Please, talk me off the ledge . . . .

[kdflyer]

Tell me where I am wrong, where I have not thought this though. My wife and I are thinking about refinancing our home (we have about $130,000 equity) renting our home out and putting a downpayment on a Class A motorhome (probably an older Newmar) and live in the motorhome while the renter pays the house mortgage. This would allow us to live in the motorhome (same town as our home) and travel on the weekends. This is the only way we can financially afford the mortgage on the house and the motorhome payment. Am I crazy? Am I risking too much at 62 yrs old?

I am interested in your advice, especially if you have been in the same situation.

[MinntoMich]

"While the renter pays the mortgage..." Hmmm... Where do I start.

We had a renter once for our nearly new manufactured home. Had everything worked out contract for deed wise, automatic deposit set up, she was going to pay the lot rent and so on.
Everything should have worked out BUT it didn't. She did not pay the lot rent, stopped making payments to us and never bothered to let us know until we received threatening letters and THEN realized she stopped automatic payments from her account to ours months prior. This happened just as we had moved into a home bought at auction with hopes of renovation.

We had vetted her. She had an excellent job with a decent salary as an executive assistant at a major hospital and even met some of her family. Guess you never know. Maybe our bad, maybe just our bad luck. My advice...
1. Do you know the renter?
2. Expect problems.
3. You ARE going to have problems.

Oh yeah, we even forgave some of the debt and started "fresh". Made no difference in the end. When she moved out she left the place messy and left some possesions to boot which we had to store.

I would not care to EVER repeat that experience.

Wow. Did not think this would turn into a rant.

Go in with your eyes wide open (and your wallet shut). What could possibly go wrong?

[paddler1954]

Why not just sell the house, get a loan to buy the motorhome, bank the equity. This way you don't have renter whoas, if you find RVing is not your cup of tea, you have a nice tidy bank account to purchase another sticks & bricks.

[gmc70]

The wife and I bought our first income property at the age of 21. Is there money to be made being a landlord? Oh ya. BUT there are plenty of headaches that go with that money. We are out of the game now and glad we are after some 40 years. Would I do it again at a younger age? Yes. It is a business and needs to be run like one.

[Persistent]

Originally Posted by MinntoMich

"While the renter pays the mortgage..." Hmmm... Where do I start.

We had a renter once for our nearly new manufactured home. Had everything worked out contract for deed wise, automatic deposit set up, she was going to pay the lot rent and so on.
Everything should have worked out BUT it didn't. She did not pay the lot rent, stopped making payments to us and never bothered to let us know until we received threatening letters and THEN realized she stopped automatic payments from her account to ours months prior. This happened just as we had moved into a home bought at auction with hopes of renovation.

We had vetted her. She had an excellent job with a decent salary as an executive assistant at a major hospital and even met some of her family. Guess you never know. Maybe our bad, maybe just our bad luck. My advice...
1. Do you know the renter?
2. Expect problems.
3. You ARE going to have problems.

Oh yeah, we even forgave some of the debt and started "fresh". Made no difference in the end. When she moved out she left the place messy and left some possesions to boot which we had to store.

I would not care to EVER repeat that experience.

Wow. Did not think this would turn into a rant.

Go in with your eyes wide open (and your wallet shut). What could possibly go wrong?

This sounds typical. My last tally was 30% of renters are like that. The first people to apply to and add are all like that.

I have been in the residential property business for 50 years. The first 20 were a night mare. I am still in it. I learned how to vet tenants. Then congress passed a privacy law. I got grandfathered in. Most small landlords cannot access the data.

Problems are not gone now, but are much smaller. Also the mortgage is paid so cash flow is much more comfortable.

I don't recommend the rental business for armatures. Like any business, it is complicated, regulated, and a total pain in the butt.

[Dutch Star Don]

PERSONALLY, I see a lot of issues with your idea. I buy nice things and have financed them through the years without issue. As I get older, I'm in a better position to pay things off. A rule I've followed was never refinance the house to buy an RV or other large toy. Once the RV is gone, you still have the payment!!

If you can't afford a coach without refinancing, don't forget that borrowing $130K will add about $700.00 a month to your current payment. Will you still be able to rent your house out and cover the house payment with the rent? If you live in the RV, you'll be paying insurance, electric, water and other utilities on both the house and RV.

What if there are some major issues with either the RV or the house, can you afford to do repairs.

I think, reading between the lines, you are trying to do this on a shoe string, which will work as long as nothing goes awry. Maybe you should look at a less expensive RV setup, like a truck and trailer.

Lastly.....just a thought......I have a friend who does not RV, yet he still gets out to see the country. He picked a hotel chain with several brands in the chain and drives to places he would like to see. He stays at this one chain and builds a lot of points and free nights. With a comfortable car, you can easily drive into National Parks for the day and see a lot. Since you say you'll only be going out on weekends, this might be an alternative.

[Crasher]

Get ready to start building a fund to repair all the damage your renter will do to your home. Might be lucky to come out with the same equity you have now. We could rent our AZ home out for $2500 a week during the summer but even that isn't worth the risk. We had rental apartments years ago and saw first hand the damage that 20-39% of the renters can do.

[SLOweather]

Yeah, I agree. Call Dave Ramsey's radio show and ask him what he thinks.

[Skiddy]

i agree with the others. i have had rental properties in the past and even a couple with an agency. there is no way you can guarantee a modest income with only one property. the other thing is taking a loan out for a depreciating thing for something that is good odds will appreciate and you can fall back on if any happens. just my .02 just for weekends it isn't worth it

[Lifemember]

Sounds like a road map to disaster too me. My rule of thumb is, if I need to barrow money then I could not afford it in the first place. Mortgage for primary residency is the exception to that rule. To many IFs that can and most likely will go wrong.

[Solo_RV_Guy]

My opinion, free of charge and worth every penny you paid for it: sell the house and buy the coach, if you really must have an RV. Renting is not for the squeamish or the financially insecure. A couple months without a tenant doesn't stop the taxes, insurance and financing costs so you loose both income and capital. A tenant who skips rent and leaves damaged property also means losses. Managing a property while out of town is frustrating at best.

[Maynard78]

We own our home outright and paid cash for our used 2003 MH. We are considering selling the house in a few years and hitting the road full time. Was going to put our youngest son in the house with his family , but DL nixed that, too small she said. So sell it bank the cash and use it as needed for wintering a bit further south then Tennessee. Maybe in your case doing something similar might work.

[Superslif]

Being a first time "landlord" there will be a learning curve. I kind of agree I would sell the home which we are still in a good housing period, but at some point the economy is going to take a dive.

Is the $130k the "only" funds you have? no savings, no pension, no residual income. Buying used can afford you a decent rig. But you said you would rent the home out and live near by. But you still will have living costs.


If I was in the same position, in my area, I would never rent my home out. It would be trashed in a years time. We live in a very affordable area ( nice homes in the $60-120k range), so if we ever got the itch to full time, we would sell. As being retired, we do take the 1-4 month RV trips and my brother cuts the grass.

[SlowJoe]

Definitely not a good idea in my opinion. Buy a cheaper unit in your price range and leave the house alone. Don't do it!!!