Why not buy mobile homes instead of overpriced traditional homes?
Why not buy mobile homes instead of overpriced traditional homes?
I live in a HCOL area. The cheapest 1-bedroom (700 sqft) I can find cost $300-400k. I've heard that people spend $1mil on their homes (2-3 bedroom). I'm balking at that number.
Yet, I occasionally find mobile/manufactured home listing for $100-200k, this is for 3-bedroom (2000 sqft). The price differential is ridiculous.
So... why aren't people buying mobile/manufactured homes instead? Please help me understand what I'm missing.
I've figured out a few things by reading around:
1) Desirability - Usually associated with trailer parks "ghetto" environments, there's social stigma to it. Honestly, I don't care about "social stigma" if it will increase my net worth.
2) Safety, related to the first point and probably the only legitimate concern - I've seen mobile/manufactured homes in my town (although its very rare), which is where all the middle-class to upper-class people live. Also, the other option is just buy the land and buy the mobile home, so I can live in a nice/safe neighborhood, it will still end up to be cheaper than buying a normal home.
3) Poor Quality / Limited Shelf Life / Poor Re-sale value - This is a legitimate concern. But as a forever renter, I'm basically comparing the two. If the mobile home has a 20-year "expiration date", it's fine if it reduces my rent for 20-years, and if it's so much cheaper than the million dollar mortgage.
4) Predatory Land Ownership Practices - I've seen articles of how you don't own the land, only the home, so effectively you are paying mortgage + land_rental. But even if that's the case, that still works out to be cheaper than a $1mil home mortgage payment. Also, why not just buy the land outright so you don't have that problem?
What else am I missing? Am I misguided, or do you agree with me?
Yet, I occasionally find mobile/manufactured home listing for $100-200k, this is for 3-bedroom (2000 sqft). The price differential is ridiculous.
So... why aren't people buying mobile/manufactured homes instead? Please help me understand what I'm missing.
I've figured out a few things by reading around:
1) Desirability - Usually associated with trailer parks "ghetto" environments, there's social stigma to it. Honestly, I don't care about "social stigma" if it will increase my net worth.
2) Safety, related to the first point and probably the only legitimate concern - I've seen mobile/manufactured homes in my town (although its very rare), which is where all the middle-class to upper-class people live. Also, the other option is just buy the land and buy the mobile home, so I can live in a nice/safe neighborhood, it will still end up to be cheaper than buying a normal home.
3) Poor Quality / Limited Shelf Life / Poor Re-sale value - This is a legitimate concern. But as a forever renter, I'm basically comparing the two. If the mobile home has a 20-year "expiration date", it's fine if it reduces my rent for 20-years, and if it's so much cheaper than the million dollar mortgage.
4) Predatory Land Ownership Practices - I've seen articles of how you don't own the land, only the home, so effectively you are paying mortgage + land_rental. But even if that's the case, that still works out to be cheaper than a $1mil home mortgage payment. Also, why not just buy the land outright so you don't have that problem?
What else am I missing? Am I misguided, or do you agree with me?
Last edited by fatFIRE on Sat Apr 11, 2020 12:19 pm, edited 1 time in total.
Re: Why not buy mobile homes instead of overpriced traditional homes?
They do tend to be undesirable. I think Sandtrap recently posted about what it’s like to manage a six unit mobile home park.
I think the land is the big difference. In SF, I assume the reason a home is a million dollars, is because the land it sits on is worth about 800K. I’ve seen the HGTV shows of SF, and the structures certainly aren’t what’s driving those prices.
I think the land is the big difference. In SF, I assume the reason a home is a million dollars, is because the land it sits on is worth about 800K. I’ve seen the HGTV shows of SF, and the structures certainly aren’t what’s driving those prices.
- unclescrooge
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Re: Why not buy mobile homes instead of overpriced traditional homes?
County assessor assesses my land value at over $1 million in SoCal. Whether you choose to build a nice house or park a trailer is up to you.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Mobile homes are fragile and are easily damaged in severe weather.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Some poor but amusing metaphors, perhaps.fatFIRE wrote: ↑Sat Apr 11, 2020 12:15 pm I live in a HCOL area. The cheapest 1-bedroom (700 sqft) I can find cost $300-400k. I've heard that people spend $1mil on their homes (2-3 bedroom). I'm balking at that number.
Yet, I occasionally find mobile/manufactured home listing for $100-200k, this is for 3-bedroom (2000 sqft). The price differential is ridiculous.
