Splurge or Save?

[[email protected]]

Hi Everyone! My husband and I are about to take the plunge into trailer living with our 1 year old. Our goal is to live in a trailer for 1-2 years on a free piece of property our friends have, save as much money as possible, and then quit our jobs and travel the country for a year. (we will NOT be traveling with the trailer. We will travel in a camper van.) My husband and I completely disagree on the type of trailer we should purchase for this new living situation. We need some serious advice from YOU!

His Argument: Make a hefty purchase on a creme de la creme airstream ($50k+). This way, we live really comfortably in a trailer we thouroughly enjoy. Yes, the $500+ a month payment will slow our saving down, making our dream of traveling take possibly a year longer to get to, but it's less then the current rent we pay, so well still be saving and we will be living more comfortably. After living here we can always sell the trailer and get our money back, or continue making payments and use it to live on the road. 

My Argument: Spend very little on a trailer to live in (not necesarily an airstream or our "dream" trailer). I believe we should be able to purchase, and update a trailer to make it livable and aesthetically pleasing for under $12k. Yes, our comfort of living is slightly less appealing than living in a $50k airstream, but it enables us to save save save and be in this living situation for less time. By saving more during this "frugal living" time of our life it allows us to save more, faster, to get us to the ultimate goal (living on the road). 

My question, who's argument do you agree with more?

 

[Dust-In-the-Wind]

Neither actually. Based on the scenario you've laid out, why not find a really nice used Airstream in the $25k range, live in it for a year, maybe do a few upgrades, and after the year, sell it for most of the equity you've got in it? So you've both made good points. Just meet in the middle.

 

[ZoNiE]

If you are going to spend that amount of money, you'll be more comfortable in something more "conventional" than an airstream, like a Keystone or Skyline travel trailer with slide outs, even a toy hauler with a rear garage that has washer and dryer hookups that can be used as a second room. Being cooped up in an airstream with a toddler will drive you insane. You need separate space for you and the kid, and you and your spouse at times.

You will get a better deal on the conventional unit as well.

Also consider a "Park Model" Mobile home, which is basically a 400 sq foot house.

 

[WheelEstate USA]

Common sense would rule my way to go here. The difference in 12K and 50K equals a very nice savings account that is enough for us to go for 3 years at my current retirement income.
Shoot, we know folks out here living on the amount of that Airstream payment.

 

[[email protected]]

Common sense would rule my way to go here. The difference in 12K and 50K equals a very nice savings account that is enough for us to go for 3 years at my current retirement income.
Shoot, we know folks out here living on the amount of that Airstream payment.

Hey Bindi&us -- We dont have 12k or 50k saved at this point. We would be financing the trailer regardless of the cost. It will be our only expense so basically our "argument" is do we want a $500 payment over our head each month to interfere with saving or a $150 payment? Does that make sense?

 

[Almost There]

First of all, Welcome to the forum!

As to who is right or wrong, I'm not going to give you an answer on that one...I know better than to get in the middle of a spousal argument...

AND I sure don't want to burst any bubbles but my instinct is that if you two aren't agreeing on this, it may not have been thoroughly researched and thought out yet. I'm not saying you can't do it and certainly not saying you shouldn't but my first thought was ' Hold on here a minute...

The statement about selling a top of the line trailer - " After living here we can always sell the trailer and get our money back, or continue making payments and use it to live on the road." seriously needs to be examined. Even kept in pristine condition a brand new trailer, regardless of it's name brand, will lose somewhere between 25 and 30% of it's MSRP the minute it's towed off the lot. It's estimated that by the end of year 3 an RV will only have a value on the open sale market of approximately 50% of the MSRP.

Keep in mind that that is for a unit that is in absolutely immaculate condition which I can guarantee that 2 adults living with what is now a 1 year old, it will NOT be!!

Add the loss of value to the cost of borrowing and you have a serious dent in your financial plans.

Then we come to the whole concept of borrowing - the mental and emotional freedom that comes with being debt free and staying that way is absolutely incredible. I can testify to years of debt load while raising a family and the freedom that comes with not owing a penny to anyone. Personally, I can't recommend EVER going in to debt to anyone for any reason.

You also say that you're planning on living rent free on a piece of property owned by friends. What happens if the arrangement gets changed. Depending on friends for rent free living can and does vanish in a heartbeat. What are you doing in exchange for the 'free rent'. Is the property even zoned for a trailer (a lot aren't). How are you going to handle water supply, electricity and waste disposal.

