Have you ever thought about chucking it all and taking to the road full-time? My hubby and I have, though now we can't seriously consider it until my daughter is out of high school in a few years. But if you're free to roam, you could join some 1.3 million Americans who live full-time in RVs.
To find out what it takes to be able to afford becoming a full-timer, I spoke with Kathy Huggins. She and her husband, John, have been "living the RV dream" for over seven years and host a radio show by that name at LivingTheRVDream.com. I interviewed Kathy for my radio show, Talk Credit Radio. Here are the Huggins' financial tips for a life on the road in a recreational vehicle.
1. Get organized.
While you're traveling, you'll need to have someone receive and forward your mail to you. That could be a friend, relative or a mail service. The Huggins use a mail service located in South Dakota (more on that choice later) that forwards their mail twice a month.
They also rely on online banking and bill paying. Their phone, credit card and satellite dish bills are all paid online. If there is a bill that can't be handled that way, "a hospital bill, for example" says Kathy, "I leave them a note that I only get my mail twice a month, that I may be late and please do not charge me (a late fee)," she explains, adding that she's never had a problem.
For banking, they use direct deposit and a debit card. To avoid ATM fees, they chose a bank that refunds ATM fees and and often get cash back at the cash register when they make a purchase on their debit cards.
2. Have a (flexible) budget.
Does living in an RV cost less, or more, than living in a traditional home? For the Huggins, it's less. Kathy rattled off her monthly expenses: rig payment, phone bill and satellite television for starters. Camping site fees can range from free to $60 to $70 per night, though, she says that they try to keep theirs at $20 per night.
To keep your electric bill down, avoid staying in one place for months because long-term campers usually have to pay for their own electricity. "Stay for less than a month and they pay the electric bill," she says. Even when the Huggins do pay for electricity, it's pretty inexpensive: about $40 per month, or $80 a month if it's cold and the electric heaters go on. "Remember, we're living in 400 square feet," she adds with a laugh. And while many campsites have free Wi-Fi available, the Huggins spring for their own wireless Internet connection because they need Internet access for their radio show. Cooking their own food and limiting meals in restaurants also saves them a bundle.
As with any budget, there are always surprises. For the Huggins, it's been rising gas prices, which went from $2.99 a gallon to almost $4.00 a gallon at the time we talked. "That's been a big change in our lifestyle," she comments, "but we just spend more time in a campsite. We'll travel maybe 250 miles a day at the most and we might stay (in one place) three or four weeks. We use our car, which we tow, to go see all the things that are around here."
3. Save up for your rig, shop for the loan.
I asked Kathy what it costs to buy an RV that would be comfortable to live in year-round. She says a used motor home will run "right around $100,000 if it's a diesel pusher and about $80,000 for a gas rig. And they're pretty comfortable." The other option is to buy a "fifth wheel" that is pulled by a truck. "You're talking about $40,000 to $60,000," she says, but "then you have to buy a truck to pull it, which can be up to $40,000 for the truck."
Before hitting the road, the Huggins sold their Florida home at the height of the market, which allowed them to get rid of all their debt and put a healthy down payment on their rig. Still, they took out a 20-year loan at 4.35 percent for the balance. That was a few years ago, though, and since then full-time RVers have found it more difficult to get loans. "Try a credit union," suggests Kathy. Or buy your rig before you quit your job. "If you're going to be a part-timer, they don't seem to have a problem giving you a loan," she notes.
4. Get a tax break.
One of the advantages of living on the road is that you can call any state home. The Huggins, like many full-timers, chose South Dakota as their home base because of the tax benefits. There is no state income tax and, as Huggins points out, no property tax since they don't own a home. "South Dakota probably has half a million people that don't live there but are full-time RV-ers because of taxes," she laughs. Tax rates and other details are available in the book "Choosing Your RV Home Base."
Top 5 Highest and Lowest States for Property Taxes
RV Living: How to Make It Without a House
Hoping for lower property taxes? Head south. A 2009 Tax Foundation ranking shows that the 10 states with the lowest property taxes are all in the South. The homeowners there pay, on average, less than $1,000 a year in property taxes, while those in the East can pay more than six times as much.
A Tax Foundation map of states (pictured) shows 16 states, highlighted in blue, where residents pay in property taxes 1.2% or greater of their home's value. The 19 white states fall between 0.65% and 1.20%, while the 15 yellow states pay the least.
But who are the top best and worst? Check out the gallery to find out, starting with the fifth highest state, Rhode Island.