1
So... why aren't people buying mobile/manufactured homes instead? Please help me understand what I'm missing.
I've figured out a few things by reading around:
1) Desirability - Usually associated with trailer parks "ghetto" environments, there's social stigma to it. Honestly, I don't care about "social stigma" if it will increase my net worth.
2) Safety, related to the first point and probably the only legitimate concern - I've seen mobile/manufactured homes in my town (although its very rare), which is where all the upper-class people live. Also, the other option is just buy the land and buy the mobile home, so I can live in a nice/safe neighborhood, it will still end up to be cheaper than buying a normal home.
3) Poor Quality / Limited Shelf Life / Poor Re-sale value - This is a legitimate concern. But as a forever renter, I'm basically comparing the two. If the mobile home has a 20-year "expiration date", it's fine if it reduces my rent for 20-years.
4) Predatory Land Ownership Practices - I've seen articles of how you don't own the land, only the home, so effectively you are paying mortgage + land_rental. But even if that's the case, that still works out to be cheaper than a $1mil home mortgage payment. Also, why not just buy the land outright so you don't have that problem?
2
What else am I missing?
3
Am I misguided, or
4
do you agree with me?
1.
(a) People order Prime Rib vs Chicken Fried Steak because; they can afford it easily, are willing to pay for it, and choose that quality standard, and they like Prime Rib.
They care about; "Desirability", "Perceived Safety, "Quality/Resale", "Full ownership" and "Can afford a Mortgage".
(b)People order Chicken Fried Steak vs Prime Rib because; it is affordable, and they like Chicken Fried Steak.
They do not care about; ""Desirability", "Perceived Safety, "Quality/Resale", "Full ownership" and "Cannot afford a Mortgage".
2
Affordability and lifestyle and financial aspirations are varied: IE: Porche Cayenne, Lexus, Toyota, Geo Metro, etc.
No better or worse, no good or bad, no wrong perceptions.
3
No. But, a broader view helps. Everyone is different, no exceptions. Like trying on shoes. Or, $5000 watches vs a $12 Casio.
4
There are no agreements and no disagreements, just different paths taken of one's own choice without validation or invalidation.
Actionably: moving from a UHCOL to LCOL area can be a game changer. . . with funds left over for "Prime Rib".
j
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Re: Why not buy mobile homes instead of overpriced traditional homes?
The irony is my $1.2M lot is more suited to fit an oversized trailer than a nice houseunclescrooge wrote: ↑Sat Apr 11, 2020 12:29 pm County assessor assesses my land value at over $1 million in SoCal. Whether you choose to build a nice house or park a trailer is up to you.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Zoning probably precludes mobile homes in a 1.2M lot area.
Re: Why not buy mobile homes instead of overpriced traditional homes?
My Mother’s family mostly all live(d) in single wide Mobile homes. I have always found them to be homey and welcoming.
My grandparents collected antiques. Their homes were beautiful. They also built an “outdoor” addition with brick and windows. Their boat was docked their too on the Saginaw river.
My grandparents collected antiques. Their homes were beautiful. They also built an “outdoor” addition with brick and windows. Their boat was docked their too on the Saginaw river.
Last edited by PoppyA on Sat Apr 11, 2020 12:49 pm, edited 2 times in total.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
I've often thought about this, and actually like mobile homes.
When my uncle retired to Oregon be planned to build his own house and was a fine finish carpenter. But materials were so costly that he bought a double wide instead and set to replacing all outside walls with 4x6. This was in 1974.
Anyway, one advantage I see is that if you put a mobile on a nice piece of land, it's no big deal for the next buyer to get rid of it and build.
Unlike demoing a stick built house that DW doesn't like.
When my uncle retired to Oregon be planned to build his own house and was a fine finish carpenter. But materials were so costly that he bought a double wide instead and set to replacing all outside walls with 4x6. This was in 1974.
Anyway, one advantage I see is that if you put a mobile on a nice piece of land, it's no big deal for the next buyer to get rid of it and build.
Unlike demoing a stick built house that DW doesn't like.
Re: Why not buy mobile homes instead of overpriced traditional homes?
A lot more people buy mobile homes than you might think. Go study the history of Clayton Homes, which was acquired by Berkshire Hathaway. The history and economics of the business is deeply fascinating. Since getting absorbed into Berkshire, Clayton has retained a lot more of its loans, and perhaps somewhat surprisingly, the default rate of mobile home borrowers during the financial crisis of 2008-2009 was relatively low. It's been a cash cow for Berkshire.
