I regret buying a mobile home
Nor are we saying that mobile homes are not nice. There are some really nice looking the trailer homes! But that doesn’t make it the good investment. Mobile homes depreciate once you move in, in the same way that your car loses value the second time you drive it away. Investing in a mobile home is not an investment in real estate. The land on which the mobile home sits is real estate, but the home is considered personal property.
How long are mobile homes?
According to the Department of Housing and Urban Development (HUD), the life expectancy of manufactured homes built today is between 30 to 55 years. This estimate is for manufactured homes built in accordance with current HUD Building Codes and building standards that apply to all homes manufactured since 1976.
Of course, just like a car, the mobile home will hold up as it is maintained. If you continue general maintenance, choose the location of your plot wisely, and inspect it now and then, it could last you well over the 55-year mark.
Like traditional stick-built homes, mobile homes are made of wood and metal. But unlike ordinary homes, they are not built on a permanent foundation with frames that are built to last. People who live in mobile homes are most vulnerable to natural disasters, including hurricanes, tornadoes, floods, and fires. A recent study found that hurricane-related deaths are 15 to 20 times greater in a mobile home than in a conventional housing.
Needless to say, a mobile home is not something you will pass on to your family for generations.
List of downsides to buying a mobile home
The value of a mobile home is dropping rapidly
When you buy a new car, its value drops immediately the moment you push it away from selling the car. This principle also applies to mobile homes. What you pay for this structure will not be the value you get once the product leaves the factory. Land generates value based on the improvements it receives, so the nature of this product makes it more personal property than an actual investment. Any increase in value usually comes from the primary property rather than the mobile home.
Mobile home financing can be more expensive
It can be difficult to get a mortgage for a mobile home. You can rip the structure off and install it on a concrete pad in some areas to qualify for traditional lending products, but most owners need to take out a different type of loan. It’s a personal property loan, sometimes called a “baggage” loan, and it comes with a shorter term and a higher interest rate than a mortgage.
If the lender decides that your mobile home can still be moved, it will not be a permanent construction. This means that you will not qualify for a mortgage. The contractor can give you any options available to change this defect, but it will come at an additional cost.
Mobile homes are smaller than most homes
The average mobile home is about 20% smaller than what you’ll find with a stick-built structure. If you’re a budget-conscious shopper who views a single-width trailer as an affordable living option, you’ll have a long and narrow living footprint. Most homes in this category range in size from 600 to 1,300 square feet, but all must be 18 feet or less in width to qualify for this classification. They must also be 90 feet or less in the length.
Negative stigmas persist for mobile homes
Modern production methods have changed the idea of what it means to live in a mobile home, but you’ll still see prejudices against that choice in some parts of the United States and around the world. Some people consider them a dangerous choice. Others believe that it is the only option available to low-income individuals. They even have a reputation for the harboring criminal activities.
This disadvantage is the changing in many neighborhoods as the quality of mobile homes continues to rise. However, you’ll also still see some basic biases found in some zoning requirements and building codes.
You must have some type of land available for a mobile home
Most people who live in a mobile home will rent a lot for their new home. This means that you do not own the land, but you do have ownership over the structure. You may pay 2-3 different monthly costs when choosing this option, driving your expenses higher toward the mortgage rate for the stick structure.
If you have your own land that you want to use for a mobile home, it must have utility services available to complete the installation. This includes connecting a sewer or access to a septic tank. Next, you will need to check to see if there are any restrictions in place that could limit the type of structures allowed on your property.
Should I invest in a mobile home?
If you were smart, you wouldn’t view a trailer home as an investment. In financial terms, buying a mobile home is like buying a car that’s too big to sleep in. And we all know what happens to cars over time – they lose their value.
Some like to say that buying a mobile home is better than paying rent for an apartment or house. We will disagree. When you pay, say, $1,200 in monthly rent, that’s all you lose. But when you buy a mobile home, you lose money every day on ownership of this thing because it goes down so fast. It may look good from a tax perspective, but it’s bad news for resale value.
Source: Mobile Home
