Investing in a Motorhome?

March 1, 2017 9:40 am Published by

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My parents immigrant story is not an uncommon one. Arriving post war with nothing, they worked, saved, worked, and worked some more. Canada provided them with the opportunity to get ahead, which did not exist in Europe at the time. By the time their youngest of five came along – me – much of the heavy lifting had been done (according to my siblings) and my parents had begun to realize what was for them the ultimate accomplishment – investing for the future. The vehicle of choice? – Real estate. And so, in the simplest of plant yourself in the path of progress fashion, my parents acquired a stake in what they believed would eventually be development lands in the South end of Guelph.

The problem with any long-term investment is that it requires a great deal of patience. There may be times along the road when the overwhelming burden of time seems less than worth it when other financial pressures dont understand that the seed you planted in the ground may need another 30 years to germinate. And so, when the opportunity to sell a stake in their investment presented itself, they accepted. While the exact distribution of the funds is a foggy memory, there is one purchase they recollect well – a motorhome. My dad seemed to think it would be a wiser allocation of funds than the other option on the table – a Muskoka cottage. The reasoning being that with a motorhome you had a different cottage every weekend!

For my part, I thought a motorhome would make me the coolest kid on the block. We were both sadly mistaken. The motorhome proved to be little more than a means of avoiding bathroom breaks while on a long road trip. It is long gone now. Having paid $40,000 for it in the early 80s, rarely driving it for its cost of fueling and propensity to break down, it was eventually sold for $6,000. For someone I have always looked up to as being financially astute, the motorhome investment is a bit of a blot on my father’s investing resume. Thats ok Dad, as the saying goes, even Pavarotti had to clear his throat once in awhile.

Keep real estate, and eventually it will keep you

Until recently it was very difficult to put a price tag on the actual opportunity cost of the motorhome. It was in effect, a trade for a piece of land whose development seemed to be forever away. Well forever has finally arrived, and lands in the direct vicinity to the one my parents sold have begun to sell as development lands. With this comes the ability at long last to accurately ascertain the true cost of my parents trade. Conservatively, the motorhome, and whatever else they may have used the proceeds for (food perhaps?) cost my parents in the range of $3,000,000.00. Fortunately, this episode has not impeded my parents ability to buy groceries and they are able to laugh about it now. However it does provide a useful reminder of the maxim; Keep real estate, and eventually it will keep you.

 

Thanks for reading,

Jeff Neumann

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