Re: Why not buy mobile homes instead of overpriced traditional homes?
If you are renting a space in a mobile home park in a high cost of living area they may decide to convert the land to some other use and you would be out of luck. Most likely you could not find any other place to move the mobile home to and even if you could that is very expensive. Most likely you would just abandon the mobile home.
There are restrictions on doing that which will vary by state and how your lease for the land is written but is a very real risk. Some of the inexpensive places you see might be on land that is subject to conversion in ten years which would make them a lot less valuable than a place that has 99 left on the land lease.
Mobile homes may also not age well. You could be in a nice park with nice mobile homes but in 20 years when they are all 20 years older the place might not be so nice.
Last edited by Watty on Sat Apr 11, 2020 12:59 pm, edited 1 time in total.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Maybe you already know this, but mobile home parks charge you rent for placing your home there. So you only own the structure and not the land, but really difficult to move if rents increase. As others have said, the land is often more valuable and does not depreciate like a structure.
But I’ve thought about buying rural property, either at the coast or in a forested area, and buying a prefab house or a shipping container structure, lots of clever designs coming out. In that case, I think it makes sense.
But I’ve thought about buying rural property, either at the coast or in a forested area, and buying a prefab house or a shipping container structure, lots of clever designs coming out. In that case, I think it makes sense.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Because in UHCOL places, 80% of the cost of a home, is the dirt it sits on. That's why mobile homes in Malibu can sell for several million. A fair comparison is the cost of a mobile home and a lot in the same location.
https://www.businessinsider.com/luxury- ... ome-2019-9
https://www.businessinsider.com/luxury- ... ome-2019-9
Last edited by oldfort on Sat Apr 11, 2020 1:03 pm, edited 2 times in total.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Here is one good reason: My in-laws sold their 2-story home in a HCOLA and bought a manufactured 1 story home in a retirement community. "Rent" of the land was $700 a month, 15 years later it is now almost $2000 a month.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Shipping container homes seem to cost as much as "stick built" when finished to a comparable level.willardx wrote: ↑Sat Apr 11, 2020 12:58 pm Maybe you already know this, but mobile home parks charge you rent for placing your home there. So you only own the structure and not the land, but really difficult to move if rents increase. As others have said, the land is often more valuable and does not depreciate like a structure.
But I’ve thought about buying rural property, either at the coast or in a forested area, and buying a prefab house or a shipping container structure, lots of clever designs coming out. In that case, I think it makes sense.
Re: Why not buy mobile homes instead of overpriced traditional homes?
My experience is that a mobile or manufactured home can be a fine place to live (been there, done that) but is not a particularly good investment. A mobile home will depreciate most likely rather than appreciate. They are just not nearly as long lasting as a stick built dwelling.
If you want a low cost place to live and zoning is not an issue, there is no reason not to have one if it meets your needs. They are much more affordable. But in 20 years, don't expect to have built up much of an equity or have anything of value to pass on to your heirs.
If you want a low cost place to live and zoning is not an issue, there is no reason not to have one if it meets your needs. They are much more affordable. But in 20 years, don't expect to have built up much of an equity or have anything of value to pass on to your heirs.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
I think it's all social and cultural, not physical, engineering, or technological.
For complicated and imponderable reasons, mobile home owners in mobile home parks face housing insecurity because they do not own the land under their home. Things can go well for years, and then the park owner can double or triple rents, sometimes as a technique for forcing tenants out because the park has been sold to someone who wanted to build something else on it. If you are forced out of the mobile home park you are in, it is not easy to find another one, particularly since the homes themselves are not designed to be moved more than once, and doing so is expensive and runs a risk of damaging the unit.
Mobile home ownership is subject to all kinds of societal discrimination e.g. in things like zoning laws. Just as one example, in some parts of the US it's not too hard to put a mobile home in your backyard as an in-law apartment, but in many it is next to impossible.
In short, they should be a very interesting alternative, especially for lower-income people. Issues of physical safety, attractiveness, energy conservation, etc. exist but could be dealt with. However, for whatever reason--influence of realtors and the mortgage industry, I'd guess--things are structured in favor of traditional houses and against mobile homes. It's just not the carefully-cultivated, well-propagandized "American dream."
