Buying a Manufactured Home: Pros and Cons

Moving Tips

Row of mobile homes in Southern California

When Danielle Sargent took over managing a Southern California mobile home park in 2008, one home sat on the market for a year before it finally sold. Last year, with increasing demand, however, another sold in just two months.

“This place is a hot, hot market,” said Sargent, of Eagle Rock Springs Mobile Home Community in Eagle Rock, just outside of Los Angeles. Though called “mobile homes,” the units at this park are typically sold on site with the new owner paying rent on the land.

Living in mobile homes, aka manufactured homes, is on the rise, with a 60% increase in the number of new mobile homes shipped over the last five years, according to the U.S. Census. Experts say affordability is driving the trend.

Read on to learn some of the pros and cons from experts before you make your move to a mobile home.

What is a Manufactured Home?

Manufactured homes, aka mobile homes, are what the name implies. Though they can be placed on blocks or even a concrete foundation, they don’t have to be. The homes were built to be relocated, and by definition are on a permanent chassis, according to the U.S. Department of Housing and Urban Development, or HUD, which regulates the structures.

To avoid confusion, a prefab home is also built partly offsite, in pieces, and assembled on a permanent foundation, never to be moved again.

If you ask industry insider Steven Townsend, the term “mobile home” is one we should all consider abandoning. The vice president of operations at manufacturedhomes.com and modularhomes.com believes the term can conjure a structure built before quality improved. In the 1970’s the U.S. Department of Housing and Urban Development, or HUD, created strict standards, and it has been tweaking those rules ever since.

These affect design, construction and installation of mobile homes to ensure quality, durability, safety and, key in today’s market, affordability.

“Nowadays, manufactured homes, modular homes, prefab housing, factory-built homes, and any of the other names that these structures are referred to are as safe as a site-built home,” says Townsend.

Why Buy a Manufactured Home?

In fact, price has driven many to the mobile home market for generations, Townsend said.

For example, at the end of 2018 the average cost in the U.S. was $53,000 for a single and $83,000 for a double wide, compared to $380,000 for traditional homes, according to the U.S. Census. Keep in mind that the cost for a mobile home does not include the land.

Many say price had sparked a 60% increase in new mobile homes over the last five years, with 96,600 released in 2018, according to the U.S. Census.

Back at Eagle Rock Springs, Sargent agrees that the homes sell themselves.

Spaces are $1,100 for a month-to-month agreement. On top of that, one mobile home in the area featured in a 2015 Curbed article went for $45,000. The only current listing in Eagle Rock on Realtor.com for a mobile home is $269,000. That’s still lower than the median price of $860,000 in town, according to Zillow.

Sargent loves living with apartment prices but in her own home, with separate utilities, separate walls and no worry of a huge annual tax bill. At Eagle Rock Springs, after all, you’re a renter without such worries, and with someone else to maintain the grounds.

Paying for a Mobile Home

In general, financing for a mobile home is not a mortgage but is more like a personal or auto loan, with higher interest rates than a mortgage. At Eagle Rock Springs, the homes are typically sold in a cash deal, said Sargent.

The maximum loan amount for a manufactured home is approximately $70,000, with a maximum loan term of 20 years through Federal Housing Administration-approved lenders, according to HUD.

Eligibility of the borrower, whether the mobile home is considered real or personal property, and the type and age of the structure, also factor into the loan amount and cost.

Depending on various factors such as transportation distance, weight and size, the costs to move new manufactured homes can range from $1,000 to $5,000 for short trips, and as much as $15,000 or more, according to US Mobile Home Pros.

mobile homes along the parking lot at Eagle Rock Springs Mobile Home Community in Eagle Rock

When a Mobile Home is too Expensive

Jeremy Lehman, branch manager and realtor at Seven Gables Real Estate in Huntington Beach, says mobile home life is worth it “if the math works out for you.”

“People talk about it,” he said. “These properties stand out because a comparable condo or a house would be $1 million or more, so I am getting this for half price for the market area.”

Lehman says buyers don’t consider that there’s a space rental cost in his area that comes with the property, which Lehman refers to as a “lifestyle fee.” Unlike rural areas where people place a double wide on land they own, in urban areas, the cost can be subject to rent increases.

“The homes really aren’t worth a lot,” he said. “Someone who didn’t figure in the lifestyle cost could have done better with owning something different for the same type of money.”

Storms and other natural disasters can also adversely affect mobile homes. Most are not anchored down. Also, buyers of mobile homes will have little choice outside of the shoebox layout designed for transport and fitting in a space at a park.

What’s the Future of Manufactured Homes?

There’s a huge drive toward the minimalist lifestyle, Townsend says, with people opting for life experiences and destinations instead of accumulating possessions.

“The future of housing is factory-built in one form or another!” claims Townsend.

The way Sargent sees it, the mobile home community is only going to get more popular.

“Nobody ever moves. They die here.”

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