Highest Property Tax County: Newport
Median Property Taxes: $3,932
Median Home Value: $421,300 Residents here use 4.8% of their income, on average, to pay 0.93% of their home's value to property taxes. Recent Home Listing: This townhouse with a cottage feel has cathedral ceilings and a great room. There is a deck overlooking the yard. The home is listed at $450,000 by Ann Ritterbusch of Keller Williams.
Highest Property Tax County: Rockingham
Median Property Tax: $5,244
Median Home Value: $316,200 Residents here pay about 1.55% of their home's value to property taxes, which is about 5.96% of income. Recent Home Listing: This 3 bedroom, 2.5 bath contemporary in Londonderry has a two-car detached garage, a solarium, and a sunroom with a hot tub. The home is cooled by three wall A/C's and ceiling fans. There are finished rooms in the basement. Listed at $319,000 on AOL Real Estateby Ed Oliveri ERA Morrison Real Estate.
Highest Property Tax County: Fairfield
Median Property Taxes: $6,272
Median Home Value: $501,900 The residents in Fairfield County spend about 5.9% of their income paying the property taxes on their homes. About 1.25% of the home's value goes to property taxes. Recent Home Listing: This 1938 home on a cul de sac has 7 total rooms, a vaulted ceiling in the guest bedroom, dormer windows, and skylights. The third bedroom can be an office. The basement is unfinished. This home is listed on AOL Real Estate at $499,000 with Amie Lindwall-Belile of Coldwell Banker.
Highest Property Tax County: Hunterdon
Median Property Taxes: $8,492
Median Home Value: $450,000 Residents here pay about 1.89% of their home's value to property taxes, which is about 7.4% of their income. Recent Home Listing: This 4-bedroom colonial on 1.5 acres in Alexandria Township has a covered front porch and a family room with hardwood floors and fireplace and built in bookcases. There is an office with cathedral ceiling and skylight. This home is listed on AOL Real Estate for $449,000 by Sharon Groben of Weichert Realtors.
Lowest Property Tax County: Jefferson
Median Property Tax: $425
Median Home Value: $80,100 The residents of Jefferson County pay 0.53% of their home's value into property taxes, which amounts to about 1 percent of the area's median income. Recent Home Listing: The living room at this one-story 3 bedroom, 2 bath brick home in Whitehall, AR has a wood beam ceiling and a stone fireplace. Built in 1979, it has a separate dining room and car port. This home is listed at $135,000 by Troy and Kristy Philbrook of Keller Willams Realty.
Highest Property Tax County: Raleigh
Median Property Tax: $341
Median Home Value: $83,000 Residents here use just less than 1% of their incomes to pay 0.41% of their home's value in property taxes. Recent Home Listing: Located in Beckley, WVA., this 4 bedroom, 2 bath homes has an open living room with a fireplace. There is also an enclosed sunroom. Listed at $82,900 by Janice Richmond of Jones & Jordan Realty.
Lowest Property Tax County: Jones
Median Property Tax: $318
Median Home Value: $84,300 The residents here in Jones County spend about 0.8% of their income to cover the 0.38% of their home's value that they have to pay toward taxes. Recent Home Listings: Located in Ellisville, MS, this 1970-built 2 bedroom 1 bath home has a mother-in-law suite on the property. This home is listed at $92,000 by Exit Realty Extreme.
Lowest Property Tax County: Walker
Median Property Tax: $175
Median Home Value: $89,400 Residents here use 0.42% of their income, on average, to pay 0.21% on of their home's value on property taxes. Recent Home Listings: This 3 bedroom, 2.5 bath one-story home in Jasper, AL was built in 1940 and comes with a 10 x 24 utility building. Listed at $99,900 by Gina Trent-McLaughlin of Allen & Associates Realty.
County: St. Landry Parish
Median Property Tax: $140
Median Home Value: $86,900 Residents here use 0.3% of their income, on average, to pay 0.13% on of their home's value on property taxes. Recent Home Listing: This 3BR 1.5 BA brick home in Opelousas has a new roof, a two-car carport, patio, and storage building. The home has an open floor plan with lots of cabinets and large utility room. Listed at $95,000 on AOL Real Estate by Geralyn Charles, Coldwell Banker Pelican.
For a full list of rankings, the Tax Foundation has a chart of real estate taxes paid on owner-occupied housing for each of the 790 high-population counties ranked by taxes as a percentage of home value and one ranked by dollar amount of median real estate taxes). Recent tax news stories: