Should you live in an RV? Here’s why some young people are ditching homes for the nomadic life.
The days of living in the same home until you retire are becoming as outdated as that pair of denim jeggings stashed in the back of your closet. Some millennials are ditching the notion of the white picket fence altogether and opting instead for a home that will travel: better known as a recreational vehicle or “RV.”
To cut expenses — think, five-figures for a used RV versus six-figures for a home — and live less tethered to one city, young people are increasingly drawn to the “house on wheels” concept. The chance to take road trips without paying for hotel rooms and restaurant meals doesn’t hurt either.
RV ownership is at an all-time high, with more than 9 million households owning an RV as of April 2017, according to the Recreation Vehicle Industry Association. With ownership up 16% since 2001, buyers between the ages of 35 to 54 make up the largest share of owners.
What would prompt someone to reject the age-old tradition of home ownership? For Chris Trenschel and Tamara Murray, who moved out of their California condo and into a camper van, it was the desire for more meaningful life experiences. “We were dead inside,” Murray told Vice in February 2016. “Travel, learning about new cultures and meeting new people, having meaningful experiences — that’s what is important to us.” Like many millennials, Trenschel and Murray began working remotely so they could travel as much as possible.
Other young professionals have similar stories, where they had previously established what appeared to be the perfect life, only to discover that instead of owning possessions, the possessions owned them. Selling everything, finding remote work and purchasing a house on wheels, such as an RV, trailer or motor home, pushed the reset button on their lives and allowed them to embark on a new life adventure.
What are the upsides to buying an RV?
The movement to bypass or delay a traditional home purchase makes sense as millennials prefer experiences over things. Millennials “aren’t spending our money on cars, TVs and watches,” Taylor Smith, CEO and co-founder of employee benefits firm Blueboard told CNBC. “We’re renting scooters and touring Vietnam, rocking out at music festivals or hiking Machu Picchu.” In fact 78% of millennials in a 2014 Eventbrite poll said they would rather spend money on an experience rather than purchasing an item.
This includes young families like the Podlahová family, who purchased an RV so they could see the country from their RV. While the family lives in a condo in Foster City, California, Michelle Tsai Podlahová said in an interview they purchased their RV so they could continue to camp and enjoy nature with their two young sons.
“We decided to get one because we used to camp and hike before we had kids and still wanted to do it with them,” she said. “Camping is really difficult with little ones, but the RV allowed us to still be in nature, but with the added comfort of having our own bathroom, shower and being able to cook food.” Podlahová and her family love their RV so much, they decided to ditch a traditional Christmas this year and instead spend the holiday traveling the countryside with the kids in the RV.
What are the real costs of RV life?
Aside from the allure of travel, RV or mobile living can save you over $139,000 over 15 years, according to calculations from the travel site Wand’rly. First off, a used motorhome can be relatively affordable, with an average cost of about $35,000. But even a new RV would save you money.
Consider this example: You purchase a home for $343,000 (the average home price in 2015), which includes a monthly mortgage payment of $1,310, utilities at $240, property taxes at $150, insurance at $50 and homeowners association fees for about $300 per month. Over 15 years you end up paying around $437,600. (This estimate does not include gas or parking fees.)
Compare this expense to purchasing a new motorhome, which goes for about $122,000. Your monthly payments could be a little higher at $1,380, but you don't have to worry about utilities and property taxes. Insurance could run about $135 a month. Over 15 years, your total approximate expense is $297,900. That’s $139,700 less than you’d spend on your home.
For those interested in just using their RV for a vacation, you still save cash. A party of four traveling by plane, renting a car, eating meals in restaurants and staying in a hotel would spend about $4,045 for a seven-day trip, according to Recreation Vehicle Industry Association estimates. Travel by RV, on the other hand, can get your costs down to $2,035 for a seven-day vacation, for a savings of over $2,000. (This excludes the RV purchase price.)
Before you buy
While you can save money on travel and homeownership living in an RV, do your research before taking the plunge. Here are four key things to consider:
1. Rent before own
If you aren’t 100% sure RV life is for you, rent one for a period of time to see if you like it, Go RVing.com suggested. Typical rent prices can range from $50 to $450 per night for a newer motorhome, RV Share reported. This will also help you figure out which amenities are most important to you and how much you can afford.
2. Decide whether to buy new or used
While a used RV will be significantly less expensive, consider some of the same factors you might ponder if you were to purchase a new or used car. Before purchasing a used RV, consider depreciation, if the vehicle is under warranty and if you can spot any unknown damage, TripSavvy advised.
3. Have a parking spot
Unless you live in a suburban or rural area that allows you to park your RV in your driveway you’ll have to consider where to keep it when you aren’t traveling. RV parking spots can run anywhere from $50 up to $450 a month depending on the size of your RV and needs, Storage.com stated.
4. Factor in extra costs
Maintenance, gas and the sales tax on your initial purchase can all add up. Gas is surprisingly expensive since most RVs only get six to eight miles to the gallon. That means you could drop as much as $10,000 on a 20,000 mile trip around the country, Kiplinger estimated. Maintenance costs include $2,500 for tires, $1,700 to replace carpets, $182 for a new toilet and $120 to upgrade your thermostat, according to AxleAddict.com.
Is the nomadic life right for you?
After you’ve figured out the practical side, it’s time to do some soul searching on whether RV life is really what you want. Although you can save cash and travel, it’s wise to have a serious talk with your partner (and yourself) about whether life on the road is your true calling. Make sure you can deal with living in a small space without a large shoe closet and room for a lot of clothes and accessories, as well as put up with your partner's items or clutter.
No matter how fun it might sound to travel at the drop of a hat, it’s definitely not for everyone. “Trulia’s research shows that many millennials would rather live in a more traditional home and neighborhood,” Lynnette Bruno, Trulia’s real estate and lifestyle expert said in an email. “The inclination that we see among young adults to live in RVs, yurts, shipping containers, micro-apartments and tiny homes is more of a reflection of how hard it is to find and buy an affordable home in today’s market.”
Be realistic about the nuisances you may encounter. Those with olfactory issues may be put off by some smells that are amplified in a small space, plus you may have more mold and mildew than what you’d find in a regular home, the RV Nomads notes. You may also encounter noisy neighbors at some campgrounds, and you should be open to rotating through a variety of doctors, dentists and mechanics, since you’ll be moving a lot.
But for those who find the journey to be more exhilarating than the destination, RV ownership may be ideal for you. Just do your homework and have a budget to ensure you can not only afford to purchase an RV but maintain it for years to come.
Sign up for the Payoff — your weekly crash course on how to live your best financial life.