Maybe you have thought through some of these matters and didn't include them in your post but if you two haven't then that's the first place to start.

OTOH, even a trailer that has been used gently by the previous owners will have a 'carefree' life expectancy of about 5 years before things start acting up, the roof in particular. Can you buy a trailer that's in good condition in your area for cash and also put enough in to it to repair and renovate the trailer as needed?

Anyways, those are my first thoughts on the subject!!

Again, welcome to the forum!

 

[[email protected]]

If you are going to spend that amount of money, you'll be more comfortable in something more "conventional" than an airstream, like a Keystone or Skyline travel trailer with slide outs, even a toy hauler with a rear garage that has washer and dryer hookups that can be used as a second room. Being cooped up in an airstream with a toddler will drive you insane. You need separate space for you and the kid, and you and your spouse at times.

You will get a better deal on the conventional unit as well.

Also consider a "Park Model" Mobile home, which is basically a 400 sq foot house.

Hey ZoNiE -- Thanks for the reply. All great advice. I should have included a little more info I suppose. We will have a shared, large backyard, as the property has a house on it that our friends live in. And we live in southern california so we "escape" to the outdoors as it is. Additionally, we will have full access to the laundry facilities so we have a few "luxuries". Do these facts change your opinion or no? Any additional advice or do you still think the above mentioned is a better idea for us?   :blush:

 

[Optimistic Paranoid]

I'm not going to offer any advice either way, but I do want to say that, while I generally agree with what Almost There said about depreciation on most units, that does not necessarily apply to items that are highly collectable, which Airstreams can be.

My brother owns a Lotus sports car that's worth more today than what he paid for it twenty years ago.

God, I wish I could have afforded to buy a Cobra back in the sixties, when they sold for $6,000.  Do you have any idea what those things are worth these days?  Or check out what classic Corvettes are currently selling for.

Regards
John

 

[compassrose]

To start with, Airstreams are not the most comfortable to live in fulltime. They are beautiful. But you lose a lot of space with those curves.

Next... Most RVs are not made to live in comfortably fulltime for more than two people (even if one is a baby).

I suggest that you look for a used trailer that is a couple of years old. This way you will take advantage of the "just off the lot" depreciation. Plus you will be more comfortable remodeling to suit you without worrying about the resale value.

If you actually plan on fulltiming then you need to start paring back your expenses. Specifically your debt. You should not be acquiring debt. RV's depreciate big time. Take your cash and buy used. Watch out for the leaks.

Lots of fairly new RVs are out there for sale. You will be looking at a lot of them. Pick a price that you are comfortable paying. Have cash on hand when you go to look. Make sure any RV you plan on looking at has a clear title and the seller has the title in their hot little hands ready to be signed over. Make sure you are looking at trailers that your vehicle can pull (and stop). You want to be able to go look at a trailer, offer a couple K below the asking price, haggle a little on price before agreeing then make the purchase all right then. Backpacks make a good purse for all that cash.

When we bought the bus, I had the cash all in 20's and in packs of $100 (paper clips). I had it in two groups. One was our bottom 1st offer amount in $100 packs, rubber banded together. The rest was packed in $100 amounts and in other places in the backpack. DON'T FLASH YOUR ROLL! DON"T SHOW THE MONEY UNTIL YOU HAVE AGREED ON THE AMOUNT, YOU SEE THE CLEAR TITLE AND EVERYONE IS THERE TO SIGN IT OVER.

Packs of $100 in $20's are easy to count out. Also I checked the money as I got it from the bank to make sure they weren't passing me bad bills. Invest in a counterfeit pen and look at the security ribbon in the $20. Don't do $100 bills. Not as spendable as $20's.

I've hauled $10K to auto auctions like that. If no one knows you have the money, then you have no worries.

 

[GrantRobertson]

My first question is: Why do you think you need a trailer at all, if you aren't planning on ever moving it?

Second: Have you looked into the zoning regulations on this land? Can you really park a trailer there without having inspectors come down on you.

My third question is not going to be popular: Are you sure your husband doesn't have ulterior motives? Wanting to make payments to go full luxury mode in a travel trailer that will never move, while supposedly saving to go in almost the opposite direction with a comparatively small camper van, really just sounds like a way to delay or eliminate the latter. Are you really sure he is totally on board with the vandwelling plan? Or does he just say, "Yeah, baby. Whatever you want."?

