Manufactured vs traditional houses (section 8, real estate, rent)
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Considering the price range of a manufactured home would you consider it a descent investment or would i just be throwing money away? I'm unsure of which route i want to go if i want to buy land and throw a manufactured home on it or if i should buy a traditional home. I know with the manufactured houses i can get more bang for my dollar but is that bang overrated?
Any info you guys can offer me will be highly appreciated. Thanks.
Daniel
Considering the price range of a manufactured home would you consider it a descent investment or would i just be throwing money away? I'm unsure of which route i want to go if i want to buy land and throw a manufactured home on it or if i should buy a traditional home. I know with the manufactured houses i can get more bang for my dollar but is that bang overrated?
Any info you guys can offer me will be highly appreciated. Thanks.
Daniel
I wouldn't consider it an investment, but would consider it cheaper housing... There are some communities that are quite nice. I've seen manufactured homes looking very decent, particularly their baths. Judging by the looks only, I'd prefer them to a lot of shabby, old traditional houses. The problem to me would be the kind of people you're surrounded by...
As far as quality goes, don't have much of an idea. I've always wondered myself how good cooling and heating is in them. Considering not too many lenders give loans for these homes and normally at higher rates, can't be that wonderful of an idea... even though sometimes I wish I were 55+. There's such a pretty park just a mile from my office, full of mature trees and flowers, quiet and yet in the heart of the city. There are brand-new homes for up to 70K and the neighbors are decent retired folks, not trailer trash. Of course, you pay rent for the space as well and it's not exactly cheap. I believe it costs about $300/month, if not more now. As far as I know, the home itself is a deprecating item as opposed to appreciating... and most likely more difficult to sell.
That's what I've gathered from reading because I've always been curious about them, too. Would be interesting to hear from somebody who has personal experience with them.
Some of the newer (say built in the past 10 years) mfg'd homes are actually pretty nice, especially if they're tape and textured and set on a stem wall. Many are 2X6 construction and are very well insulated. So the quality of a mfg'd home has really increased over the past decade.
Here is AZ they seem to be a popular alternative, especially for folks that want a little land (i.e. 2 acres +/-), and generally speaking they're less expensive than site-built. However, in certain areas, the mfg'd homes have continued to increase in price even in this down market, and some may be overvalued. So just be careful and really know the market before you jump.
Also, they are more difficult to get financing on, and interest rates will be higher on a mfg'd home. Consider, too, even if you won't be needing a loan to purchase, it might affect your resale down the road if financing becomes an issue for the next potential buyer.
Anyway, bottom line - I think they can be a good deal (or not, depending). Just check your options before you decide.
Considering the price range of a manufactured home would you consider it a descent investment or would i just be throwing money away? I'm unsure of which route i want to go if i want to buy land and throw a manufactured home on it or if i should buy a traditional home. I know with the manufactured houses i can get more bang for my dollar but is that bang overrated?
Any info you guys can offer me will be highly appreciated. Thanks.
Daniel
hi Daniel, i've been doing some research into manufactured homes lately, and from what i can tell the depreciation of double wide homes is much smaller than single wide. here's what's important: if you're going to set your home on rented property, that's fine, just try to get a nice patch of land, the better the scenery and the more open space around you, the greater the chance it will retain it's value.
first, don't buy into the "trailer park trash" myth. there are far more low class people living outside parks in traditional homes. i've spoken to numerous folks who live in trailer parks and i'm happy to report that they all seemed to care deeply about their homes and had a sense of pride about their park and keeping it clean. sure, i've seen some shabby parks too. but has anyone considered that such may be the case due to a larger economic and social problem in the United States? and the only reason it's not as visible outside parks is because low-income folks are living on Section 8 paying the bloated rents of home owners who keep wanting more and more? i imagine that the trailer trash myth was contrived as a way to dissuade investment toward what is otherwise a wonderful opportunity to drastically reduce one's debts while still enjoying the amenities of owning one's own home. it's hardly surprising that the banks who stand the most to lose in such a turn of investment would be unwilling to offer loans for trailer homes. of course, the materials of a trailer home may be of a lower quality than traditional homes. consider, however, that traditional homes are often old and in dire need of upgrades and repairs, mostly the unaffordable kind that compels new home buyers to rely heavily on their credit, on top of their all ready burgeoning debt. how it is that Americans tolerate the outlandish pricing of real estate today is beyond me. there are viable alternatives to reduce one's cost of living, but the system is set up to keep us plugged into the grid of revolving debt.
good luck with your new trailer home if you so choose to do that.
Last edited by JimmyLane; 08-12-2007 at 07:41 PM..
FHA and VA will do financing on these manufactured homes (trailers) out west .Not here in the east.Manufactured homes are made alot better out west.My aunt just put a tripe wide 2500sq ft on 4 acres of land.They tied hers down with cable.(cable that is used on planes) Check into it.These homes are just as nice as some homes and in some cases even nicer.
Good luck.
There are larger banks that will finance manufactured homes, you can also get FHA or VA financing on them, if they are affixed (meaning that you have surrendered the titles for the home, turning it from personal property to real property.) and you have an FHA or VA foundation, which is the stem wall mentioned above. By doing this you also do not pay registration on it, like you would a car, you would then pay property taxes.
If you are financing the home as personal property and putting it on rented land, the interest rates are most of the time considerably higher, and the financing harder to obtain.
