The real estate market has soared over the last couple of years. Buyers face housing shortages and skyrocketing prices across the nation while sellers make huge profits selling their site-built homes and mobile homes.
We all know mobile homes are one of the most affordable housing options in America but they can make great investments too. This article will discuss mobile home advantages and disadvantages and whether mobile homes can be a good investment.
In our opinion, mobile and manufactured homes should absolutely be viewed as more than just an affordable housing option. They can be a great investment that can gain value (and we have proof).
Mobile and Manufactured Homes Defined
Mobile homes were constructed on a chassis in a factory before mid-1976.
Manufactured homes are also built on a chassis in a factory but after June 1976.
June 15, 1976, is significant because a federal law took effect to make factory-built homes safer and stronger.
Around 63% of all new manufactured homes are placed on property owned by the home buyer. Meaning only around 37% of new manufactured homes are placed in parks.
This is an important fact because a manufactured home placed on privately-owned land can be permanently installed and classified as real property, just like a site-built home.
Once a manufactured home gets classified as real property it is sold through a Realtor just like a site-built home. Studies show a permanently installed manufactured home has the same potential to gain value or appreciation, just like a site-built home.
Advantages of Owning a Manufactured Home
There are quite a few advantages of owning a manufactured home. The best advantage is their lower cost per square foot compared to site-built homes.
- Mobile Homes are a less expensive housing alternative and can help families accomplish their dream of owning a house. Families can obtain more space for their money because mobile and manufactured homes have always cost less per square foot than stick-built homes. The average new manufactured home costs around $112,000 in October 2021 while the average site-built home costs $350,000!
- The average American doesn’t have it so easy when it comes to retirement. Mobile homes can be a great retirement option.
- A well-constructed manufactured home is much stronger than most people realize because every home must meet the Department of Housing and Urban Development (HUD) code requirements for each wind zone.
- Another great advantage of mobile homes is their mobility. While few manufactured homes are ever moved after being installed knowing you can move the home if ever needed can give a family great peace of mind.
- Manufactured homes that aren’t classified as real property have an appealing tax structure compared to site-built homes.
- If you opt to rent out your mobile home, you can provide the advantage of a mobile home warranty to your tenants. It Will Make your property attractive and save you from the hassle of dealing with repairs.
Manufactured Homes Can Absolutely Appreciate
Lending Tree recently published an article about manufactured home appreciation. They pulled data from a U.S. Census Bureau report that clearly proved manufactured homes gained value in almost every state and at a higher rate than site-built homes between 2014 to 2019.
“…the median value of mobile homes increased by 39% from 2014 to 2019, 6 percentage points more than the 33% increase in the median value of single-family homes in the same period.” – Lending Tree
Disadvantages of Mobile Homes
It’s only fair that we cover the disadvantages of mobile and manufactured homes. Here’s are the top disadvantages:
- Historically, it has been challenging to resell a mobile home, especially if it sits in a mobile home park. However, that doesn’t seem to be quite the case nowadays, especially in the current real estate market. Homes all across the nation, of every size and shape, are selling quickly and at top dollar.
- Financing for manufactured homes is difficult. Typically, buyers will have to use a chattel loan which has higher interest rates and fewer protections than a regular mortgage. The 6 page PDF from the Urban Institute covers the challenges of obtaining manufactured home financing.
So Are Mobile Homes a Good Investment?
We think so and it appears that all the mobile home park investors buying up parks across the country think so too. They certainly see the potential of mobile homes so perhaps you should too.
If chosen correctly, mobile and manufactured homes can be very profitable investments. Just be sure to do your homework and learn what to look for in a pre-owned mobile home or a new manufactured home.
Over 20 million Americans live in mobile and manufactured homes, accounting for around 5.6 percent of the population. According to USA Today, the number is steadily increasing because mobile homes are less expensive than traditional residences so they are more attainable.
As we’ve stated time and again, we love mobile and manufactured homes because they are affordable and attainable, giving families a chance to actually own a home, and owning a home is pretty awesome!
As always, thank you for reading Mobile Home Living®!