Planning for full-timing: Financing vs debt free

[LeslieTx]

My initial thought was to pay cash ($10K max) for a fixer-upper Class C to live in full-time, and restore/repair as funds became available; however, after reading several posts about how much extra cash is often required to get a bargain fixer-upper road ready for full-timing, I’ve having second thoughts about my plan.

I wanted to enter full-timing debt free. Now I’m thinking it may be wiser to get something newer (10 years max), get it financed and stash the 10K for emergency/maintenance fund. I’ll be debt free by time I retire (6-8 years) and figure a $500 monthly RV note is doable (can’t find rent for that anywhere, at least not anywhere I’d want to live!).

I don’t want to wait 6 years to start RVing, so, I’m thinking to finance a sub 5K beater to tinker with and do weekend/summer road trips. That way I can start transitioning to life on the road and be able to do some tinkering/remodeling without having to wait 6-8 years for an RV. I’d either live in this starter RV until it died, or sell it for no or little loss, depending how much I put into it. Afterwards, I get something newer and more reliable to go full time. Any one use this approach to get out on the road?

[sandsys]

Not having the skills or patience to do this we never considered it. I suspect a beater RV is likely to need too many things done too quickly for this to pay off. 

Linda Sand

[Barbaraok]

 You've got a few years to get your bank account to a level where you aren't having to purchase a 'beater' - - really cheap RVs will have problems.  You should start with figuring out what your income in retirement will be, what your budget will be, make sure you have all of the bases covered (ie health care) and then determine what you can afford and what combination of cash and/or financing will work for you.   Spend the next couple of years going to RV shows, spending 1/2 hr or more in different types of rigs to learn what might and might not work for you.  Then look at purchasing something to learn on and maybe even start out on that doesn't need a huge amount of work.  Maybe a 5-6 yr old Class C.   

Barb

 

[Kirk W]

Welcome to the Escapee forums. We are happy to have you with us and we love to help new folks so you should be able to get a lot of support. I am thinking that you might benefit from doing some reading about RV living before you make the decision on what to buy. I would either buy from Amazon or visit your local library to see what they may have to offer. I really think that a better knowledge base would help to figure out what is best for you. 

[Smitty77_7]

Good feedback so far:)! 

I will share that as you're doing the budget math on prepping for full timing. Work out the numbers from two perspectives:

1) Debt free as possible. Many feel a great deal of comfort on being 'debt free'. 

---- vs ----

2) Financing part of an RV. As many consider this 'Smart Debt' (Especially still today, as finance rates still are relatively low.). And part of the relatively low interest rates are returned to you via Schedule A, as it is 'your home' so interests rates qualify to be deducted as Mortgage Interest Paid.

Only you can decide what is your comfort zone. Financing, and the cash on hand and hopefully also offsetting some of the financing costs of a mortgage. Plus keep in mind, say a 7, 10 or even 15 or greater loan - the money you're paying out in the future, will be adjusted up/down based upon inflation. Sure, inflation concerns have been absent for several years now, but that cycle seems to always come back around. So a dolor today, could be $00.98 cents in two years. Or $00.96 in 7 years, etc... And that money you did not spend, say $10,000 as you mentioned. Should have grown some, and be worth that much more via inflation. (And to be fair. The unusual soft inflation rate could last for several years to come, or even 'deflation' could take place. Check back with me in 20 years, and I'll tell you for sure which way it went:)!).

Go slow. Do go kick some tires. Do your own math a few different ways - and follow the combo of your heart/head & instincts:)!

Best,

Smitty

[SecondWind]

14 hours ago, sandsys said:

Not having the skills or patience to do this we never considered it. I suspect a beater RV is likely to need too many things done too quickly for this to pay off. 

Linda Sand

What she said. 

 

Cheers,

Ken

[bruce t]

Economics 101 says NEVER finance a depreciating asset. Many folks do. BUT!!! But with an older RV all the depreciation has already been taken by the previous owner/s. Even a 10 year old RV may soon need repairs that will gobble up your reserves.

Calculated gambling!!!

regards

 

[justRich]

The problem with buying "new" is that the manufacturer may have switched components or products in the new model that could be problematic.  You may be stepping into a quagmire of warranty service trips.  You roll the dice.
(Case in point; the Ford 6.0 diesel engine)

With "used", five or six years old, you can find a known product with a reputation history.
Use your available time to go to RV shows where used are sold.  There are some VERY knowledgeable sales people out there (and some extremely dumb bunnies, too).

