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Living in a trailer to pay off student loans
Hello All -
I am at a crossroads and wanted to get your opinions…
My situation: I graduated 3 years ago with $65,000 in student loan debt and have since narrowed that down to $35,000. I'm sick and tired of paying student loans / living in debt. Never again will I take out a loan.
In order to pay off these loans the quickest, I've contemplated swallowing my pride, accepting the ridicule, and buying / renting a trailer so my monthly living expenses are minimal. Thusly, reducing my student loan debt very quickly.
For anyone who is experienced with trailers, would it make more sense for me to just buy one outright or rent one?
Any information is helpful.
Thanks!
I can't offer you experience on the trailer. And I don't want to sound like I know what financial path is best for you. But, what's wrong with your current arrangement if you've knocked $30K off in 3 years? What happens after you pay off your student loans - are you going to save up enough money to buy a house for cash? I see debt (leverage) as necessary to grow and make this life all you can make it. That doesn't mean be an idiot with your credit card, but you don't appear to have that issue. It took me ten years to pay off school debt and I had half of what you had. But it's paid off now, and I was still able to squeeze in a wife and primary residence purchase during that time. Best wishes!
Hello Mike,
First I applaud your determination. If your comfortable with it I would say do it. Your friends (? real friendship) may ridicule you, but in the long run it will put you way ahead of your peers, and strengthen your financial and future base.
I would not rent the trailer, Lets make it a investment opportunity, Buy now then when your done sell it or do a lease option with it. Trailers are a easy way for folks to own a property. Will lease very easily for you.
Just make sure where you buy is ok with this and your lot rent is not to costly.
Good Luck
and Keep up the excellent thinking.
I have many goals in life and every day that goes by with unpaid debts only slows me down. Life only has a finite number of days in it and I want to live as many days as possible debt free. I feel constricted with loans.
Yes, I do agree that I've been doing well with paying off my debts but I do not want to wait another three years to pay them off before I begin to save up to buy a house. I hate renting and would rather build my equity / wealth instead of pissing it away.
With that being said, a mobile home has become a serious thought and I have no shame in doing so. So for anyone with mobile home experience, would it be better to rent a mobile home or just buy one outright?
Originally posted by @Account Closed:
Hello Mike,
First I applaud your determination. If your comfortable with it I would say do it. Your friends (? real friendship) may ridicule you, but in the long run it will put you way ahead of your peers, and strengthen your financial and future base.
I would not rent the trailer, Lets make it a investment opportunity, Buy now then when your done sell it or do a lease option with it. Trailers are a easy way for folks to own a property. Will lease very easily for you.
Just make sure where you buy is ok with this and your lot rent is not to costly.
Good Luck
and Keep up the excellent thinking.
Thank you, Sydney. Your thought process is in synch with mine. If I were to buy a mobile home, then I would rent it out after I'm done with it or sell it. Other than the cost of the mobile home, what other costs are associated with a mobile home? (i.e. lot costs, how much do those typically run?)
Definitely buy the mobile home, then you can rent it out when you are ready to move on. I've never sold any home I've bought because I just move and rent out the previous residence for cash flow.
Originally posted by @Mike Rubin:
Originally posted by @Account Closed:
Hello Mike,
First I applaud your determination. If your comfortable with it I would say do it. Your friends (? real friendship) may ridicule you, but in the long run it will put you way ahead of your peers, and strengthen your financial and future base.
I would not rent the trailer, Lets make it a investment opportunity, Buy now then when your done sell it or do a lease option with it. Trailers are a easy way for folks to own a property. Will lease very easily for you.
Just make sure where you buy is ok with this and your lot rent is not to costly.
Good Luck
and Keep up the excellent thinking.
Thank you, Sydney. Your thought process is in synch with mine. If I were to buy a mobile home, then I would rent it out after I'm done with it or sell it. Other than the cost of the mobile home, what other costs are associated with a mobile home? (i.e. lot costs, how much do those typically run?)
Lot rents can range from 150 to 300 all depends on the quality of the park.
Remember your trailer needs to serve to purposes,
Your ability to cut expense and re renting it or selling it on a lease option.
I personally think you should keep paying it off as you are, but I can relate with wanting to get out of the student loans. Honestly i would suggest grounded manufactured homes, grounded meaning with land. You can find them for sale for next to nothing on any realty site, so the rent won't be much higher if you find a good deal. Also, they will rent out for more when and if you choose to rent it out after moving.
@Mike Rubin you seem to have your mind set on paying off these student loans ASAP and it's your money, so I won't argue that point. If owing money affects your ability to sleep at night, by all means pay it off.
My point will be for the benefit of a different perspective for readers here to learn about the factors to consider in real estate and other financial matters. If I had a 35k student loan at say 6% or less, and I had 35k in hand or coming soon, I have a couple of options.
