What are the pros and cons of these two. The manufactured homes are cheaper so you can get a 10 year old manufactured for the same price as a 60 year old conventional home with similiar square footage so you’d assume upkeep prices would be lower on the manufactured. However manufactured homes tend to go down in value instead of up as the years pass. But the taxes and insurance may be a bit lower on a manufactured so perhaps the savings on maintenance, taxes and insurance would make up for the depriciation factor.
On the inside I can’t really tell a difference between the two.
I just bout a manufactured home for my ex-wife and kids to live in.
It’s a four bedroom 2-1/2 bath with livingroom and den.
This thing is a fricking mansion.
The kicker to this is I’m paying the same monthly amount on this as I am on my two bedroom apartment.
I figure when I get to retirement age I’ll kick the ex out and go live ther myself. In the mean time I’ll let her pay the mortgage on it wich wil be more than paid off by the time I retire…
Yea! Go me…
I’m a big fan of manufactured homes myself. They’re cheap and have really gone up in quality since like about twenty years ago when they were basically just over priced tornado magnets.
The only thing I don’t like is the floor feels like you’re living on the second floor of an aprtment. So if you got young’ns running around and stomping all over the place you’re going to know it.
What are the property taxes and insurance rates like compared to a conventional home? What is the square footage of the place you just bought?
I was looking at places in indy and the 3 bedroom ones at/near 1800 sq ft built in the 90s cost 60-80k. That is about $400 a month in mortgage payments, which is damn good.
Conventional homes appreciate in value, generally by quite a bit. If you buy a starter home now, and hang on to it for 40 years, it will be worth much, much more than you paid for it assuming good upkeep. For instance, on my condo I’ve got about 14% ROI each year I’ve lived here - that’s a decent use of my money.
Conversely, manufactured homes depreciate in value in much the same way as a car. This means that after owning your home for 15 years (or so), it’s basically worth nothing (on paper). It would be very unlikely that you would get your purchase price if you tried to sell it, and you certainly wouldn’t get more than your purchase price. Looking at the time-value of money, it’s just not a sound investment.
However, manufactured homes are inexpensive, reasonably comfortable, and pretty attractive (at least the new ones). If you’re looking for somewhere to live that’s decent and you have pretty good creative control over, a manufactured home is a safe bet. Just don’t plan to retire on the proceeds of its sale.
One thing to factor in is that when you buy a conventional house you are also buying the land it sits on. That’s a big part of the price, and it’s also a big part of the appreciation. When you buy a manufactured home you might be able to put it on your own lot, if you have a lot and if local zoning allows, but very often you rent a space for it in a park. You’re really not building up any equity, which is a primary appeal of buying (rather than renting) a home.
Virtually all of the manufactured homes in this area come with their own lots.
The depriciation value is a concern though and it seems that condos and manufactured homes are roughly the same price in regards to sq footage and number of bedrooms (a semi-new 3 bedroom of each starts at about 50k). But the condos are about 40 years old while the manufactured homes are only 10 years old, that may make a difference in maintenance costs. Plus there are condo fees in a condominium. But the appreciation may make up for these extra expenses.
From personal experience, I’d say that a 10 year old MH is worse off than a 40 year old condo. Maybe they’ve improved materials, but I doubt it. A run down house is a “fixer-upper.” A run down MH is a junk pile. I’ve never seen a MH that could be kept in decent shape. Even most cars can be kept looking nice through maintenance because they’re a quality product. But not a MH.
Living in Southwest Florida has highlighted some of the deficiencies of MHs: Hurricanes. Yes, conventional houses got wrecked as well, but it seems like MHs got trashed at a disproportionately higher rate.
Yes, MHs are so much cheaper and easier in the short term. That by itself should send up a huge warning sign. You get what you pay for. Why not pay for something that gives you a return rather than something simply gets used up? A home should not be a disposable product.
Let me stress this: DON’T BUY A MOBILE HOME!
Another point: If you live in a MH, whether it’s in a MH park or not, you’re gonna get second-rate treatment from the local government and the community at large. There is snobbery, yes. It’s not right nor fair but it’s true. I have been an intern at planning meetings where city officials deliberately excluded MH parks from annexation because it was “undesirable.” In fact, I remember the administrator specifically say that the town was trying to get rid of the MHs within the town limits. As a conventional home-owner, you’ll be seen as a worthwhile citizen whereas a MH owner is looked upon as a gypsy who’s not worth listening to because they’ll be moving on in a few years anyway.
In my experience we’re talking about three different things here.
Conventional stick built homes.
Mobile homes the smallish metal rectangular boxes.
Manufactured homes. This is a bit of a grey area. There are two types of these, the cheep ones that are little more than two moble homes put together. Then there are the high quality manufactured houses which use 1x6 framing on all exterior walls, 2x4 at 16" on center for all interior walls (many conventional homes are now framed with 2x4’s at 24" on center for interior walls) Many of the manufactured homes are custom built, 2.5 stories tall with basements and can hold there own in the most upscale communities. These homes permanently attached to a foundation hold their value just as conventional homes in this market
What I was talking about was the second category, the kind you have to take the wheels off of. As for the third category, I couldn’t say. Although the appreciation/depreciation factor is still important.
