoard away all my money and downsize. Read a ton of books, work on my credit, get my RE license, then have a tangible asset. If I want to buy a house, rent, whatever after... Sell the RV and at least get something back. Or end up loving it and stay longer than expected.

    OR

    2. Do like you say and rent something cheaper closer to work. Cheap places in that city will end up being in a little sketchy areas, but I could have an extra 2 hours a day. If I did that I'd probably trade my car in and get something cheap like a Civic and pay cash since I'm not putting a lot of miles on it. And then I can still get my RE license, etc.

    My only thing is I hate living in the city, I love seclusion and privacy. I'll hate to write out the two ideas and see how much money difference there is for a decision. Ultimately if I'm saving a lot and time to live closer to work, I may end up going that route for a year. I'm okay with the sacrifices at my age

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  • Eric Mwarabu
    Vancouver, WA · Member since 2017 · 1 post · 0 votes
    9y
    Forget about paying off ur car loan. All u need to do is to make sure u have the lowest interest rate u can get on that car loan. If u can buy a house, not sure if ur a 1099 or W2! U make decent money buy a house and get a roommate to help u with ur mortgage. U could have the Rooment live in the basement since u like ur space.
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  • Kathie Rost
    Sedona, AZ · Member since 2016 · 2 posts · 0 votes
    9y

    I understand you are having trouble getting financing for a SFR right now, but maybe after living in the RV for 2 years....? The best move I ever made financially was when I bought my first house. I got a 3BR/2BA house and got two roommates. They essentially paid my mortgage and gave me that safety net in case I lost my job or got sick. I was working a lot of overtime anyway so I hardly saw them. After a couple of years, I made more, so I didn't need them any more.

    To me, driving for 2 hours a day is basically wasting that much of your life!!! I cannot even imagine doing that. If you stop, you'll look around you and be amazed at how much time you have to do useful and fun things, not just work.

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  • Wade Alderson
    Claremore, OK · Member since 2011 · 65 posts · 23 votes
    9y

    Right now I am reading @Scott Trench's Excellent Book "Set For Life". His model is for folks earning $50,000 a year. I don't make that much so the living in an RV thing really makes sense if you are looking to cut living cost to the bone.  

    BTW... I can not recommend the book "Set For Life" enough. 

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  • Melissa McGuire
    Professional · Roseville, CA · Member since 2017 · 174 posts · 31 votes
    9y

    Have you thought about buying a duplex living in one and renting out the other one. That way someone would be helping pay off the mortgage. And when the time is right move out to a different duplex and do it all over again. That way you'd be building you RE portfolio slowly but surely. I don't know it's just a thought.

    d 

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    9y

    Live in the RV close to work during the week and drive it up to the parents on the weekends. 

    If you are single, I don't really see a problem with the strategy. Walmart will let you park RVs in their parking lot. I think your car is on the expensive side. 

    I have said this many times: if I could go back in time, I would have lived in my van, bought a property, lived in it while I rehabbed it, moved back into the van, held the property, bought another property, repeat as necessary until I had so many cash-producing properties that my tenants could pay for my primary. A variation on this is buying a 2/3 plex and living in one side, fixing up everything, once it's done rent out your place and buy another one, repeat. 

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