considering a mobile home in the valley (Bath: middle-class, real estate)

[chelle3271]

Unfortunately, trying to support two kids and a mortgage on a single salary, along with more than a few other financial setbacks, has put me in a financial bind. As a result, I have decided to sell my house and "downsize." At first I considered using the equity (about $30,000) to pay off debt and rent a house. However, I know I will take a huge hit come tax time, and when I look into rentals, the monthly rental is comparable to what I am paying now for a mortgage, which means I wouldn't be any better off, except almost all of the debt would be paid off.

A friend suggested I use the equity to put a substantial downpayment on a relatively new mobile home, get a mortgage for whatever is left and she thinks my monthly expenses for the mortgage and lot rental fees would be in the neighborhood of $600. If her numbers are accurate, my monthly costs for housing would be reduced by nearly $600, meaning I could much more quickly pay down my debt, not take a hit on taxes, and get back in the black within a few years.

Obviously, I have concerns. Here are the most pressing right now:

1. Is her suggestion realistic? What other financial considerations should I be thinking about?

2. Are the mobile home parks I have passed near Bath (greenbriar and hickory hills) worthy of consideration? I am concerned about what kind of residents I may be dealing with, and my experience with mobile home parks is reminiscent of the 70s--not always the best clientele.

3. What is the rate of depreciation of a mobile home built in the last couple of years? If I intend to own it for 3-5 years, am I running a serious risk here?

[Momof4littleones]

I would love to hear the answer to this question myself. I can't find decent affordable housing in NJ, and with four children and being recently divorced, my monthly income is going to be only $2,800 a month. Sounds like a lot, but its not when you consider that rent on a house the size I need is usually $1,500 a month in NJ, and then there's the issue of food, car fuel, heating fuel, car payment, medical, clothes, utilities, etc.

I have no idea where the manufactored homes are in PA. Can you steer me in the right direction?

[karen_s]

I have no clue about depreciation, but the communities you mention have good reputations. They seem to be quiet, well maintained, and peaceful. A friend of mine moved to Hickory Hills to "downsize" after her kids left the house and she is very happy there.

[roatchs]

Manufactured homes within communities do not appreciate, or depreciate, based solely upon the current "voodoo" market value system, like those homes deeded to land. The size, maintenance, and condition of the home itself is what determines the resale value!

To increase the resale price of a manufactured home one increases the habitable square footage and upgrades the mechanicals, as it should be with any resale home; and, in PA, manufactured home owners pay assessed taxes themselves, in addition to the lot fees for their water, sewer, and trash.

Buying a used home and updating it throughout is the way to receive a good resale profit; and, any home built after 1975 is HUD approved and thus can be mortgaged, rather easily now too. But, Realtors do not make out big; and, speculators love the quick profit so these deals are getting tougher to find.

IMHO, I would select a manufactured home over a row-home any day; and for the price per square foot there is no comparison to the value and afford-ability. The stigmatism is based allot upon the fact that these homes tend to be bought by the young and the elderly buyer, who either do not or cannot maintain them as all homes require.

So if you cannot afford to maintain a manufactured home, or cannot do it yourself physically; you should rent, not buy!

[Lehigh Valley Native]

Do not, I repeat, do not buy a new or somewhat new mobile home in a mobile home park. You will lose your money. Mobile homes in trailer parks do nothing but depreciate, unless, you buy one that is at least 10 years old. At that point you will not pay much for a trailer, maybe 10-15k for a decent 3 bedroom.
If you you are going to put it on a piece of land, that is a different ball game and worth the investment to buy a new one.
My brother bought a new Mobile (manufactured home) in Li'l Wolf in Orefield and lost his shirt. After only 5 years, he could only sell the house for half of what he paid.
Plus, mobile home parks are not a bargain anymore. He was paying almost 600 a month in lot rent, plus real estate taxes that equaled almost 100.00 a month. Yes, you pay real estate taxes on a trailer.
In taxes and lot rent, you are paying 700 a month. Do yourself a favor and rent an apartment.

[rfogle]

I would have to agree that a mobile home in a park is not a good investment. There are a couple of reasons why. First, once the dwelling is over 30 years old (and in some cases 20) it becomes very hard to get financing...that is one of the reasons that they tend to depreciate. Two...depending on how they are afixed to the property - even if they are new - you might have a problem getting financing. Three-there just aren't alot of buyers out there right now who 1. can qualify for financing for a mobile home and 2. want one.