There are some excellent deals in the used market.  Try here:  http://www.rvnetwork.com/index.php?/forum/25-rvs-tows-and-toads-for-sale/

[Kirk W]

7 hours ago, Rich&Sylvia said:

The problem with buying "new" is that the manufacturer may have switched components or products in the new model that could be problematic.  You may be stepping into a quagmire of warranty service trips.

 

But that same thing could happen if you buy used since you could be buying the headache that someone else gave up on. The only two RVers that I have known who traded an RV that was bought new in less than 3 years of ownership each did so because they gave up on ever getting things repaired. This is much more probable if the RV is one in the lower price structure when new, as both of these were. 

[Lou Schneider]

On 4/7/2017 at 8:09 AM, LeslieTx said:

I don’t want to wait 6 years to start RVing, so, I’m thinking to finance a sub 5K beater to tinker with and do weekend/summer road trips. That way I can start transitioning to life on the road and be able to do some tinkering/remodeling without having to wait 6-8 years for an RV. I’d either live in this starter RV until it died, or sell it for no or little loss, depending how much I put into it. Afterwards, I get something newer and more reliable to go full time. Any one use this approach to get out on the road?

That actually sounds like a reasonable plan.  First, until you spend some time actually living in an RV, it's almost impossible to know what you really want.

A "starter" RV to use now lets you get your feet wet, and lets you tell what aspects of it work for you and which ones don't.

Second, it's very likely your requirements will change once you start full timing in the RV versus using it for short trips while you're working.

Leaving the financing aspects aside, any RV you buy now will depreciate more than $5k - 10k in value by the time you retire in 6 years, so even if you have to invest another $5k in repairs you'll be ahead of the game if you decide to trade it in when you retire.

All of the RVs I've owned over the last 30 years except one have been "sub-$5k clunkers" and they can be very workable as long as you're mechanically knowledgeable.  

This doesn't mean pulling and tearing down engines and transmissions yourself, just having the ability to accurately assess the health of the house and drivetrain and being able to decide whether it's cost effective to repair or replace something or if it's become time to move on to another RV.

[Jimalberta]

Also keep in mind that buying a slightly older high end RV versus a newer but not as well built RV might be worth looking at.

[Pappy Yokum]

Time is on your side - don't rush into *anything*.

Do you have something you can use as a tow vehicle now? (Car? SUV? Truck?)

Instead of purchasing something else with a drive train to maintain, find an inexpensive (used) trailer to tow with your tow vehicle.

Even if your "transportation" is a car - there's pop-up trailers that you can tow with it.

Then - go camping!

Talk to folks in the campgrounds! - Ask questions about their mode of travel and camping......whether it's full or part time.

Why do *they* like what they have?  - Would they own another one again, or "move" to something else?.

When the time comes to "move up" - that trailer should be an "easy sell" and you should be able to recoup most (if not all) of the purchase price.

Inexpensive "learning curve".

 

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[FULLTIMEWANABE]

There's a lot to be said for being debt free and putting that $500/month towards a savings fund for when you do finally hit the road full time.   We're in the camp of maybe towing a lightweight trailer or similar to get a good feeling and exposure to the lifestyle and meeting others out there.    It's all about having fun and experiences, and folks do it in all types and ages of rigs.

[sandsys]

2 hours ago, Pappy Yokum said:

Time is on your side - don't rush into *anything*.

Do you have something you can use as a tow vehicle now? (Car? SUV? Truck?)

Instead of purchasing something else with a drive train to maintain, find an inexpensive (used) trailer to tow with your tow vehicle.

Even if your "transportation" is a car - there's pop-up trailers that you can tow with it.

Then - go camping!

Talk to folks in the campgrounds! - Ask questions about their mode of travel and camping......whether it's full or part time.

Why do *they* like what they have?  - Would they own another one again, or "move" to something else?.

When the time comes to "move up" - that trailer should be an "easy sell" and you should be able to recoup most (if not all) of the purchase price.

Inexpensive "learning curve".

We did this many years ago. In our tent trailer towed with a car we learned that, at that stage of our lives, setting off on 3 week trips and camping in mostly state and national parks while driving through the mountains meant we needed a furnace more than we needed a toilet. Who would have guessed that? It's likely you don't know now what you will prefer six years from now so maybe you are right to go cheap and start the real life learning. After all there is no one right way to go RVing.

Linda Sand