Great "99% Invisible" episode about this:Immobile Homes
For complicated and imponderable reasons, mobile home owners in mobile home parks face housing insecurity because they do not own the land under their home. Things can go well for years, and then the park owner can double or triple rents, sometimes as a technique for forcing tenants out because the park has been sold to someone who wanted to build something else on it. If you are forced out of the mobile home park you are in, it is not easy to find another one, particularly since the homes themselves are not designed to be moved more than once, and doing so is expensive and runs a risk of damaging the unit.
Mobile home ownership is subject to all kinds of societal discrimination e.g. in things like zoning laws. Just as one example, in some parts of the US it's not too hard to put a mobile home in your backyard as an in-law apartment, but in many it is next to impossible.
In short, they should be a very interesting alternative, especially for lower-income people. Issues of physical safety, attractiveness, energy conservation, etc. exist but could be dealt with. However, for whatever reason--influence of realtors and the mortgage industry, I'd guess--things are structured in favor of traditional houses and against mobile homes. It's just not the carefully-cultivated, well-propagandized "American dream."
Great "99% Invisible" episode about this:Immobile Homes
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Jim Clayton wrote a surprisingly good book, "First a Dream", in 2002. I can highly recommend it.Caduceus wrote: ↑Sat Apr 11, 2020 12:52 pm A lot more people buy mobile homes than you might think. Go study the history of Clayton Homes, which was acquired by Berkshire Hathaway. The history and economics of the business is deeply fascinating. Since getting absorbed into Berkshire, Clayton has retained a lot more of its loans, and perhaps somewhat surprisingly, the default rate of mobile home borrowers during the financial crisis of 2008-2009 was relatively low. It's been a cash cow for Berkshire.
To the OP: There is nothing wrong with living way beneath one's means, and expensive homes are one of the biggest impediments to this. Whether a mobile home can be suitable for any particular person depends on many factors including phase of life, location, and career. Often, sacrifices early in life pay off very well later on.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Hugely variable, not just on the state level but often on the county and town level, but a likely obstacle is "zoning laws."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
OP means "high-priced" traditional homes, not "overpriced." The market says they are worth the high price.
But about the question. It's kind of like having roommates. Sure, its cheaper, and sure, it would allow you to save money. But I am thankful for the fact that I was able to make enough that I didn't have to live in a mobile home, and didn't have to have roommates. Life is just better, and it's worth the cost. And it didn't stop me from saving enough to be comfortable in retirement.
But about the question. It's kind of like having roommates. Sure, its cheaper, and sure, it would allow you to save money. But I am thankful for the fact that I was able to make enough that I didn't have to live in a mobile home, and didn't have to have roommates. Life is just better, and it's worth the cost. And it didn't stop me from saving enough to be comfortable in retirement.
Re: Why not buy mobile homes instead of overpriced traditional homes?
I would suggest really looking into #4 if you are considering renting the land. John Oliver did pretty a scathing piece on the predatory aspect of the parks.
https://www.youtube.com/watch?v=jCC8fPQOaxU
https://www.youtube.com/watch?v=jCC8fPQOaxU
Re: Why not buy mobile homes instead of overpriced traditional homes?
There was a boglehead contributor who used to own trailer parks and made his fortune via "hard money loans" to the residents. He had some interesting posts (a year or two ago perhaps) but I forget his moniker. Anyone remember?
Re: Why not buy mobile homes instead of overpriced traditional homes?
What would be far more effective is to find two actual homes you might consider buying that fit your stated numbers - a $350k permanent structure, and a $150k mobile home. Then start comparing all of the pluses and minuses of each. It's quite likely the mobile home has most if not all of the negatives you list.
- As noted by others, you probably cannot simply buy land in most urbanized areas of CA and put a mobile home on it.
- Even if you could, the cost of the land would make up the majority of the price
- Buying second-hand, most of that 20-ish year lifespan is probably already used up. Keeping the place habitable may be quite costly.
- The mobile home may not be in an area you want to live
- Or have neighbors you want
- If it's in a park with those predatory land practices, you have the negatives of both housing models rolled into one. You have all the liability of owning the structure, which will require ongoing maintenance and depreciates rapidly, while having no stake in the land.
I suspect when you actually compare two real, potential places you'd want to live in, you'll understand why they are priced so differently. At that point you make up your mind whether the difference is actually worthwhile.
- As noted by others, you probably cannot simply buy land in most urbanized areas of CA and put a mobile home on it.
