Move To An RV Co-op Community For Low Cost Of Living

I love looking at different options to have a low cost of living.  With more and more work being contract based and/or work from home, workers in general have more freedom to choose where to live than at any other time in history.  Having a decent income and the ability to live in a low cost of living area is a double win.   I recently learned about a new idea to me for a low cost of living lifestyle, living in a Co-op RV Community.

How I learned About Co-op RV Communities:

My dad retired last year and when my mom left her primary employer several years ago she was able to negotiate a role where she could work remotely.  During the last 2 years my parents have purchased an RV and have been visiting different places around the country to find a new home base.  They had lived in Kentucky for 7 years for my Dad’s job, but now that he is retired,  there is no reason to have a permanent home there.

While visiting Arizona my parents found a Co-op RV Community that they really liked and signed up on the wait list.

The Nuts and Bolts of the Co-op RV Community SKP Saguaro:

The SKP Saguaro Co-op RV community has 297 total leaseholder lots.  Each lot has water, sewer, 50 amp and 30 amp electric, and there is cable and WiFi throughout the community.  No one can own a lot.  Each person in the co-op has what is called a lifetime lease on their lot.  A lifetime lease costs $12,234 as a base price, plus the cost of any improvements made by previous lifetime lease holders.  Each lot can have a casita built on it, with a maximum square footage of 288 sq. ft.  In general lots range from the $12,234 unimproved lot to around $40,000 for a lot with a really nice casita.

If current members die or want to leave, they can immediately sell their lease for their cost basis, and it can be bought by members of the community first who want to move into that specific lot, or it goes to the waiting list and someone who is not a member can gain membership by immediately paying for the lifetime lease, allowing an instant cash out for the seller.

The SKP Saguaro Waiting List:

In principal I am against waiting lists, but for how specific of a community this is, it makes sense.  A waiting list to me illustrates a failure of supply and demand.  It shows that the demand is high, therefore supply should increase or the price should increase to reach equilibrium.  Since this is a small community, and the co-op wants to maintain it as a small community increasing the supply is not desired.  If the price of a lifetime lease were substantially increased until supply and demand were equal, then with no waiting list it could take months or years to find the right buyer for your specific lot.  With this waiting list system and hundreds of people on the wait list there is a guarantee to the current members that they can cash out at any time for the full value they have invested.

Here’s how the wait list works in detail:

To sign up for the wait list you need to deposit $500 with SKP Saguaro and fill out an application.  The wait list is organized by order of sign up, so spot #1 is the oldest sign up.  Every week any available lots are published and people who are interested in getting one of those lots need to call on Saturday morning to express their interest and again on Saturday evening to express their willingness to close on the transaction.  The person on the wait list with the lowest number who makes both calls will then become the new life time leaseholders and need to send a check for the full amount.  Many people on the wait list are not ready to exercise their option and the most recent winners have been in the low 100s on the wait list.

Benefits of Being An SKP Saguaro Lifetime Leaseholder:

  1. You only pay once: The price is extremely low.
  2. The community has several shared assets that help create a low cost of living.  There is a clubhouse with laundry facilities, a fitness center, a library, a billiards room, and a commercial kitchen. There is a workshop with wood working and welding equipment, and a tool library.  All of these assets are available to use for all lease holders.
  3. Storage:  Being limited to your RV and a 288 square foot casita can be difficult for many people with a lifetime of stuff.  There is a back lot where lifetime leaseholders can have a storage container as well.
  4. Rental Pool:  If you leave your RV pad for 16 days out of any given month then you can be entered into that month’s rental pool.  The Co-Op rents out those sites to other RVers in your absence and the proceeds are split between all the lifetime lease holders who are in that pool for the month.  (Your casita is off limits to the people renting the pad).  This rental income can offset the yearly maintenance and operation fee that the Co-op charges, which is $1,300. The Co-op only rents to Escapee RV members, and anyone can joing, even on the spot for a $40 yearly fee.
  5. Property taxes: Each lifetime leaseholder has to pay property taxes on their portion, which are <$200 per pad, with variation based on casitas.
  6. The sense of community: There are a lot of friendly people who live in the community.  There are a lot of shared activities, recreational options, and several volunteer positions.

The Fine Print:

SKP Saguaro is an Escapee RV Park and requires residents (and those on the wait list) to be members of the Escapees RV Club. ($40 yearly membership)

SKP Saguaro is a 55+ Community and needs to maintain 80% of its residents in this age group.

No kids allowed.  They can visit for 14 days per stay and a total of 28 days per year, but this park is for adults.