I'm not saying he has to really want to get out on the road or he is bad. What I am saying is that anything less than complete honesty on issues as important as a lifestyle choice of this magnitude can be very bad for a relationship in the long run. It is right up there with whether to have kids or not. If one of you is just going along to get along, resentments will build up.

So, you have to ask your husband what he really, REALLY wants. But you have to make sure he really, REALLY, knows that you won't be judgemental or argumentative, regardless of his answer. Then you figure out where to go from there.

 

[Almost There]

I'm not going to offer any advice either way, but I do want to say that, while I generally agree with what Almost There said about depreciation on most units, that does not necessarily apply to items that are highly collectable, which Airstreams can be.

My brother owns a Lotus sports car that's worth more today than what he paid for it twenty years ago.

God, I wish I could have afforded to buy a Cobra back in the sixties, when they sold for $6,000.  Do you have any idea what those things are worth these days?  Or check out what classic Corvettes are currently selling for.

Regards
John

My points were that any RV will have a lower value than when purchased so the thought that anyone can get back what they paid for it is false thinking.

And yes, some vehicles become collectibles but not in 2 or 3 years which is the time span that we're talking about.

My second thought is that whatever the RV that the OP ends up with, is going to be subject to some really rough living with 2 adults and a toddler. After raising 3 kids I can testify that furniture is going to be beat up, spit up on and maybe chewed on the corners... . Household furniture can be replaced rather easily, not so with the built ins of an RV.

 

[mockturtle]

IMHO, it is unwise to make payments on an RV. If possible, save enough to buy a good used one with cash. Why get something new now, when you aren't really ready, and have it depreciate steeply before you intend to use it for fulltiming?

 

[westriver]

First, you are waaaaay too casual about your thinking regarding the concept of, "it's only $500 a month". The problem is that you are talking about being TRAPPED in that payment for up to the ten year length of the loan. Now, what most fail to realize when signing on to a MORTGAGE for an RV is that they will be "upside down" for many years, often half of the life of the loan, or beyond. So, year three of your plan comes around, you want to move on to the camper van, and it's time to dump the Airstream. You paid $50K, you owe $42K and the dealer isn't offering a dime over $32K. Now you have spent $12K in payments, you are upside down by $10K and your "only $500 a month" is closer to double that, once you dig yourself out of this hole, and do the math. BAD idea from any angle.
In your case, I would find the nicest six or seven year old Arctic Fox brand fifth Wheel, or big travel trailer, that you can. This is a high quality manufacturer, out of Oregon, so there are plenty of used ones in CA. This age will get you into the sweet spot where there will be a huge amount of depreciation already taken on the value, and it's not too old, with big issues, or trouble selling it down the road. Now enjoy the thing for a few years, keep it clean and well maintained, and sell it privately when you are done. The practical usability simply blows any Airstream out of the water, with exponentially more space and more importantly storage, and you will end up spending a fraction of the ill advised Airstream purchase.

 

[akrvbob]

You're right, he's wrong:

1) Airstreams are NOT more comfortable to live in. A medium quality, used trailer with slides will be much more comfortable and cost much less.
2) Sometimes spending more to get better quality is very wise, in your situation it is not because you aren't going to keep it long enough to get the pay-off.
3) If you buy a used one carefully, and live in it carefully, you should be able to sell it with no loss, putting you tens of thousands of dollars ahead on your trip

Most important, the Nomad life requires a total shift in your concept of NEEDS versus WANTS. At it's heart it's adapting a way of life that is simpler and lighter. Some sacrifices will have to be made so you might as well start getting used to that right now.

In my experience, the closer you stick to meeting your needs and minimizing your wants, the longer and better the nomad life works out. The details of what that will look like varies tremendously with every person, but that concept almost is always there for every happy Nomad.
Bob

 

[GotSmart]

Back in 1982, I was in a similar situation.  ~~~~ :s

1...Down payment.  What can you afford?  20% of 50K is $10,000   

2...Living arrangement.  Utilities cost, and running power to a RV is not as easy as just a cord.  CO$T! of up to $1,000  Then there is sewer.  Running it on the ground is not an option. Especially with a child. 

3...What happens if someone loses their job?

4...What happens if the friendship goes south?

