Compared> is Renting or taking out a mortgage better? And is a Trailor the wrong way to go?

Question

We are 'preapproved' for a mortgage up to $220,000.
I am going to school fulltime
and my husband is working fulltime.
We have no dependants, we have to move to a new city to start my school and rent there is around $1100 a month for a 1 bedroom and $1500 for a fourplex, $1700 for a duplex. INSANE PRICES.
We have looked into buying a house as a mortgage would be cheaper then renting monthly. We have found a trailor thats at $54000 paying what we pay now in rent we would have it payed off in 5 years.
This trailor is only 31 years old...... we were told never to get a trailor because the value never increase is this true? or in this circumstance we should?

We are moving to northern Alberta....
Very high and strong market right now.
A nice house (not a fixer-upper) is around $200,000

?? maybe a trailor is the wrong word... Mobile Home? I've lived in a mobile home my whole life and never was it considered a 'automoblie' and never has it been licened as one....
These things get moved once and then usually never move again....

Answer 1

I don't like trailer's either as they do seem to increase in value much more slowly than other places. The problem is, although you don't pay standard "rent' you are essentially renting the land. This cost goes up over time and gets to be a huge sum (if it isn't already). Nobody particularly want to pay this, so most people just go look for some other property where they won't have this cost.

Still, this is probably better than renting so if you can't afford anything else then go ahead, but if I were you I'd try getting a standard house first and only get one of these as a last resort.

Answer 2

A trailor (mobile home) is not a good investment not only because of the depreciation but it is not considered real property and the resale value is almost extinct. Also because it is not real property, it will need to be registered and licensed just like a car would through the Dept of Motor Vehicles.

If you are pre-approved for a loan, shop around and see if you like any of the homes where you will be. You can do this on your own or with an agent but if your just looking and want more freedom to be on your own to look at whatever attracts your eye you would be better off alone at first. Once you find a house you like you can then work with an agent. Just make sure you interview several agents before you decide who to go with so that you are comfortable.

Then go looking again and tell your agent what it is you exactly want. That is why I suggest you look by yourselves to get your wants and needs separated enough so the process for you can go smoother.

Once you find the house and put in an offer you will be much happier with your decision then you would if you did not take these steps.

You must realize that this is an emotional purchase and if you let your emotions guide you, you may not get exactly what you would like, your transaction won't be as smooth so you will be frustrated because all it takes is to understand the process.

Answer 3

I would be very leary of a 31 year old mobile home. Way back then, they were built with much lesser standards. Get a professional inspector to go thru the place with a fine tooth comb. If the place has been properly maintained, it might be okay. But chances are, it has some problems.

My next question is how much land goes with this mobile home? The land value increases but the trailer will depreciate. If there's no land included, forget this deal.

This could be a good idea for you. You could own the property at the end of 5 years instead of just paying rent. You could bring in a new modular home at that point.

Answer 4

Interesting tidbit: trailers are not real estate (in most jurisdictions). Trailers are "motor vehicles" and are "personal property", at least in my state. They usually go down in value over time.

The question of whether to rent or buy depends on a lot of things. We're in a down market right now that's pretty bad... so a lot of homeowners lost equity but renters did not. Also, it depends on how long you're living in the house. If you're going to move within 5 years, it's probably not worth buying because of the market and all the costs associated with it.

Answer 5

A trailer is just like a car, it will never increase and always decrease in value. And they are not easy to get insurance on. Many carriers will only insure new trailers.