- Even if you could, the cost of the land would make up the majority of the price
- Buying second-hand, most of that 20-ish year lifespan is probably already used up. Keeping the place habitable may be quite costly.
- The mobile home may not be in an area you want to live
- Or have neighbors you want
- If it's in a park with those predatory land practices, you have the negatives of both housing models rolled into one. You have all the liability of owning the structure, which will require ongoing maintenance and depreciates rapidly, while having no stake in the land.
I suspect when you actually compare two real, potential places you'd want to live in, you'll understand why they are priced so differently. At that point you make up your mind whether the difference is actually worthwhile.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Some localities have ordinances and/or community CC&R's that prohibit mobile homes ... sometimes this can be worked around by being a manufactured (but not mobile) home or simply installing a permanent foundation that makes the "mobile home" not-"mobile". Other times the specifics of the building codes may make it more difficult.
Mobile homes are often installed in parks where the lot is rented, and the owner of the structure pays rent to the property owner. While there is some value in the structure in it's use to live in over time, it's a liability that requires constant maintenance to stay usable, and depreciates over time. The home structure/building is just a box that sits in the weather rotting. The property, the land, is the asset that tends to appreciate over time.
There are instances that through inflation and overly restrictive building codes that a old building might be worth more than the cost to replace it, but that's generally not the situation.
Mobile homes are often installed in parks where the lot is rented, and the owner of the structure pays rent to the property owner. While there is some value in the structure in it's use to live in over time, it's a liability that requires constant maintenance to stay usable, and depreciates over time. The home structure/building is just a box that sits in the weather rotting. The property, the land, is the asset that tends to appreciate over time.
There are instances that through inflation and overly restrictive building codes that a old building might be worth more than the cost to replace it, but that's generally not the situation.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Re: Why not buy mobile homes instead of overpriced traditional homes?
(deleted)
Last edited by goaties on Sat Nov 19, 2022 8:40 pm, edited 1 time in total.
Re: Why not buy mobile homes instead of overpriced traditional homes?
If my house ever burned down and i could do a cash option
I'd probably buy a used ice castle fishing house... similar to a mobile home. Not married...
I'd probably buy a used ice castle fishing house... similar to a mobile home. Not married...
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Imagine if you bought a home in HCOL CA 20 or 30 years ago vs a mobile home. The mobile home would be worthless and the real house would be worth multiples of what you paid. Of course, you cannot count on that always happening. I do believe in the principle of supply and demand though and don't see new land growing in desirable HCOL areas.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Reasons not to buy:
Not easily insurable past certain age
Not as easy to get mortgage
Relatively unsafe in storms
Relatively unsafe from fire
Depreciation
High utility bills
...
There are a great many reasons not to buy them but an old mobile home is certainly a lot cheaper than stick built. They are pretty expensive on the new end though. Personally I would only ever use them for temporary housing while I wait for another structure to be built.
Not easily insurable past certain age
Not as easy to get mortgage
Relatively unsafe in storms
Relatively unsafe from fire
Depreciation
High utility bills
...
There are a great many reasons not to buy them but an old mobile home is certainly a lot cheaper than stick built. They are pretty expensive on the new end though. Personally I would only ever use them for temporary housing while I wait for another structure to be built.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
I'm making some gigantic assumptions, but have you considered living in a stealth RV? If it were just me, and I was rooted in a VVHCOL with moon prices and I didn't really plan to stay more than 5-10 years, I might. Who knows? Maybe the market will crash to Earth and you could buy a former moon lot.
Re: Why not buy mobile homes instead of overpriced traditional homes?
We bought a brand new manufactured home last year in a VHCOL. Since buying a traditional home was not in the budget, I looked at it as the middle ground between renting and owning. It was cheaper to go with the manufactured home plus rent than to rent an apartment or condo. I think we will come out ahead and have a better place to live. Also there is rent control in our city although it will add up over several years (so will renting an apartment).
Reading some of these posts sound like they are referring to RVs in a trailer park. They are totally different.
Reading some of these posts sound like they are referring to RVs in a trailer park. They are totally different.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
I lived in mobile homes during grad school and 10 years after, with a young family, 2 kids) .
When we bought our current house, we moved for
a better neighborhood school,
lower utility bills,
insurance actually went down for a house worth 5x as much
loan was a much lower interest rate than on mobile homes
we do to the basement rather than run outside to a community shelter when the tornado siren goes off
more comfortable, since insulation is better.
