Author Topic: Buying a lot to put an RV on? Pitfalls? Hidden costs?  (Read 2770 times)

nuggets

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Buying a lot to put an RV on? Pitfalls? Hidden costs?
« on: June 02, 2017, 07:57:23 AM »
Hello,

This is my first post in the MMM community, so Hi! The basic idea that I have, is that I can purchase an unimproved property, and an RV, and live a simple frugal lifestyle to help me achieve FI. Rentals in my local area would cost 1-1.3K/month. I have 2 kids, so being a roommate is not an option I would like to do.

I've been thinking that I could purchase a lot, maybe ($50-80K), so a payment of $400 a month or so on a 30 year note (assuming 20% down)...
I think I could purchase a decent RV for $10K or less. I would get one that didn't have a slide out to lessen possible leakage issues. Looking at what's for sale on my local craigslist, I might be able to get a good enough one for $5k with patience and cash...


The lots in the area I am checking out generally are wooded, have city water, but not sewer.

I imagine that I would have some expenses for the following:

1. Setting up an electrical hookup.
2. Connecting to the city water.
3. Some tree removal and site prep.
4. Some sort of septic. Not sure how I would solve the sewage issue.

Are there pitfalls or issues here, that I am not thinking of?

gardeningandgreen

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #1 on: June 02, 2017, 08:37:09 AM »
Depending on where you live winter would be terrible. I live in Minnesota so the thought of living in a terribly insulated camper is not even an option.

Another thing that can be difficult but not impossible would be securing a loan for land that you aren't going to build on. Most banks will require you to begin building on the land within a certain amount of time.

If you are ok living in a small space with your kids and don't live in a cold climate it can be a great idea! My family owns a campground and when I was growing up my family of 5 lived in a 32 foot camper all summer and we had tons of fun. We definitely didn't spend too much time inside because we didn't have internet there and none of us had smart phones!

joonifloofeefloo

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #2 on: June 02, 2017, 09:43:05 AM »
I'm an only-parent with one teen, doing similar research. Here's what I've got so far, from a mortgage broker, a real estate agent, municipal planning rep, etc.

1. Like gardeningandgreen said, many lots in my last area came with stipulations -either the developer's or the (rural or municipal) government's. Build within a year, no RV parked on it until a large conventional house is in place, etc.

2. Sometimes the stipulations are kept quiet until you require them with an offer, so do require them.

3. Ensure the lot has RV access -not necessarily a paved driveway or anything, but an option for physically moving the RV from the last real road to its landing pad. Grading for this can cost.

4. Realtor there suggested $80-$100k (Cdn) for getting lines (sewer, etc) in. Even if you won't need them, the govt may require them.

5. Inside my last city's limits, no septic line was needed; outside septic was needed (with back up field, etc). Not sure if an RV (vs build) would require either. I know one person living in a nonconventional thing, who carries their family's waste to a public park washroom once a week.

6. If if a cold area, child protection may do a song and dance re: living in a colder area, even if you are smart enough to figure out how to do that in a way that kids are safe and well. You may need to consider unnecessary extras for "appearances."

nuggets

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #3 on: June 02, 2017, 10:22:51 AM »
Depending on where you live winter would be terrible. I live in Minnesota so the thought of living in a terribly insulated camper is not even an option.

Another thing that can be difficult but not impossible would be securing a loan for land that you aren't going to build on. Most banks will require you to begin building on the land within a certain amount of time.

If you are ok living in a small space with your kids and don't live in a cold climate it can be a great idea! My family owns a campground and when I was growing up my family of 5 lived in a 32 foot camper all summer and we had tons of fun. We definitely didn't spend too much time inside because we didn't have internet there and none of us had smart phones!

Thank you. I am in south east VA, so the winters are pretty mild here. Most of the winter, it's above freezing during the day. I think that I can probably make do with limited heating, electric blankets, and stoicism.

I didn't realize that the loan requirements for land would be different, thank you for the heads up.
I found this article on the subject: http://www.bankrate.com/finance/mortgages/what-you-should-know-about-land-loans.aspx

I'm an only-parent with one teen, doing similar research. Here's what I've got so far, from a mortgage broker, a real estate agent, municipal planning rep, etc.

1. Like gardeningandgreen said, many lots in my last area came with stipulations -either the developer's or the (rural or municipal) government's. Build within a year, no RV parked on it until a large conventional house is in place, etc.

2. Sometimes the stipulations are kept quiet until you require them with an offer, so do require them.

3. Ensure the lot has RV access -not necessarily a paved driveway or anything, but an option for physically moving the RV from the last real road to its landing pad. Grading for this can cost.