Manufactured homes are essentially conventional homes prebuilt in a factory from the same construction codes. They are much less expensive than building one on your lot and appreciate in value much the same as a conventional home.
A mobile home is just that, a home with wheels. Built under the premise that they would be movable. Although the improvements they have made in recent years are astounding. One of the things you would want to look at is the park itself. If the park has restrictions such as over 55 or adult your market is limited when looking to resell. However if it is a family park, the conditions may not be as favorable because of the noise level and neighbors upkeep. They do not appreciate unless they are on their own land and then only the land appreciates. Even then, the home eventually could become a liability bringing down the value of the land depending on the condition.
A conventional home is always your best investment as long as you keep it up.
A condo however, and I am sure many will dispute me on this, is not a good investment. Although you will make a return on your investment, you will not make a return equal to the value of your monthly maintenance fees. This is why originally most real estate professionals did not think they would take off when they were initially offered. Some people tout the value of maintenance fees for the services they offer but when compared to actually doing these things yourself or even hiring someone to mow the lawn or plow the driveway, it doesn’t add up. They restrict your right to make improvements thus improving the value of the property. Essentially you are giving yur landlord a lot of money up front so you can pay rent to him. When you sell it, you will just be getting your money back with some interest. He will have still made money on you one way or the other from your initial investment, the profits from the fees as well as the property ownership of the land (clubhouse, pool, parking lot etc…) and tax benefits.
I am a loan officer with a mortgage broker and let me tell you in the world of home loans - there is a huge difference between manufactured and stick build homes.
With a manufactured “mobile home” there are really no loans out there for them. You will have a hard time taking cash out or getting a second. And if you are trying to purchase one with land - you have very limited options with almost none of them 100% financing.
With a manufactured “modular home” most lenders will treat it the same as a stick build house. That means its easier to cash in your equity, get 100% financing for purchases and obtain seconds easier. Also, an appraiser will be able to use stick built houses as comparables to increase your home’s value - which is not an option with a mobile home.
We always incourage our customers to purchase modular homes - almost the same price as a mobile home - but worth what a stick built one would be.
There are basically three options if you want a good return on your investment of a home. If you don’t have a lot of money to invest.
Buy a piece of land in a profitable location. ie. within walking distance of a) a large body of water, b) the junior high or high school (elementary school busses are not as bad), c) a business district or shoppping area (if the zoning law permits a business on the property), d) with a nice view that sees no sign of being torn away. Place any kind of home on the property (depending on the zoning laws).
Buy the best home you can with whatever you have. Nowadays you can look up just about any project and learn to do it yourself on the web. As long as you can make improvements you have the potential.
Buy a mobile home with the intention of buying a home in the near future. As long as the park will allow you renting it out it could be a good investment when you leave by providing a small income. (My ex lived in one that was so run down he couldn’t close his bedroom door or the front door. The noise was so bad he couldn’t sleep because of the abusive father next door) He paid $125 a week and shared it with two others. This made the owner of that 40 year old piece of junk $19,500 a year. The man owned 3 of them and made almost $60,000 a year.
I pay about .5% of the value of my condo towards maitenance per year. I get about 14% of the value of my condo back per year in appreciation.
That’s a net ROI of 13.5%.
Additionaly, and once again considering opportunity costs, me NOT having to mow a lawn or tend trees, or remove ice means that I have more time to do things that I like.
Further, the rules imposed by my condo association are no stricter than those of many home-owners associations, and less restrictive than some. For the record, this also helps to keep my property value higher.
A condo is a much better investment than a mobile home, period. Condo markets tend to soften up before house markets, so in a slower market that means that re-sale may take longer than a house. That, however, is pretty much the only real value disadvantage between a house and a condo.
Depending where you live: I have a three bedroom house and my water and sewer bill is around $30 month my gas bill for everything is around $80. Mowing 6 times a year and plowing 4 times a year is at most $500 year / 12 = $40 month. That is $150 month. I don’t know what your interest rate is or how much your mortgage is but I pay over $500 month in interest alone at 7% on $100, 000. The appreciation on my house has been about 10% a year averaged out over 14 years. That makes my equity profit 3% year which is $3000 avg. subtract $150 month for mantenance. I make about $1800 a year profit on my house. So about $150 month.
Methinks you should do likewise and reassess your position.
I live in Canada. Increase the gas bill to $100/month and the plowing to 16 times a year and you’re closer. Additionally, the grounds are mowed once a week in the warmer months - about 16 times as well.
Additionally, factor in my reduced insurance costs because I’m in a high security building.
My interest rate is 2.9%.
So, I’m paying about $20 a month for snow removal and lawn care. I paid about $5000 in interest last year and made about $18,000 in appreciation…
My wife inherited the land we live on, it’s great, 19 acres on the swamp, no nieghbors. We bought a mobile home 10 years ago for 17 grand, less than some friends have paid for their cars. It’s paid for and so is the land, I have no living expenses (property taxes, electricity, phone, and soon propane, big deal). It’s been that way now for the past 2 years. If a tornado took it down this afternoon, I would do the same thing.
