Although we don’t live on the road in our motorhome we have over the last year spent probably over half the year on the road in ours and during that time we have met a large number of people who do live full time on the road. Some of these people have sold their house to purchase their motorhomes and others have retained the house while renting it out and then starting their journey. So this blog is all about whether to sell or not sell.
For a lot of people, their home is their most significant single asset and one that they have spent years making the mortgage payments to the bank for. That has got them to the position where they now have an amount of equity in the house that will allow them to make lifestyle changes should they wish. Some people will look at this equity and think that if they sell their property and buy a motorhome, they can have the good life without the stresses of homeownership.
So should you sell your home or primary asset to purchase your dream motorhome? Of course, this is a decision that you must make yourself, but hopefully, this blog will give you a couple of pointers along the way. I should state that I am personally against doing this but would respect everyone’s right to make their own choice.
One thing that someone not that long ago told me, was, why would you swap an appreciating asset (house) for a depreciating asset (motorhome)? It’s an excellent question. Although property prices in New Zealand have risen dramatically over the last few years in larger cities and towns there are still areas of New Zealand where you can purchase a house for under $200K so it may be that by selling your million dollar shack in Auckland you can buy a palace in places like Reefton and still have a place to call home whilst putting money in the bank.
It’s that money in the bank that is the attraction to a lot of people but in today’s environment of low-interest rates is that really the best place to hold your cash. In my view, if you are just in the process of considering this option, I would be looking at renting my house out for 12 months to ensure that the lifestyle is really the one that I wanted before selling my primary asset.
It’s essential to remember that a couple of weeks holiday in a motorhome or caravan is a lot different to living in it especially when winter comes around and you are in a space that might not appear to be much larger than a broom closet. Just because you imagine that you are going to enjoy the lifestyle doesn’t mean that you actually will or you might, but your partner hates it.
Of course, it’s not all doom and gloom in winter several campgrounds offer discounted rates for an extended stay during the winter months. These have power, onsite laundries etc. so other than the smaller living space it’s a bit like being at home. Others we have met retreat to family properties over the winter staying with their children or other family members sometimes inside the van inside the property.
Ask yourself a fundamental question. What would happen if my partner or I had a severe health issue that required extended treatment such as chemotherapy? Speaking from personal experience, I can tell you that this can come out of nowhere requiring months of treatment. Where would you stay if you no longer own your house? Although this question also applies if you have rented out your home on an extended lease.
It’s not just sickness that you need to consider. None of us are getting any younger what happens as you get older and less able to take care of yourself. If you have sold your primary asset and had the same motorhome for several years, the value of that motorhome will likely have severely diminished. How will you cope if you have to give away the lifestyle and move into rented accommodation so that your health issues can be dealt with?
You might say well I can stay in my motorhome, and this might be true, but if you can no longer drive and your mobility is reduced, how will you cope with getting in and out. Making hospital appointments etc. Often campsites, where you can stay permanently, are situated well out of town and miles from the hospital and associated medical services. So just another thing to consider.
Not something that you probably want to think about but every one of us will have our name written on one of these at some stage. So make sure that your planning considers what would happen if the worst occurs. Can the motorhome be driven by both of us? My wife always teases me that she will just find a new boyfriend who will drive it for her! How sale-able would it be if we wanted to sell it? – Just another point or two to consider if you are at an age where you are attending the odd funeral.
You also need to consider that if you are renting out your home, are there any severe maintenance issues that need to be sorted. You don’t want to be at the other end of the country with a tenant constantly phoning you about ongoing repairs that are required to the house. It’s so much easier if you can deal with this before you hit the road or of course if you no longer own the home then you no longer have the worry.
If you do sell your house and spend a few years on the road, it will be most likely that capital gains in the area where you lived prior will have been such that you won’t be able to get back into the city. Can you live with this? If not the renting out the house is probably the only answer.
What happens if you still have a mortgage? There is no reason why you cannot always rent out the house and proceed with your plans provided that the rent is going to cover the payments perhaps with some leftover to add to your spending money along the way. With today’s low-interest rates, you probably need to factor in or at least look at what would happen if interest rates rise.
If you are not sure what your property would rent for speak to one of the local real estate agents and ask them. Although you will lose around 8 – 10% of the income in management fees if you hand over control of the property to them you will at least not have to be troubled by some of the day to day stuff that goes with renting out a property.
Of course, not everyone reading this will own a house, and we have met several people on the road who had been renting and found it more comfortable and a lot cheaper to adopt a lifestyle on the road. Purchasing a motorhome or caravan rather than to try and buy a house in one of the leading centres of New Zealand.
A big part of this decision will be your employment or retirement situation. If you are currently employed is your job one that you can take on the road with you and work remotely while still bringing in a decent income? Enjoying the lifestyle that goes with being on the road. If you are retired and receiving the pension will this be sufficient to keep you going on the road – covering diesel, insurance, camp fees etc. Most likely it will, but what have you got left in the tank for emergency events. A severe event such as the engine blowing up in your motorhome could be upwards of $10,000 to repair!
This whole change is one that can bring with it a considerable amount of unintended stress with some people that we have met underestimating the amount that is required to live on the road or finding that getting a job when needed wasn’t as easy as they thought that it might be. So ask yourself, have we properly thought this through. Have you done your research thoroughly and how will I cope if …….
Whatever you decide to do the social aspects of motorhoming are all that you might want them to be and getting away from your house for an extended time on the road will allow you to make new friends and share stories about places that will become must visit or must avoid!
The social aspect of motorhoming is quite unlike living in a house in a major city where it’s unusual to actually know your neighbours, when you are motorhoming you will find that in a lot of cases your neighbour will introduce themselves to you and if they don’t then you probably will to them.
Living on the road is not quite a permanent holiday. Still, if you go in well prepared and have thought these things through clearly and had an honest and open discussion with your partner (if you have one), then I am sure you will find it a lifestyle that suits you just need to make the decision about your house.
I wish you the best with your decision. I wrote this to set you thinking not to provide all the answers as everyone’s circumstances are different, and each person has their own goals. If you would like to contribute to this discussion, please feel free to leave a comment below or make a post on the Facebook page.
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