Author Topic: Family of five looking at selling everything and move into an Airstream  (Read 1036 times)

lifeontheroad

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Hi everyone,

First things first we have been following along MM for a few few years and while making small changes in the past, we are now  getting ready to make a bigger jump towards financial freedom. Our story- we are a family of five, living in a small mountain town in B.C Canada we bought a house here 2 years ago with a small down payment. We are looking at listing our house (the market is hot right now) and for the next 3-4 yrs alternating living life between a small rental house in the winter and living in a airstream the rest of the year. Below is the math we've factored into this being a good decision for us, but wanting to check that we haven't forgotten something. So please let us know if we have!

The Math::
Currently we owe 300K on our mortgage, if we sell for what we think we can, we'll walk away with 100K after mortgage penalty and real estate agent fees. Currently we pay $7,000/yr to interest with only 13,000 going to principal.

Yearly:: In our house
Mortgage + Taxes - 24,960
City utilities - 1,280
Gas - 360
Hydro - 1,836
Internet - 960
= 29,396 (these are all the factors we wont have renting and living in our airstream)
** we also figure there's about 800 in wood for heating, and 7,000 in maintenance that's needed in the near future to our home

Yearly:: In Airstream/rental
Summer seasonal pad rental - 4,100 (includes water, electricity, internet)
Winter rent - 9,000
= 13,100
** both rentals will keep us as close to work as staying in our house
Difference of $16,296/yr

3 yrs- 48,888. 4 yrs 65,184

From selling our house we plan to be able to save 100k add the savings from either 3 or 4 yrs of living seasonally and enter the housing market with a min of 150k. We'd be looking at a smaller house, closer to work and school. Which even if we had to pay 300K for the right home we'd be in a lot better position to pay off our house faster then we are now. Currently we're house poor on one income, with 18yrs left in our mortgage.

We figured all other bills would stay the same which is why they haven't been listed. Our main concerns is that in a hot market we either lose out on holding onto our house, or when the time comes to buy again we have to look at paying significantly more even for a smaller house. While these are what if's, still something we are considering.

There are other factors aside from money that are also big driving factors such as simplifying the way we live and having more freedom to travel with our kids.

Thanks for taking to time to read this, we'd love to hear any thoughts you might have!
« Last Edit: July 25, 2018, 03:47:50 PM by lifeontheroad »

ysette9

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Only you can speak to your personal hot housing market to know how big of a threat being priced out is. In my hot HCOL area if I sold I would never be able to buy back in barring another major housing market collapse. Can you rent out your house instead? Basically selling you are hoping that you can beat the housing market returns with stock market returns. That sounds scary for me over short time frames like 3-4 years.

jambongris

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I don't really have any specific advise for you but you may find the Cyreiously Canadian blog interesting. They're a family of 5 (+ giant schnauzer) who spent 4 months in the summer of 2017 driving across Canada for our 150th anniversary in a teardrop trailer.

We met them briefly as they were driving through our neck of the woods and they seemed to be having a blast.

mxt0133

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I think you are missing a few things in your calculation of how much you will save by selling, renting/Airstream, and then buying again. 

1) The mortgage has a principal component which let's you build equity, I would reduce the mortgage to only include interest
2) Expected appreciation if the house appreciates that is opportunity costs, of course if the market crashes you come out ahead, but whatever your expectations are take that into account
3) Transaction costs, it cost to sell and to buy estimate those

It might come out in the end that you only really save 10-20K, which in the grand scheme of things might be a drop in the bucket.  If you are only doing this for financial reasons it might not be worth it.

However, if you are doing this as an adventure/experience for your family then that same 10-20K is peanuts compared to the experience.  Full disclosure, we bought an RV and have traveled for a few weeks a year across the US.  We are planning a trip to Mexico at the end of the year.  The cost of the RV and traveling while keeping our apartment is worth it to us for the experience.  It might delay FI, but I also do not have plans of not ever working for money.

lifeontheroad

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Ysette9-
Renting our house isn't really an option for us, a few factors such as its solely wood burning and to much of a risk with renters, and then still needing to spend the time getting wood etc. Also the house is in need of new appliances, furnace to a min total of 25 k, and that's if the roof or something unforeseen does not come up.
The real estate market in our local area has been hot for about a year, however I would classify where we live as a lcol area. We are definitely open to the idea of renting for another few years after this period to save enough money to buy a house outright. We've just listed the numbers in a worst case scenario, such as getting in the market again right after. By that time our kids will be in school and we will have two incomes again.

Jambongris- thanks we'll check them out!

Rocketman

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You said airstream I n your post - do you already have the RV?

Have you looked at other - probably cheaper ones???

Calvawt

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can you reasonably get such a short term rental?  The only ones I know of that are less than 12 months in duration are more expensive fully furnished corporate type apartments/houses.

lifeontheroad

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The airstream is a big selling feature for my husband and not something that he'd consider selling our home for otherwise. We've found a slightly older model that fits our needs, is light enough to tow with our truck we currently have and as they retain there value so well its something we can sell after 4yrs close to what we payed for it.

We live in a very seasonal tourism driven town and since we'd only be renting during the ski season here its definitely not unheard of to rent a place for that time frame.