Buying a mobile home can be a difficult time. Mobile home and manufactured home loans are hard to find and taxes can be confusing. On top of that, you may have been advised wrongly that mobile and manufactured homes never gain value or appreciate over time so their not a good investment.
It’s not true and I want to clear up the misconceptions once and for all.

Buying a Mobile Home: Return on Investment

One of the main points of buying a home is to get a decent return on your investment and adding to your asset portfolio. Homes are usually your largest supplier of net worth and a manufactured homes can supply that just as well as a stick built home.
There’s many ‘real estate professionals’ all over the internet stating that our homes can’t gain value. Entire articles on popular real estate websites state the same misinformation but they are wrong. I have actual and relevant data stating mobile and manufactured homes can appreciate just as well as any stick built home!
First, let’s get the legalities out of the way:  I’m not a finance professional nor am I licensed in such matters. I cannot guarantee that your manufactured home will appreciate, nor can I guarantee a stick built home can. There’s too many variables in play. I simply want to make sure you have the correct information available to you and that the biggest myth regarding manufactured homes is put to rest.

The Method of Calculating a Manufactured Homes Value

First and foremost, book value of a mobile home has very little to do with the actual market value. Those are 2 different statistics and are calculated in different ways. Data Comp describes book value as calculating ‘the average depreciated retail value of a manufactured or mobile home.”

They also go on to explain,  “The NADA Value Guide was a fairly accurate market value guide in 1975. Unfortunately, in today’s market it can no longer be relied upon to accurately determine the local market value of a manufactured home.

A market based appraisal is the same method of determining a manufactured homes value as they use with stick build homes and is the only accurate way to gauge the total worth of the home. Data Comp is one of the largest appraisal companies in the nation and have estimated and appraised over 200,000 manufactured homes. The companies data is sound and that’s where we will be getting our data for this article.

The following is how Data Comp calculates a market based comparable appraisal:

  1. Includes a thorough inspection of the home
  2. Researches recent, similar sales transactions in the local area
  3. Analyzes those sales in comparison to the home being appraised
  4. Produces an independent, expert, and unbiased opinion of value

If you want the true market value of a mobile home, a market based appraisal is the only way to get it. You can’t just go to a website or a book and look up the make and model of the home and get an accurate estimation.

There are a lot of variables in play when it comes to any homes value. Location, maintenance and age are only the basics. Marketing trends are a huge part of the equation as well as current mortgage rates and even foreclosure rates (we’ll dig into the the myths about manufactured housing having higher foreclosure rates at another time, just know that data proves that manufactured housing loans have a lower foreclosure rate than stick built homes do, therefore the higher interest rates are uncalled for and shouldn’t be allowed).
So how can anyone within the real estate industry state that manufactured homes can never gain value? They can’t and if they do you should stop communicating with them immediately. It’s that simple. Either they didn’t research properly, they haven’t taken the time to understand the market or they simply want to keep you from buying a manufactured home.
Manufactured homes are not perfect but they are a lot better than most give them credit for. They deserve to be looked at through a non-judgmental point of view and with factual data that’s specific to manufactured homes.
buying a mobile home

Buying a Mobile Home: The Proof that Manufactured Homes Can Appreciate

Data comp Appraisal Systems looked at 185 manufactured homes in the state of Michigan. They compared the average sale price to the average resale price several years later.
  • 97 of those homes increased in value by an average of $2,985
  • The remaining 88 decreased in value by an average of $2,822. 
So, more homes raised in value by over two thousand dollars than did not!

Variables that Affect Appreciation

Based on an analysis of 88,000 actual sales, Data comp found that there are specific reasons why some homes appreciate while other depreciate. The home’s location can affect the value by over 24%. In other words, manufactured homes that are sited on their own property are more likely to increase in value than those in a park. Still, with the surge in retirement there’s a good chance that demand for mobile home communities for the 55+ age group will help keep the home prices at a consistent level which, in turn, can increase the value of the homes.
The variables include:
  • The housing market, in which the home is located, will have a significant impact on the future value of the home.
  • The community, in which the home is located, has a similarly significant impact on the home’s future value.
  • The initial price paid for the home.
  • The age of the home.
  • The inflation rate.
  • The availability and cost of community sites, which reflects the supply and demand influences on the home’s value.
  • The extent of an organized resale network, where an organized network will usually result in homes selling for a higher price than in markets without such an organized network.
When properly sited and maintained, manufactured homes will appreciate at the same rate as other homes in surrounding neighborhoods. 
Don’t forget that there’s no guarantee for stick built homes to appreciate either!
I was reading in a forum the other day and out of 40 replies to a question a lady asked about her mobile homes appreciation only 3 knew that the potential was there at all. The others flat out told her no, they couldn’t and wouldn’t gain value, period.

The myth that our homes don’t gain value is simply not accurate. Yes, some manufactured homes can lose value over time but theses statistics show that more gained value than lost. Stick built homes can lose value too and the economic turmoils we have had in the past few years is proof of that.

Thanks so much for reading Mobile & Manufactured Home Living!


About The Author

Creator/Author
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Hello! I'm Crystal, the creator of Mobile Home Living and I appreciate you stopping by! I hope MHL is an inspiring and informative resource for you! Please consider letting us feature your remodels, room makeovers and home improvement projects. There's simply not enough inspiration available for manufactured homeowners and I want to fix that. Thanks!

4 Responses

  1. SumnersAC

    Its not important if your home is big or small as long as its comfortable to live and not hot over the days to feel you relax and check if the air condition is OK, if it gives cooling temperature when ever you stay at home.

    Reply
  2. Clara Orr

    We live in a modular home, which is tied to the foundation on piers and cables. It qualifies for an FHA loan as a result of the manufacturing and foundation of the home (just as any other stick-built home would be.) However, because our home arrived on wheels our insurance company has it listed as a mobile home and refuses to acknowledge that it can appreciate. How can we have the home reclassified under insurance to get a better rate, as well as not being classified as a mobile home? Are there insurance companies out there that are open to the concept of reclassifying it and offering us more options for coverage?

    Reply
    • Crystal Adkins

      Hi Clara!

      I’m not terribly knowledgeable about the insurance and financing aspect of manufactured homes (I know more about the construction aspect but I’ve tried to learn as much as I can about manufactured homes) and I’ll certainly try to help. There are some insurance companies that are much more open to mobile homes. Foremost has been insuring mobile home for half a century but I’ve never dealt with them personally. I believe Geico finances campers and RVs so they may also handle mobile homes. We use a ‘generic’ no-name company though we have an agent close by – he is an agent for lots of different companies.

      Do you know how the tax assessor has qualified your home? In some states you can request they classify the home as real property since it has been permanently installed (it’s up to the assessor though if they will do it). However, it may raise your taxes. When its listed as a manufactured or mobile home the taxes are usually lower and you pay separate taxes (one for the home, one for the land).

      I’m assuming that since the home is financed you have to carry enough insurance to cover the payoff and that may be the reason its listed as a manufactured home – maybe in your state it has to be listed like that till its paid off due to some legalese through the FHA? I’ve heard dealing with FHA is not fun!

      That’s one of the biggest issues with financing and insuring manufactured homes – each state has their own rules and there’s very little information out there for us regular people. In order to learn anything we have to make a real effort to go through the HUD website and buy expensive books. Anyway, I’m sorry I can’t be more help. Good luck – I hope you find the information you’re looking for.

      Reply

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