Wednesday, March 10, 2010

RV Lifestyle Article : The economics of living in an RV

In an another RV living affordability article, I had performed an analysis in Excel asking the question "Is an RV a good investment".  I had approached that analysis with the STARTING POINT that I would be paying $1400/month already in rent and utilities. I also made an assumption that you had some nominal savings. I picked a number for the analysis of $75K.

My results were a bit surprising. But if you see the analysis, you'll see than living in an RV can be just as good of a 'total asset value' at the end of the analysis period as purchasing a house. Of course Rent isn't even close.

But the mechanisms for value-capture are VERY different. For the RV scenario, the MAJOR value-capture mechanism is saving the difference between the old rent and the cost of the RV site. This is a key behavioral concept. Can you do it?

But I'm not sure how to do the analysis if you can neither afford rent @ $1400 (just a number that is reasonable for many urban areas) or a house.

In some ways an RV would be a spectacular way to live cheaply, live greenly (a new word), and also be prepared in case you need to move. Something so simple as moving from one end of town to the other could mean that you just move your RV to  the other side of town. That one move alone could save $20-100/month in gas. While the MOVE of the RV was not a 'low carbon' event, the savings from driving less every day month after month IS green and cannot be discounted.

Sheri and I thought about this a great deal.

While the RV itself would be expensive - we want a nice one - the rest of the package would not be expensive. For the folks that don't have a great deal of money, I'm convinced that with $5K you could get a pretty decent used RV.

Here are some thoughts and considerations in bullet form that Sheri and I have considered that are important in the RV purchase and living consideration. We'd love to hear from other people. This is in no particular order.

  • When you think RV, you have to think about how you will tow it. You can OWN a truck OR you can rent a truck. I priced truck rentals and they are $100-200/day for short term. That is a very economical way to move your RV and keeps you out of having to own a truck.
  • Sheri and will probably get a truck though. We LOVE Mr Big, but he is a gas truck and we are 100% convinced that diesel is the way to go.
  • We believe that a fifth wheel is the best RV to live in full time. Also we're pretty convinced that we'll be OK driving it. No matter how much we look at the BIG daddy Class A's, the front part seems to use up the square footage. Plus we are simple people!
  • Forgetting about trucks or RV costs, we can live at one of the BEST RV PARKS in Austin for $550 per month, utilities included. It is only a 1/2 mile from the lake, it has all sorts of amenities. So we would save almost $900/month by doing this. Do you know what kind of big rig we could buy with that kind of free cash?
  • Insurance is a wash. Renters insurance versus homeowners insurance versus RV insurance.
  • We are prepared to live in a small space. Puma is too small to live in for two people in my opinion.
  • You have to have a slide-out in the master bedroom. Why? Because if you have a slide, you generally get enough space to walk around the bed and have a reasonable closet space.
  • You probably would want one more slide to make the living area much bigger.

Anyway, these are some thoughts. We'll update this article and repost it to the top every now and then.


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