A lifetime lease can not be given, willed, or sold outside of the co-op.  The only exit is the guaranteed exit by selling through the co-op onto the wait list.

Members are expected to share their knowledge, skills, and time to make the co-op better through serving in jobs that the co-op has established.  Most of these jobs can be done in a few hours a week.

Financials Breakdown:

What really caught me about this is the low cost for a pad.  For $12,234 you can get a lifetime lease.  Most RV parks charge between $500 to $900 per month.  If we use the low figure of $500 per month, then you can get a lifetime lease for the cost of roughly 2 years of lot rent at any other park.

The yearly costs of $1,300 for M+O, roughly $200 for property taxes, and $40 for an Escapees membership add up to under $150 per month.

RV: Of course you need to own your own RV and this cost can vary substantially. You can spend anywhere from $10,000 to $300,000 on an RV.  Since this article is on having a low cost of living we are going to be looking more in the $10,000 range.

If you have a total of around $23,000 invested and your yearly cost of ownership is $150 a month, then you are doing pretty darn good.  Cable, WiFi, water, and sewer are covered in the M+O fees, leaving actual electricity use as the only utility bill.  Add in having most of the M+O fees covered from participating in the rental pool and the true monthly cost of living could drop to under $50 a month.

Alternatively, putting down 20% on a 100,000 house with $3,000 in closing costs would be comparable in initial cost outlay, with a $592 a month payment on a 15 year mortgage, plus another $1,500 in property taxes and insurance per year.

This RV Co-op community lifestyle also makes it easy to upgrade as your income goes up.  You can always sell your RV and upgrade to a nicer one as your income and savings increases.

Solar Panels:

Arizona has the most hours of sun of any state in the continental US, making Arizona the best place in the country to install solar power. IF solar panels are allowed at the RV co-op they could offset the cost of electricity, which is the only utility bill residents have. combined with utilizing the rental pool the true monthly cost could drop down to around $15 a month in property taxes. If the co-op does not allow solar panels installed on casitas, it is possible to install solar panels on an RV and many people go this route.

The numbers for solar:

With a 288 square foot casita and a 200 square foot porch roof you could place roughly 500 square feet of solar panels. This would allow for up to a 7.5KW solar system, although most people install 5KW home systems. It looks like the current cost of a system of this size is about $12,000 before tax credits.  This system, at this location, would produce around 16,000 KwH of solar power per year and have a break even cost point of 6 years.

Add in that Arizona has a current 25% tax credit of up to $1,000 and the current federal tax credit is 30%, this $12,000 cost drops to $7,400, making the payback closer to 4 years. Southern Arizona is the best place in the continental United States for solar power. Pay $7,400 once and you have free electricity for the next 25 to 40 years.

Under 55 RV Community:

Although this community is designed for those over 55, it can be a great idea for an individual or couple who is much younger.  Since 20% of the community can be under 55 there are 59 spots that can go to those under 55.

The value of a lifetime lease is much greater if you buy it earlier in life.  A lifetime lease at age 55 may be amortized over 30 years.  At 25 would be amortized over 60 years, cutting the per year cost in half.

For a young couple who is mobile and not planning on having children this RV Co-op community could be an excellent choice for a low cost of living setup.  With many of the residents being older a few young residents would be great to help with some of the more physically demanding jobs in the community.

Perfect For Nuclear Contractors:

I work as a nuclear contractor and although most of the work I do is at my home plant just 20 minutes from my house, I could live anywhere and still do my job.  I’m hired on a contract basis and if I lived over 50 miles away would be paid a per diem to cover my daily travel expenses.  Some of the people I work with in this industry live mostly full time in their campers or RVs and this would be a perfect place to live.

Per Diem and Palo Verde: SKP Saguaro is roughly 3 hours away from the Palo Verde nuclear plant. This is one of only a few nuclear plants that has an outage every season, because it has 3 operating reactors.  It’s far enough away to get Per Diem at every nuclear plant in the nation, but close enough to Palo Verde to drive home on a day off.

Rental Pool: The cost of living is ridiculously low and when on the road in Feb – May and Sept – Nov you can join the rental pool and cover your M+O fees for the year, without having to mess with any of the rental arrangements.

Time Off: Lots of time off in the summer and winter to enjoy the community and to participate in co-op jobs.

Ultimately living in an RV community isn’t for everyone, but it is certainly an interesting option.  What do you think of this Co-op RV community? Any SKP Saguaro residents want to chime in on anything I’m missing?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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