Property tax did not go up 5x . Mobile homes are treated differently than single family homes.
Much more space:
Counting my basement I have 2x the heated space, plus a double car garage , storage space and a 15x26 three season insulated porch.
I did have a lot more maintenance,but the house was 30 years old.
I also didn't have someone telling what I could do to their land.
When we bought our current house, we moved for
a better neighborhood school,
lower utility bills,
insurance actually went down for a house worth 5x as much
loan was a much lower interest rate than on mobile homes
we do to the basement rather than run outside to a community shelter when the tornado siren goes off
more comfortable, since insulation is better.
Property tax did not go up 5x . Mobile homes are treated differently than single family homes.
Much more space:
Counting my basement I have 2x the heated space, plus a double car garage , storage space and a 15x26 three season insulated porch.
I did have a lot more maintenance,but the house was 30 years old.
I also didn't have someone telling what I could do to their land.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Hahaha, so true.HEDGEFUNDIE wrote: ↑Sat Apr 11, 2020 12:40 pmThe irony is my $1.2M lot is more suited to fit an oversized trailer than a nice houseunclescrooge wrote: ↑Sat Apr 11, 2020 12:29 pm County assessor assesses my land value at over $1 million in SoCal. Whether you choose to build a nice house or park a trailer is up to you.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
To many folks, buying a mobile home on a lot, fee simple (land included), or a manufactured home, is a huge step up from renting in a mobile home park or "affordable" rental, etc.
Many families grow up in a single wide on a lot with a yard in a good neighborhood.
j
Many families grow up in a single wide on a lot with a yard in a good neighborhood.
j
Re: Why not buy mobile homes instead of overpriced traditional homes?
Two words: tornado bait.
Last edited by Nicolas on Thu Apr 16, 2020 10:16 am, edited 1 time in total.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
Their life is short. In 25-30 years thy are super old. Yet I would buy a 80 year old house and not think twice about it. Around here you have to be out in the sticks to put one in if you want to avoid the trailer parks.retiredjg wrote: ↑Sat Apr 11, 2020 1:08 pm My experience is that a mobile or manufactured home can be a fine place to live (been there, done that) but is not a particularly good investment. A mobile home will depreciate most likely rather than appreciate. They are just not nearly as long lasting as a stick built dwelling.
If you want a low cost place to live and zoning is not an issue, there is no reason not to have one if it meets your needs. They are much more affordable. But in 20 years, don't expect to have built up much of an equity or have anything of value to pass on to your heirs.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
The biggest thing is that you’re still renting, with all the disadvantages that go with renting (landlord controls the property, rent increases, etc), with the additional disadvantage that you can’t move unless you sell the house, which depreciates like a car.
And I’ll echo someone upthread who said that in a HCOL area, there’s the constant risk of the landlord selling the property for redevelopment, and you get nothing except a date to move. This did happen to a friend of mine.
Honestly, if you’re just looking for ultra cheap housing and you’re not opposed to renting, why not rent a mobile home instead of buying?
And I’ll echo someone upthread who said that in a HCOL area, there’s the constant risk of the landlord selling the property for redevelopment, and you get nothing except a date to move. This did happen to a friend of mine.
Honestly, if you’re just looking for ultra cheap housing and you’re not opposed to renting, why not rent a mobile home instead of buying?
Re: Why not buy mobile homes instead of overpriced traditional homes?
Lack of a basement when storms come in the summer s a major reason. I
The areas I want to live in are not zoned for mobile homes.
The areas I want to live in are not zoned for mobile homes.
Re: Why not buy mobile homes instead of overpriced traditional homes?
did you do a forum search before posting your question?So... why aren't people buying mobile/manufactured homes instead? Please help me understand what I'm missing.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
It's worth consideration. In my high-cost area, it comes down to selection. Little available in either category. There are a few localities with easier zoning, and a few communities which had manufactured houses on individually owned land. But few for sale. Those on owned land were somewhat cheaper than conventional houses, but not by a huge margin -- about what you might expect for the cheaper house and neighborhood.
You look for stuff built around or after the late 1970's when there was a major upgrade in manufactured house requirements and lead paint in regular houses was discontinued.
Senior-only communities seem nice and quite acceptable compared to general family parks which feel a little sketchy.
It's hard to find a nice and affordable park in a high cost area -- it's too tempting for the park owner to sell the valuable land for more lucrative use.
