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If you're getting ready to retire and looking to downsize, you may be in for a shock. In much of the country, the housing market continues to grow at a rapid pace and many homes are selling for above asking price. In some areas, the lack of inventory — having more buyers than sellers — makes it a seller's market.

When it comes to downsizing in today's world, you might want to consider an unconventional option: RV living. It may sound drastic to sell your home and move into a vehicle full-time, but if you have an adventurous personality, prefer minimalism, and planned to travel anyway, RV living comes with a lot of built-in benefits.

Purchase Price Savings

RVs come in either motorized versions (also known as motor homes in Class A, B, or C) or towable trailers, mounted on and towed behind another vehicle. GoRVing helps you compare the options and gets you up to speed on all of the right lingo and Consumer Report's Beginner's Guide to Motor Homes can also offer valuable insight.

Most RVs cost between $40,000 and $150,000, according to RoverPass. But entry-level RVs can cost as little as $10,000. Considering that the median home price nationwide was $213,099, according to the latest data from the National Association of Realtors, RVs have plenty of margin for potential savings.

Tax Benefits

For tax purposes, you must choose a domicile state. You won't have to live there full-time, but you'll need to file tax paperwork for that state. RV Life Magazine lists the best domicile states for RV fans.

If you're going to be docking at campgrounds and RV parks, you'll pay a rental fee, but you'll avoid real estate tax, also known as real property tax. If you decide to dock at a mobile home park, there are different state and local laws that may require you to pay property taxes. That's when it gets complicated, so be sure to talk to a tax advisor. Either way, you'll likely have to pay personal property taxes, which applies to RVs, boats, vehicles, and other properties that can be moved around.

If your RV is your primary residence (or second home), you may be able to claim a home mortgage interest tax deduction. For an RV to qualify as a home, it must have facilities for sleeping, cooking, and plumbing.

Built-In Travel

Another perk is that you can travel nearly anywhere, often at a moment's notice. Your home is your hotel.

Most RV parks and campgrounds come with power, water, and a place to dump your water and toilet waste. Higher-end RV resorts offer glamping (also known as glamour camping) amenities, such as 18-hole golf courses, spas and salons, restaurants, and clubhouses. With the focus on community, many organize social activities or a special event calendar.

For most RV campgrounds, you can expect to pay between $25 and $80 per night, according to CamperReport. TripSavvy offers tips on where to park your RV for a low cost or for free.

The Downside

RV living isn't for everyone. Remember that you'll have to live light, as storage space is at a minimum. While you'll save money on home utility bills and maintenance, you'll still have some expenses. Along with the cost of the RV and parking it, Road Less Traveled's list of expenses helps you budget for full-time RV living.

Not sure full-time RV living is right for you? Take the idea for a test drive — rent an RV for a few weeks or even months to see if it makes sense for you. Happy trails!

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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