5...What happens in a power outage?  I have been in places when the power was out for more than a week due to a major weather event.

6...Do you have the vehicle to move the RV?  

7...Resale value... As mentioned.

I do not recommend this lifestyle for people with young children unless you have experience with the lifestyle.  Making a mistake when it is just adults is one thing. It is extremely stressful to have a child.  Throw in a 8 X 16 living space on top of it~~~ 

 

[highdesertranger]

here is my 2 cents, the new Air Streams(AS) are not nearly as nice or well build as the older ones. go to a RV show and check them out also check out other brands. some RV shows have a retro section that have older Air Streams. I went to one last year and got to see the Air Stream old and new.

listen to what others are saying about buying a brand new AS, you will never recoup your cost. the AS's that are collector items are the older ones.

I say buy a used trailer and pay cash. if you find a good deal you might break even. highdesertranger

 

[GrantRobertson]

If you REALLY want to live in an Airstream those first two years, but an old one and refurbish it while living in it. Then you can sell it at a profit.

Of course that only works if you are capable of very high quality craftsmanship.

 

[SoulRaven]

The odds are that in any city or town in southern California, what you are planning is probably illegal. So this aspect needs to be thoroughly researched ahead of time.

While water and power can have fairly easy solutions, sewer connections can become a costly nightmare. All of these aspects need to be thoroughly researched ahead of time.

You need to plan ahead of time for a Plan B, and maybe even a Plan C, in case all of sudden you need to move from your current location.

If I was approaching your situation, I believe I would be looking to do it as cheaply as possible, meaning a cheap older trailer, one that has already been fully depreciated, and one that I could pay cash for. I did a quick Craigslist search and found some pretty decent looking stuff for under $2500 in the Los Angeles area.

I would also possibly consider some of the other options available too, such as yurts, cargo containers, or maybe an old bus. I really like the old buses because they already have all of the windows built in, and they are not known for leaking like most RV's are.

I'm having a little trouble envisioning two parents and a child living in a van down the road too. Not that it can't be done, but I question whether there wouldn't be more comfortable options available. While a camper van might be an alluring option, it might not be the best choice for a growing family.

For starters just exercise due diligence, and do your research so you don't find yourself in a position where the city comes in and pulls the plug on your plans, leaving you in a pickle.

Good Luck & Best Wishes!

 

[SoulRaven]

Lots of good input here. In order of importance, I would first find out if where you will be parking is legal. If not, someone will most likely turn you in. Next, look hard at "upside down" when it comes to an Airstream. I saw a lot of people end up that way. Continuing to make a payment of $500.00 plus tags/registration and insurance will be a heavy burden on the road.

Having lived this sort of thing where the spouse seems to want to go along with the idea yet doing everything they can to tie the family down, I would have a serious talk with the husband on this. Sometimes dreams don't match up.

You should google for all info "Airstream". The older ones, which is true of most units, were much better built and had less trouble. I went to nada.com and looked at a 2014 Classic, the M-30. The suggested list when it was new was $96,147 without options and the average retail today would be $73,350. It would be considered almost 2 years old at this time so if you paid MSRP, you would have lost $1,000 a month to depreciation and most of the $500 payment would be toward interest.

 

[Patrick46]

WOW....lots of great information on here!!

You're talking of squatting on this property for a year or so, and THEN, hitting the road.

OK...my take...

I agree with EVERYBODY about getting an overly-priced Airstream. As stated, they have very rounded corners that takes away a TON of interior space.

I'm good with a mid-size USED RV, but like others have posted, there's a lot of issues in living in an RV in someone's back yard, and laws don't like this in SoCal...so, unfortunately, you've got this to contend with as well.

Next, you talk about taking your family out on the road in a van.

I'm cool with that, but if that's what you've got in mind, then my suggestion would be to get a small Class 'C' RV, NOW.

Live in that for however long, take it on weekend & vacation jaunts, and then whenever you DO decide to hit the road...you're set to go!

No need to downsize out of whatever camper you've been living in. No need to squeeze your family into a van, and all the downsizing that would take.

You're already living in your new traveling home, and there's plenty of space already established for each of you. (not to mention all the amenities, ie: kitchen, bathroom, sleeping areas.)


BTW...you're a young family. Gotta keep in mind what you'll do if the family suddenly has a new addition!!?? (it happens!!)


Good Luck Kids!!