I have very, very good friends who live in hickory hills and they love it. There is a pool and a playground and the people are very friendly, but they pay $360 a month in lot rent. and another $100 some odd dollars in taxes a month.

Of course, maybe a mobile home on its own land is something to consider. You could still have financing problems, but there is a level of value in that land. That land will also appreciate....maybe not in the next year, but at some point it will appreciate.

If this is going to be something you are seriously going to consider I would sit down with a Realtor and figure out what your home is going to get you and then take that info to a couple mortgage companies to see if this is something that is going to work for you....If you are gung ho on owning a property I would see what you qualify for and what payment you are comfortable with. Then go look at some homes in that price. There is always the chance that you will find something that suites your needs, in an area you like that won't be a pain to get rid of.

Wow...I didn't mean to write a book...I guess that is what insomnia will do to you.

[Lehigh Valley Native]

Originally Posted by rfogle

I would have to agree that a mobile home in a park is not a good investment. There are a couple of reasons why. First, once the dwelling is over 30 years old (and in some cases 20) it becomes very hard to get financing...that is one of the reasons that they tend to depreciate. Two...depending on how they are afixed to the property - even if they are new - you might have a problem getting financing. Three-there just aren't alot of buyers out there right now who 1. can qualify for financing for a mobile home and 2. want one.

I have very, very good friends who live in hickory hills and they love it. There is a pool and a playground and the people are very friendly, but they pay $360 a month in lot rent. and another $100 some odd dollars in taxes a month.

Of course, maybe a mobile home on its own land is something to consider. You could still have financing problems, but there is a level of value in that land. That land will also appreciate....maybe not in the next year, but at some point it will appreciate.

If this is going to be something you are seriously going to consider I would sit down with a Realtor and figure out what your home is going to get you and then take that info to a couple mortgage companies to see if this is something that is going to work for you....If you are gung ho on owning a property I would see what you qualify for and what payment you are comfortable with. Then go look at some homes in that price. There is always the chance that you will find something that suites your needs, in an area you like that won't be a pain to get rid of.

Wow...I didn't mean to write a book...I guess that is what insomnia will do to you.

360 is much more reasonable for lot rent, but the 600 my brother was paying is just insane. With taxes and mortgage you are paying more than a mortgage on a house.

If you put a manufactured home(mobile home built after 1975) on a permanent foundation with land you own, you can qualify for a conventional mortgage.

The other thing about buying a mobile home in a park, is it is a regular loan (chattel) much like a car loan and the int. rates can be 10% and much higher depending on your credit.

[rfogle]

"If you put a manufactured home(mobile home built after 1975) on a permanent foundation with land you own, you can qualify for a conventional mortgage."



Actual is is 1978. Once 2009 comes around it will be 1979. As a matter of a fact I just talked to a mortgage company that wouldn't do anything older than 1988 (Full disclosure...I sell real estate). The reason is that they were not built to National Housing Construction and Safety Standards at that time. I know at some point they were built to those codes but I don't know what year that is.

[roatchs]

Actually....I know some very reputable lenders who write loans everyday for manufactured housing, and, some very experienced realtors who sell them successfully too, still; and they will tell you that they actually believe that this type of community housing is going to increase in popularity; as the middle-class-boomers age and seek single level homes, and, as economic burdens shift taxation onto landholders.

Anything Factory-built after April-1975 is mortgagable thru FHA, VA, HUD, etc.

(Full disclosure...I buy real estate...)

[yoga light]

Have you looked further out in Lehigh Valley for housing?
I live in Green Acres Mobile Home Community in a little town off Route 222 called Breinigsville. It is very peaceful and quiet here and my neighbors are friendly, mostly retirees who take pride in their homes, quiet and helpful.
Our park rent includes a lot versus someone like Hickory Hills in Bath. Our lot rents (which vary depending on which home and what street its on) include
garbage, recycling, water, sewer, main road cleanup such as snow/debris/leaves, life-guarded pool, tennis and basketball courts, community house to use for parties.

I bought my place for cash moving here from N.J. and have no mortgage and have no regrets. Been here for 4 years in May. Have put in plants, trees and a veggie garden and treat the place like a regular house. Love the views of the Blue Mountain, the quiet, the nature all around and the spaciousness - it's a double wide with a 3 season porch - built ins in kitchen, 3 bedrooms, 2 baths, cathedral seiling, new heat (kerosene), air. Moving down to Philly. Place available now. Otherwise, look at newer places. Up to you. But definitely add Green Acres to your list as a potential place to live to save money, and be close to major highways without the Noise that goes with that!!!! Good luck.