How can you build Equity with a buying a Modular Home?

Question

And how much land do you need with a Modular Home to build Equity on?

Answer 1

Your land will appreciate but the mobile home depreciate, so you are unlikely to gain any equity at all. After about 20 years the mobile home will be a liability and decrease the value of the land as it is very costly to dispose of.

Answer 2

Modular homes are built in a factory to meet or exceed the building codes where they will be set and permanently attached to a foundation. Modular homes are then brought to the build site in large pre fabricated pieces and assembled like a 3-D puzzle.

The fact that approximately 80% of the construction is done offsite differentiates them from stick built homes. The fact that they meet local building codes and are not built on a frame that can later be moved from the foundation differentiates them from manufactured homes (trailers), which are built to the less stringent HUD code.

Build equity by having less debt than what the value of the home is. The value is determined from nearby stick built homes of comparable square footage and rooms.

The people who answered on here about the homes not being worth anything are ridiculous. Often times the modular home is BETTER than the stick built home. They are built in a protected environment, sheltered from the elements. They also tend to have more structural wood in them which makes them better. You can read an interesting article at the website posted below by Bob Villa on modular homes.
http://www.bobvila.com/HowTo_Library/Modular_Homes_Make_Sense-Building_Systems-A1854.html

Also here is a site where you can see a modular home being put together and find other useful information on modular homes:

http://modularhomechoice.com/

Answer 3

I have no idea of where people are getting that modular homes decrease in value or don't build equity....NEITHER ARE TRUE.

People that make those claims have obviously not worked with them and are not familiar with the materials that they are constructed from.

Modular homes ARE TREATED THE SAME by banks in every facet...from the appraisal, to finance approval, to refinancing.

If modular homes were in any way inferior to a stick-built home, lenders would have completely separate guidelines for them....and guess what? THEY DON'T!

Appraisers DO NOT have to use other modular homes for comparable sales....they use STICK BUILT homes for comps....that is why the equity building is the SAME.

They are constructed out of the SAME materials as stick built homes...wood, drywall, insulation, thermal windows, they are place on the same type of foundation (slab or crawlspace) as any other stick built home.

People that claim that they are inferior materials have obviously never visited a warehouse to see how these are constructed. The only difference is additional parts are added so the sections fit together and they can be transported safely.

They have advantages: They go up faster, the interior is NEVER exposed to the elements (unlike regular framing which can be exposed to frequent rainstorms...how do you know your builder let it sufficiently dry?).

The only "hang up" on modular homes are in people's minds, and don't exist in the industry.

Answer 4

Let me explain equity. Your equity is your total assets less your total liabilities. It is also called Capital or Net Worth. You are asking about the share of equity you may have in a home or in real estate.

If you have a piece of land with a value of $10,000 and you owe a $6,000 mortgage on the land, your equity in the land is $4,000 and it is part of your overall net worth. As you pay off the principal of the loan you increase the equity in the land.

The quantity of land or the type of home does not matter. The equity in your property is the value of the property less the amount of debt on the property. Initially, when you buy the land or the home, your equity will be the amount you paid in cash.

Answer 5

I live in a modular home. It has substandard materials throughout. How it passed code is beyond me. It is a double wide on a crawl space. Our SEV has decreased over the past 23 years. The plumbing, heating and electrical are not the same as stick built house. I don t know if it is because it was built out of state, but it would never have passed code if it was stick built. The walls are less than 1/4" thick with strips between panels, some huge gaps in panels when I removed some of them. Siding put on over foam board, no exterior cdx, etc. Roof shingles just stapled on. Drywall stapled on. Yes, some modulars are as good or better than stick built. But the ones in my town I have seen are little better than trailers. If you plan to buy one, do your homework and inspect them with a fine tooth comb.

Answer 6

Modular homes are somewhere between a conventional structure and a mobile home. They tend to NOT increase in value as time passes, simply due to the nature of their construction and the quality of materials (or lack thereof).

Your land will maintain value or increase, but don't expect the same from the modular home.

Answer 7

alot of land, modular homes and manufactored homes are worth nothin....get at least 2 or 3 acres and pray.....