I could pay off the student loan and save the 6% or less. Then save up until I have enough to invest again.
On the other hand, if I know how to invest in real estate, where I can consistently make double digit rates of return, often over 20%. If a person understands the basic math and doesn't mind having some low cost debt (as opposed to high cost consumer debt like credit cards, car/payday loans etc.) you are much better off investing your money elsewhere and paying back the debt over time or at a later opportunity.
As much as I like most of Dave Ramsey's material, I think the "live debt free" idea, is extreme and comes at a significant opportunity cost at today's rates of interest.
I like the idea of buying a mobile home with land. Look for a distressed property/seller and get a real discount. When you are ready to move on, you can rent it out, or sell on terms.
In my opinion, you are almost always better off buying than renting. One day you can rent out your mobile.Don't buy it with land that way it will not be expensive for you when you are at this junction in your life of trying to start your life and pay off your debt. Keep in mind, you can also buy a small home and rent out rooms if you are adverse to mobile homes.
Mike,
No advice, really. I just thought it was funny that buying a trailer would subject you to ridicule. What kind of people are you hanging out with? Apparently a better class than I hang with. :)
Mobile homes are my investment niche and I've lived in several over the years and still live in one now (on land not in the dreaded "trailer park").
Mike,
Like others here, I see you doing very well to have paid off as much as you have in only 3 years. It took my wife and I 10 years each.
There are different avenues you could take. A mobile home could be a good option. Others here have great advice for you about that. Another option would be to purchase a duplex, rent out half and, if your lifestyle allows it, get one or more roommates.
As for being loan free, there have been a lot of good people over my lifetime who've advocated a loan free life. But, to do so, unless you're already wealthy, would require a lot more sacrifices than living in a mobile home. How about using a bicycle for transportation, building your own home using stone from your land ala Joe Dominguez and Vicki Robin, "Your Money or Your Life". I don't think there's anything wrong with that kind of life. And the younger you are when you start, the better off you'll be later in life. Building security that way is a slow process.
You can certainly get yourself in a lot of trouble borrowing money. IMO borrowing money for things that lose value is foolish. However, most of us have to do it anyway (ie to get a car). To borrow money to invest can be foolish if you don't know what you're doing. Many people have lost everything by doing so. However, Many people have lost everything but learned from the experience and gotten everything and more back (including myself). The important thing is to take everything in stride and confidence that you'll be okay. When you lose your shirt by borrowing money, is your inclination to give up? If it isn't then I wouldn't be so quick to say you'll never borrow money again.
Harold
Mike
I think mobile homes are good investments, when they're purchased in highly desirable areas. I've owned one in a beach town, and I'm considering buying another one soon. Do your research because there is a big difference between an all-age park, a senior park, and a mobile home on land. Also, space rent can be higher than you'd expect.
I agree with others who think you're paying down student loan debt very quickly. If you have a low interest rate, it may be better to keep the student loan. It's definitely a very personal decision.
Check out John Fedro for mobile home advice. Best of luck.
Hi all,
Great advice from others on this thread.
Congratulations on paying off your loans thus far Mike. Like so many others have already said buying could be more advantageous than renting. Like Jon K mentioned above make sure to purchase a home as an investor would, and not like an end-buyer. Make sure the deal is an investment and will be profitable when you resell.
With that said would you live in a park or on private land? Either is fine and either will make you significant profit when purchased correctly from a motivated seller.
I hope this has helped you decide what to do. Any further questions don't hesitate to ask.
Thank you for the shout out @Marlene D.
Talk soon,
John Fedro
I second Robert Leonard's post. If the rates on your loans are extremely high, then by all means, pay them off. If they are reasonable (6% or lower), then consider holding them and investing the money you would use to pay them for a higher returns elsewhere. For instance, I had some very high interest rate private loans when I graduated and some low rate federal loans. I paid the high interest loans in full, but keep paying on the low rate loans, which allowed me to save enough to buy a house and build my credit. Just a thought!
#2 Mobile Home Park Investing Contributor
- San Antonio, TX
Sounds like you're paying off your loans at a fast rate; the pay down is quite a considerable sum in a short amount of time!
With that being said, there are other ways to lower your living expenses. For me personally, I believe your home should not be an investment - it's merely a place to live. Though, there are others who think otherwise.
If you're contemplating living in a mobile home, it's really best to take a good look at yourself and determine if it's right for you. Being in this niche, I've known successful folks who just cannot see themselves living in the very asset class they purchase for investing. On the other hand, there are others who do the same and are OK with it. It's a psychological issue for many - you just need to do what's best for you.
If you do decide to go down this route, it's just like any piece of residential real estate. Go in as a consumer, not as an investor. It's not just the home but the neighborhood that counts. Otherwise, you could end up in an undesirable living situation.
Hope that helps, best of luck!