As far as construction, there are many manufacturers that build a quality product, sometimes even higher quality than you may find in some site built homes, and there are those that build crap. You need to be able to tell the difference.
Appreciation vs. depreciation, you'll find that the homes in parks or on rented land will most likely depreciate, as when you go to sell it, it can cost about $5k to move and reset it. As real property, it is appreciating at least what the land alone would, but more than likely at a much higher rate.
I am currently looking into buying 2-4 acres and was thinking about building a double wide manufactured home on that land, just wasn't sure if it was worth my while to do so. I found a 4 acre lot in southwest AZ in postal code 85735 for 55K Is that too much Heather?
As always your responses were very helpful, I'll leave the option open.
Would any one happen to know which companies build the premium product as opposed to the "CRAP"? And what the actual cost is to having one built?
Thank you for the compliment, I pride myself in learning as much as I can, and only advising on that which I know about first hand.
Palm Harbor and Clayton or Luv both build good products, you'll find the Clayton costs a lot less than PH, though. Last I checked, they both used tounge-in-groove flooring with ring shank nails or screws, low e-windows and Plex plumbing, which are some of the more important products that are different than other manufacturers.
I have not re-activated my real estate license, I had a baby recently, but will be going back to it within the next month or so. Moderator cut: off topic - private message
Heather - what do you think of the Schult mfg'd homes? I've seen some really nice ones. You can have them ground set and they seem so much like a site-built home - thicker interior walls, etc.
Also, along with Palm Harbor and Clayton, some of the Cavcos are nice. There's several different lines, though, and some are nicer than others.
OK, are you ready for a data dump? Here's what I've learned.
Manufactured Home vs Modular Home -
Manufactured Homes are built to Federal HUD specifications and are built and attached to a steel frame with wheels. They can be placed above ground with skirting and look like a typical "trailer house", or they can be countersunk and backfilled, then landscaped to look just like a site-built home - this is particularly true if your home has "tags" (ie extentions) that break up the boxy look and 4-12 or greater pitched roof (that is more typical of a site-built home). Current standards for such homes are pretty high - though not necessarily as high the local standards (depending on where you live).
Modular Homes are built to conform to LOCAL (where they will be) building specs and arrive on a flatbed truck and are then lifted into position on a perminant foundation and even come in multistory versions. Because they conform to the local building standards they end up being treated as any other site-built home would (generally even in regards to appreciation, loans etc) and when well-designed are indistinquishable from a site-built home.
In general, building standards for these homes (both mobile and modular) have inproved dramatically, and if you select a quality builder, chances are your home will be BETTER constructed than many of the locally site-built homes because many manufacturers surpass the HUD standards by quite a bit - particularly at the high end of the scale. They are also HIGHLY customizable with an almost endless variety of possible designs and reconfigurations possible and need not look anything like the typical "box" that most people think of.
Think that manufactured homes are "trailer trash"? Think again. Look at the photos and specs of the homes built by companies like Cavco (check out their top of the line Durango Biltmore), Karsten (check out their massive RC-31), or the Mercedes-Benz of manufactured homes Silvercrest (get a load of their ME-20 Manor series - their website has amazing photos). Any of these homes are FAR nicer (and better built) than the site-built home I own now.
The first thing you should do is get yourself a copy of the "Grissim Rating Guide to Manufactured Homes" and the "Grissim Buyers Guide to Manufactured Homes and Land". These are GREAT books and can be found on Amazon.com or the mdfhousing.com website (or do a web search on "Grissim Guide". These books are TERRIFIC. The former willl list all the manufacturers, give a brief history of each company and explain how they do business - then rate the construction quality of each of them on a 1-10 scale. While some outfits do rate only so-so (Fleetwood for example), others (those mentioned above and several others) rate very highly indeed.
The second book explains the construction ratings in detail, describing all the aspects of how the ratings are derived and step you though the entire searching, selection and buying process, telling you what to watch out for and what to look for. Two weeks ago I showed a copy of one of the books mentioned above to a friend of mine who once owned a construction business and he was very pleasantly surprised at the standards that many of these manufacturers have for their homes (especially those rated 8 and above in the book) and told me that those standards were far higher than those of most of the homes he had built.
The biggest drawback (it seems to me) in buying a manufactured or modular home is the fact that the dealerships are built on the car dealership model - meaning that you have to go through much of the same "wheeling and dealing" crap that you do with the purchase of a new car. This means there is lots of room for high-pressure "business shinanagins" just like with the purchase of a new car so it really pays to understand how the dealerships work, what are worthwhile options and what are not. The good news is that the manufactured home crash around 2000 wiped out many of the more shady businesses and those that remain sound like they are generally more trustworthy and honest. Still, it pays to tread carefully in those waters.
From what I have learned, manufactures homes can be a terrric deal - much less expensive (and even of higher quality) than many site-built homes. Just be sure and DO YOUR HOMEWORK.
For more info, check out specialized MH website discusssion boards such as:
Manufactured Home Forum - Powered by vBulletin (http://www.manufacturedhomeforum.com/vb/ - broken link)
Hope this all helps. Any other questions, feel free to ask. If I've learned the answer I'll let you know.
Ken
Last edited by LordBalfor; 08-14-2007 at 02:38 PM..
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There are some communities that are quite nice. I've seen manufactured homes looking very decent, particularly their baths. Judging by the looks only, I'd prefer them to a lot of shabby, old traditional houses. The problem to me would be the kind of people you're surrounded by...
