Do they loose their value? Can you take out equity? I guess I want to know if it is a smart financial move in looking at the future stability of my finances.
2007-07-30 12:17:24 · 6 answers · asked by Jeni K 2 in Business & Finance ➔ Renting & Real Estate
There is one HUGE disadvantage. It is called 'depreciation'. Manufactured homes just do not appreciate or retain value in the same fashion as do conventionally constructed homes.
If you need to sell in a few years, hang on to your hat. Mortgage lenders are refusing to finance these properties, and you could be stuck owning for a LONG time unless you find a buyer with a ready and willing pile of cash on hand.
2007-07-30 12:23:04 · answer #1 · answered by acermill 7 · 0⤊ 0⤋
Many of the above statements are true to one degree or another. One strong exception is "attracting tornados"! :-)
I bought a 2400 sq ft mobile manufactured home last year, I live in Florida but not on the coast. I am also a realtor. My decision to purchase a mobile was based on the fact that I was paying $1000+ for a 2/2 apartment and now I have a 5 br 3 bath home and I am paying $950 mortgage payments. We are able to afford our home that BTW has been built to code and is quite strong. We are looking for the opportunity to save some money and yet invest in ourselves, not the apartment complexes. This home can some day be rented out or resold and if we had to sell it for less than purchase price the loss would not be any where near the potential loss that the buyers of block homes could face. Does a MMH depreciate more quickly...Yes, over 20 years, some say 50 but that is pretty high. Mortgage companies don't like to finance them and insurance companies don't like to insure them but these situations are occurring with concrete block homes here too.
All too often when a hurricane or tornado hits, the devastation that is shown on TV is some ramshackled 1967 mobile home that should have been bulldozed over 20 years ago. Fact is when the tornado went thru central Florida earlier this year there were steel constructed buildings, concrete block & frame homes along with mobile homes that were devastated. Tornados are no respector of construction materials.
If you are looking for an equity builder, this is not the market to do that and MMH's are not really the way to go either. If I were to buy MMH's for investment purposes I would buy as low as possible and rent them out. Take tenants who are first time home buyers and lease option those houses, or just rent them to cover the mortgage plus a couple of bucks. ie mortgage $300-500 monthly rent $500-750.
Too many people are hoping for get rich quick schemes--buy this year, sell next year and clear $30k-$50k. Those markets are dangerous and quickly die leaving lots of people in the lurch!
Slow and steady wins the race!
Happy investing
2007-07-30 13:36:49 · answer #2 · answered by Free Thinker 6 · 1⤊ 0⤋
Manufactured homes have their spot of the marketplace. But they are not a smart financial decision for the reasons outlined by the other posters. They do lose their value, you probably won't have any equity to take out, some lenders will not refinance a manufactured home, and others won't touch a used manufactured home. Especially if its manufacture date is earlier than June 14, 1976.
2007-07-30 12:55:32 · answer #3 · answered by godged 7 · 0⤊ 0⤋
Not all financial institutions will deal with them. The value usually does not increase like site built homes.
However, if you buy one that qualifies for an FHA loan then you will have a pretty good deal depending on condition, location, etc. Also you will get a good interest rate or should.
If you buy one that is in a park/community make sure you know what the rules are first and if you have extra fees per month.
There are pluses to doing this you just have to be careful and a good realtor should be able to help you.
2007-07-30 12:24:23 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Downsides:
They aren't good in tornado areas!
You may have to pay a land lease to park them. Extra monthly expense
They will be a lot less expensive. (not a bad thing!)
The equity part goes the same way as the car. Depreciation not appreciation for the most part. Good luck with your decision-maybe if you are going to do it buy used and enjoy the fact that someone else had to deal with the depreciation and you won't have such a huge bite.
2007-07-30 12:28:09 · answer #5 · answered by helprhome 5 · 0⤊ 0⤋
They seem to attract tornadoes.
2007-07-30 12:21:03 · answer #6 · answered by Paul in San Diego 7 · 0⤊ 0⤋