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Any FBG's live in an RV full time? Thinking about making the move. (1 Viewer)

KCitons

KCitons

Footballguy
My wife brought up the possibility of living in an RV full time the other day. After some discussion the plan could be to rent our house (currently it's paid off, equity is $200k). We should be able to rent it for $1300-1400 a month.  This will generate $16200 in income annually. Taxes and homeowners insurance would eat up $5200 of that. The house has a new furnace, AC, dishwasher, oven, roof, siding, and paint. We would put aside a couple grand for repairs, but I'm not sure how much to budget. That would leave us roughly $9000 in income. 

I'm guessing I have to pay capital gains on the full $16200? 

If I choose to take a loan for the motor home, instead of paying cash, can I deduct any expenses?

What could possibly go wrong with this idea?  (schtick welcome)

 
You would pay regular income tax on the rental income.  

No on the expenses on your motorhome unless you can come up with a business that can somehow work it in.  

 
Binky The Doormat said:
You would pay regular income tax on the rental income.  

No on the expenses on your motorhome unless you can come up with a business that can somehow work it in.  
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OK Thanks,  I was thinking if the motorhome is my primary residence (which is provable through the government charging me taxes on the rental), why not be able to deduct it? I could always take out a mortgage on the rental to buy the motorhome.  Potato/Potahto. 

 
Someone on this board lives or lived in a motor home with his family for quite awhile. If I recall correctly, they homeschooled the kids and cruised around the country.

I forget who it is, but hopefully they will chime in.

Sounds pretty awesome!

 
KCitons said:
My wife brought up the possibility of living in an RV full time the other day. After some discussion the plan could be to rent our house (currently it's paid off, equity is $200k). We should be able to rent it for $1300-1400 a month.  This will generate $16200 in income annually. Taxes and homeowners insurance would eat up $5200 of that. The house has a new furnace, AC, dishwasher, oven, roof, siding, and paint. We would put aside a couple grand for repairs, but I'm not sure how much to budget. That would leave us roughly $9000 in income. 

I'm guessing I have to pay capital gains on the full $16200? 

If I choose to take a loan for the motor home, instead of paying cash, can I deduct any expenses?

What could possibly go wrong with this idea?  (schtick welcome)
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You are assuming occupancy of your home 12 months/year?  I bet it won't be.  I bet you will be at least 1 month/year with no rent payments.  Plus you could get a doozy tenant that does significant damage then disappears.  That will cost you.

 
Dedfin said:
You are assuming occupancy of your home 12 months/year?  I bet it won't be.  I bet you will be at least 1 month/year with no rent payments.  Plus you could get a doozy tenant that does significant damage then disappears.  That will cost you.
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Agree, but these are no different for anyone that rents a house. With having the mortgage paid off, it's not as though I have to cover a mortgage with the missing rent.

The house across the street is a rental. He's had it unoccupied for less than a month the past 5 years.

 
NutterButter said:
Still a long time away, but its something I'm considering as well.   Where do you plan on parking the rv?
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I was hoping you had room in your driveway. I have an extension cord. 

No real plans for long term parking. Would like to travel month by month. Would want to stay within a budget.

 
Long Ball Larry said:
It will vary completely from state to state.

do you pay property taxes in your state?  In some states, the property tax rate is lower for primary residences.
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Not sure. My property taxes go to the county. Am I correct to assume that some of that is appropriated by the state? 

 
KCitons said:
Not sure. My property taxes go to the county. Am I correct to assume that some of that is appropriated by the state? 
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Most likely not.

you are right that it is typically assessed on a county level.

you should contact the county assessor's office regarding the change in property tax rate for a primary residence vs. a rental property.

the homestead exemption is designed to ease the property tax burden on homeowners. 

 
Long Ball Larry said:
Most likely not.

you are right that it is typically assessed on a county level.

you should contact the county assessor's office regarding the change in property tax rate for a primary residence vs. a rental property.

the homestead exemption is designed to ease the property tax burden on homeowners. 
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lol.  in Idaho it's called a home owners exemption.  Taxed amount is 100k less if you live in the property. 

 
Long Ball Larry said:
It totally matters what state you live in.
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No it doesn't if you live in Ohio and that is your primary residence, but you have a vacation home in Michigan you will still pay non homestead taxes in Michigan. It wouldn't matter if you moved from Ohio to Hawaii, then Arizona, Florida, or where ever. If you own that house in Michigan and don't live there you will still pay non-homestead taxes.

 
Long Ball Larry said:
Call the county assessor about it, but here is what appears to be the rule.

http://www.revenue.nebraska.gov/info/96-299.pdf
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Based on that link, I'm not currently qualifying for a homestead exemption. 

The Nebraska homestead exemption program is a property tax relief program for seven categories of homeowners:

1. Persons over age 65 (see page 4);

2. Veterans totally disabled by a nonservice-connected accident or illness (see page 7);

3. Qualified disabled individuals (see page 2 and page 6);

4. Qualified totally disabled veterans and their widow(er)s (see page 7);

5. Veterans whose home was substantially contributed to by the Department of Veterans Affairs (DVA) and their widow(er)s (see page 7);

6. Unremarried widow(er)s of a servicemember who died on active duty (see page 7); or

7. Individuals who have a developmental disability (see page 2 and page 6).

Some would say I qualify for #7.  :lmao:

But I wouldn't be able to prove it. 

 
KCitons said:
Based on that link, I'm not currently qualifying for a homestead exemption. 