4. Realtor there suggested $80-$100k (Cdn) for getting lines (sewer, etc) in. Even if you won't need them, the govt may require them.

5. Inside my last city's limits, no septic line was needed; outside septic was needed (with back up field, etc). Not sure if an RV (vs build) would require either. I know one person living in a nonconventional thing, who carries their family's waste to a public park washroom once a week.

6. If if a cold area, child protection may do a song and dance re: living in a colder area, even if you are smart enough to figure out how to do that in a way that kids are safe and well. You may need to consider unnecessary extras for "appearances."

Thank you. I'm assuming you are in Canada?


Sounds like I've got more homework to do.

Another option that might work for me, is to buy a distressed property, and live in the RV while I fix up the house.

Here's an example shot from a local listing... The house is obviously uninhabitable.


joonifloofeefloo

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #4 on: June 02, 2017, 10:34:00 AM »
Yes, I'm in Canada, though the last while in its warm/warmest areas.

re: Loans. Broker told me I could borrow a higher ratio of the price if inhabitable house on it. I think for empty land, I would need to provide 50% of the purchase price.

Cadman

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #5 on: June 02, 2017, 11:04:02 AM »
A couple random thoughts from a guy with some experience.

I like the distressed lot/home idea because you potentially have easements for power, sewer and water. If it has a septic, check into local regs to make sure it's compliant or you'll have to foot the bill to bring it up to code. The other thing this plan has going for it is it might be easier to finance if there's already a house there.

If looking just at a lot, check the rules and cost for utility and road access. Don't underestimate the cost of putting in a road/drive, it can easily get into 5-figures. If financing doesn't work out, and the lot is held privately, often times a contract purchase can be arranged with similar terms directly with the owner (x% down and an agreed upon rate).

You had mentioned an RV, but I assume you mean mobile home or 'park model'. Not a bad way to go in warmer climates, and if you ask around, they can be had for FREE if you arrange transport. Just check with any local MH park offices and you'll find deals. 


nuggets

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #6 on: June 02, 2017, 11:32:53 AM »
Yes, I'm in Canada, though the last while in its warm/warmest areas.

re: Loans. Broker told me I could borrow a higher ratio of the price if inhabitable house on it. I think for empty land, I would need to provide 50% of the purchase price.

Thank you, that's good to know.

A couple random thoughts from a guy with some experience.

I like the distressed lot/home idea because you potentially have easements for power, sewer and water. If it has a septic, check into local regs to make sure it's compliant or you'll have to foot the bill to bring it up to code. The other thing this plan has going for it is it might be easier to finance if there's already a house there.

If looking just at a lot, check the rules and cost for utility and road access. Don't underestimate the cost of putting in a road/drive, it can easily get into 5-figures. If financing doesn't work out, and the lot is held privately, often times a contract purchase can be arranged with similar terms directly with the owner (x% down and an agreed upon rate).

You had mentioned an RV, but I assume you mean mobile home or 'park model'. Not a bad way to go in warmer climates, and if you ask around, they can be had for FREE if you arrange transport. Just check with any local MH park offices and you'll find deals. 

Thanks, I'm starting to think that the distressed home route may be the best. A property like that already has water, power, and sewage. It's probably cheaper to fix an existing septic system than to put a new one in. I'll bet that the neighbors would appreciate a guy living in an RV (not mobile/park home) a lot more if he's fixing up an eyesore house while living in the RV.

gardeningandgreen

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #7 on: June 02, 2017, 11:49:43 AM »
Depending on where you live winter would be terrible. I live in Minnesota so the thought of living in a terribly insulated camper is not even an option.

Another thing that can be difficult but not impossible would be securing a loan for land that you aren't going to build on. Most banks will require you to begin building on the land within a certain amount of time.

If you are ok living in a small space with your kids and don't live in a cold climate it can be a great idea! My family owns a campground and when I was growing up my family of 5 lived in a 32 foot camper all summer and we had tons of fun. We definitely didn't spend too much time inside because we didn't have internet there and none of us had smart phones!

Thank you. I am in south east VA, so the winters are pretty mild here. Most of the winter, it's above freezing during the day. I think that I can probably make do with limited heating, electric blankets, and stoicism.

I didn't realize that the loan requirements for land would be different, thank you for the heads up.
I found this article on the subject: http://www.bankrate.com/finance/mortgages/what-you-should-know-about-land-loans.aspx

I'm an only-parent with one teen, doing similar research. Here's what I've got so far, from a mortgage broker, a real estate agent, municipal planning rep, etc.

1. Like gardeningandgreen said, many lots in my last area came with stipulations -either the developer's or the (rural or municipal) government's. Build within a year, no RV parked on it until a large conventional house is in place, etc.

2. Sometimes the stipulations are kept quiet until you require them with an offer, so do require them.

3. Ensure the lot has RV access -not necessarily a paved driveway or anything, but an option for physically moving the RV from the last real road to its landing pad. Grading for this can cost.

4. Realtor there suggested $80-$100k (Cdn) for getting lines (sewer, etc) in. Even if you won't need them, the govt may require them.

5. Inside my last city's limits, no septic line was needed; outside septic was needed (with back up field, etc). Not sure if an RV (vs build) would require either. I know one person living in a nonconventional thing, who carries their family's waste to a public park washroom once a week.

6. If if a cold area, child protection may do a song and dance re: living in a colder area, even if you are smart enough to figure out how to do that in a way that kids are safe and well. You may need to consider unnecessary extras for "appearances."

Thank you. I'm assuming you are in Canada?


Sounds like I've got more homework to do.

Another option that might work for me, is to buy a distressed property, and live in the RV while I fix up the house.

Here's an example shot from a local listing... The house is obviously uninhabitable.



Just make sure that you are careful when it does go below freezing or put some skirting around the bottom of the RV. If you don't you can easily break pipes and cause quite a mess! As long as you can live together comfortably it sounds like a great plan!

Cadman

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #8 on: June 02, 2017, 03:06:29 PM »
Ah, if RV and not mobile home, then distressed house is the way to go. Around here the utilities will not  provide service if there isn't a viable "permanent" structure on the lot as they don't think they can get payback for their installation (primary, xformer, trenching/setting posts and meter pedestal).


Rockies

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #9 on: June 03, 2017, 10:10:55 PM »
The other thing about buying a distressed house and fixing up is you might eventually grow out of living in an rv in 3-5 years time and be very grateful about the house. Over time your opinions will change and you dont want to have to sell your lot just a few years after moving in if you decide its too small for the family.

Obviously you will want to really price out the cost and time that it would take to rehab the house before you make that descision.

nuggets

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #10 on: June 04, 2017, 09:06:36 AM »
Hey everyone, thank you very much for the well thought out replies.

I have also found that getting a loan for an uninhabitable house could be similar in difficulty to getting a land loan.

What could go wrong?

Here's relevant pic:
« Last Edit: June 04, 2017, 09:08:32 AM by nuggets »

joonifloofeefloo

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #11 on: June 04, 2017, 09:40:29 AM »
:)))))

And yeah, I think the banks see an uninhabitable house same as no house, in terms of loans. Basically, they'll loan more on something they believe they can sell quickly if we default.

geodude

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #12 on: June 04, 2017, 01:28:03 PM »
Very curious to see how you work this out.

I've been wanting to go the tiny house on a trailer route but struggle to figure out how I'll find land I can put it on without issues, and with utilities.

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Fishindude

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #13 on: June 05, 2017, 08:36:11 AM »
$50-80K for a lot, $10K purchase of an RV, then $400 a month expenses?

I'd think you could set yourself up in a house trailer park much cheaper and much more comfortably than any RV.

joonifloofeefloo

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #14 on: June 05, 2017, 08:43:28 AM »
Opportunities and costs definitely vary by region. Where I am, the following variables factored in:

1. House trailer park was $750/mo pad rental, plus $60k-$80k for the trailer, in a shitty park that's likely to be torn down soon.

2. RVs are much more easily moved.

3. RV parks are $400-$900/mo (low to high season), in beautiful (or ugly) spots.

4. Some lots (RV or mobile home) are horrible; some are lovely. Getting out of a smokey or loud park would be a high priority for me.

I'm leaning toward a brand new $70k RV in a $400-$900/mo lot. I know brand new is generally nuts, but may be the way I go regardless.

Cadman

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #15 on: June 05, 2017, 12:23:28 PM »
I'll throw in a few more cents in response to your post about buying an RV new. The build quality on RV's, MH's and TT's has not improved AT ALL in the past few years. I'm talking about major defects such as leaky seals around lights causing rot in walls, loose plumbing and electrical connections, poorly secured trim and other recalls, even on the $100k+ brands. Your best bet is to aim for one that's 2-3 years old and has had all of that work done already.

Goldielocks

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Re: Buying a lot to put an RV on? Pitfalls? Hidden costs?
« Reply #16 on: June 07, 2017, 12:57:13 AM »
Try for a construction / builders / renovation type loan.   

For these, you get upfront loan money, then the rest of the loan in installments as the home progresses.  OR, you may be able to get the contstruction portion as a line of credit, that you draw down on only as needed.   That would be ideal, as you may choose not to draw any down after you get the land.