The Nebraska homestead exemption program is a property tax relief program for seven categories of homeowners:

1. Persons over age 65 (see page 4);

2. Veterans totally disabled by a nonservice-connected accident or illness (see page 7);

3. Qualified disabled individuals (see page 2 and page 6);

4. Qualified totally disabled veterans and their widow(er)s (see page 7);

5. Veterans whose home was substantially contributed to by the Department of Veterans Affairs (DVA) and their widow(er)s (see page 7);

6. Unremarried widow(er)s of a servicemember who died on active duty (see page 7); or

7. Individuals who have a developmental disability (see page 2 and page 6).

Some would say I qualify for #7.  :lmao:

But I wouldn't be able to prove it. 
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So when you buy the RV and change your residency to South Dakota, your taxes will go up. You can call your township office and find out home much, or they might give you their formula they use to calculate it and tell you to do it yourself.

 
msudaisy26 said:
So when you buy the RV and change your residency to South Dakota, your taxes will go up. You can call your township office and find out home much, or they might give you their formula they use to calculate it and tell you to do it yourself.
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I guess I'm reading it as though I don't qualify for one now. (I'm paying the highest amount) Why would it go up? 

 
KCitons said:
I guess I'm reading it as though I don't qualify for one now. (I'm paying the highest amount) Why would it go up? 
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Check with your township, but I am reading it as if you own 2 homes and want both to qualify under the homestead exemption then you have to meet one the following categories. Each state is different, and I am trying to tell you what Michigan does because this is the only state I have lived in as a homeowner. Nebraska could be totally different.

 
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msudaisy26 said:
No it doesn't if you live in Ohio and that is your primary residence, but you have a vacation home in Michigan you will still pay non homestead taxes in Michigan. It wouldn't matter if you moved from Ohio to Hawaii, then Arizona, Florida, or where ever. If you own that house in Michigan and don't live there you will still pay non-homestead taxes.
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not what I'm talking about

msudaisy26 said:
Check with your township, but I am reading it as if you own 2 homes and want both to qualify under the homestead exemption then you have to meet one the following categories. Each state is different, and I am trying to tell you what Michigan does because this is the only state I have lived in as a homeowner. Nebraska could be totally different.
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now you're on the trolley

 
KCitons said:
I guess I'm reading it as though I don't qualify for one now. (I'm paying the highest amount) Why would it go up? 
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definitely check with the assessor.  If you are currently paying the highest amount, then it should not go up.  It's really not that the taxes go up for not living at the property, it's that they would return to the normal rate.  you may have been receiving a discount for the time that you have been living at the property, if there has been any homestead-type exemption in effect.

 
msudaisy26 said:
I am not sure it is like this in all states, but in Michigan your property tax is based off whether you live in the house. If you don't live there it goes up like 30 percent in Michigan.
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KCitons said:
What if I change my residency to south dakota?
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msudaisy26 said:
If you still own the house, and don't live there then it will be non-homestead. Doesn't matter what state you live in.
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Maybe this will help you follow along @Long Ball Larry .If not next time I can write it out in crayon and rhyme it like Dr. Suess

 
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What's yourRV budget?  A late model diesel pusher is about 140k depending on size and options 

 
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Gopher State said:
What's yourRV budget?  A late model diesel pusher is about 140k depending on size and options 
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I'm not Chet. I Would be looking in the 50k range. There are quite a few in the 35 ft range with 60k miles. But we are in the early discussion stage. 

Class C isn't out of the question either.

 
KCitons said:
My wife brought up the possibility of living in an RV full time the other day. After some discussion the plan could be to rent our house (currently it's paid off, equity is $200k). We should be able to rent it for $1300-1400 a month.  This will generate $16200 in income annually. Taxes and homeowners insurance would eat up $5200 of that. The house has a new furnace, AC, dishwasher, oven, roof, siding, and paint. We would put aside a couple grand for repairs, but I'm not sure how much to budget. That would leave us roughly $9000 in income. 

I'm guessing I have to pay capital gains on the full $16200? 

If I choose to take a loan for the motor home, instead of paying cash, can I deduct any expenses?

What could possibly go wrong with this idea?  (schtick welcome)
Click to expand...
You will be able to depreciate the home once it is used as a rental.  Until it is fully deprecated you should pay minimal taxes on the rental income.

 
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KCitons said:
I'm not Chet. I Would be looking in the 50k range. There are quite a few in the 35 ft range with 60k miles. But we are in the early discussion stage. 

Class C isn't out of the question either.
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Why not just get a travel trailer or 5th wheeler?  You can get nice travel trailers for cheap.   I could never see myself going the class A route.  Not sure what's appealing about them if its just one or two people. 

 
Binky The Doormat said:
You would pay regular income tax on the rental income.  

No on the expenses on your motorhome unless you can come up with a business that can somehow work it in.  
Click to expand...
He can sell knives and wetvacs. Industrial strength power for the home.

 
KCitons said:
I was hoping you had room in your driveway. I have an extension cord. 

No real plans for long term parking. Would like to travel month by month. Would want to stay within a budget.
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Got plenty of room in the driveway but its going to cost you.  This is prime season in northern NJ.   B/c you're a fbg, I'll bump you to the top of the list.

 
KCitons said:
I was hoping you had room in your driveway. I have an extension cord. 

No real plans for long term parking. Would like to travel month by month. Would want to stay within a budget.
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You will learn to enjoy Wal-Mart parking lots. I'm considering doing this myself. 

 
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NutterButter said:
Why not just get a travel trailer or 5th wheeler?  You can get nice travel trailers for cheap.   I could never see myself going the class A route.  Not sure what's appealing about them if its just one or two people. 
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Not out of the question. Wife and I are sitting outside drinking a beer and she asked about a 5th wheel option. (Maybe that was a euphemism)

 
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