In the end, to stay in a location closer to family, I found a few more choices in condos. Some family members were shocked that I could have chosen a mobile home when I could afford a conventional home.
You look for stuff built around or after the late 1970's when there was a major upgrade in manufactured house requirements and lead paint in regular houses was discontinued.
Senior-only communities seem nice and quite acceptable compared to general family parks which feel a little sketchy.
It's hard to find a nice and affordable park in a high cost area -- it's too tempting for the park owner to sell the valuable land for more lucrative use.
In the end, to stay in a location closer to family, I found a few more choices in condos. Some family members were shocked that I could have chosen a mobile home when I could afford a conventional home.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Probably better to look for a cheaper/smaller house in a desirable area which works to your advantage. Houses usually store wealth as well. Even if you pay $1m for it chances are you can sell it for at least $1m eventually when you decide to move on.
Re: Why not buy mobile homes instead of overpriced traditional homes?
If I lived where you live, I'd rent or buy a mobile home. Actually I'd probably move.fatFIRE wrote: ↑Sat Apr 11, 2020 12:15 pm I live in a HCOL area. The cheapest 1-bedroom (700 sqft) I can find cost $300-400k. I've heard that people spend $1mil on their homes (2-3 bedroom). I'm balking at that number.
Yet, I occasionally find mobile/manufactured home listing for $100-200k, this is for 3-bedroom (2000 sqft). The price differential is ridiculous.
So... why aren't people buying mobile/manufactured homes instead? Please help me understand what I'm missing.
I've figured out a few things by reading around:
1) Desirability - Usually associated with trailer parks "ghetto" environments, there's social stigma to it. Honestly, I don't care about "social stigma" if it will increase my net worth.
2) Safety, related to the first point and probably the only legitimate concern - I've seen mobile/manufactured homes in my town (although its very rare), which is where all the middle-class to upper-class people live. Also, the other option is just buy the land and buy the mobile home, so I can live in a nice/safe neighborhood, it will still end up to be cheaper than buying a normal home.
3) Poor Quality / Limited Shelf Life / Poor Re-sale value - This is a legitimate concern. But as a forever renter, I'm basically comparing the two. If the mobile home has a 20-year "expiration date", it's fine if it reduces my rent for 20-years, and if it's so much cheaper than the million dollar mortgage.
4) Predatory Land Ownership Practices - I've seen articles of how you don't own the land, only the home, so effectively you are paying mortgage + land_rental. But even if that's the case, that still works out to be cheaper than a $1mil home mortgage payment. Also, why not just buy the land outright so you don't have that problem?
What else am I missing? Am I misguided, or do you agree with me?
I live in an area where home prices aren't stupid, so I live in a 4000 square foot 5-bedroom home backed up to trees and a creek for the same price as your hypothetical 700 square foot 1-bedroom apartment with no view.
Last edited by HomerJ on Sat Apr 11, 2020 10:27 pm, edited 2 times in total.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
Re: Why not buy mobile homes instead of overpriced traditional homes?
In VHCOL, cheaper/smaller is still unafforable for most families. If you could afford a $1m home, I'm not sure you would be thinking of picking a manufactured home.
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Re: Why not buy mobile homes instead of overpriced traditional homes?
My in-laws managed a mobile home park for a number of years and made pretty good money with it, but they eventually sold it and didn't speak very highly of it. It was a lot of work, and they wouldn't have made nearly as much as they did had my FIL not been very handy and able to do nearly all the repairs himself.
One of brothers-in-law owns and manages a campground where most of the renters are 'permies'. He ekes out a little from it but not much.
The home-to-land ratio might not be quite that high, but certainly over half of the price of real estate is the land under the structure. Rarely does that hold true in other places in the country outside Manhattan and similar locales.
The Sensible Steward
Re: Why not buy mobile homes instead of overpriced traditional homes?
- Technically, you could pay to move it.quantAndHold wrote: ↑Sat Apr 11, 2020 8:24 pm The biggest thing is that you’re still renting, with all the disadvantages that go with renting (landlord controls the property, rent increases, etc), with the additional disadvantage that you can’t move unless you sell the house, which depreciates like a car.
And I’ll echo someone upthread who said that in a HCOL area, there’s the constant risk of the landlord selling the property for redevelopment, and you get nothing except a date to move. This did happen to a friend of mine.
Honestly, if you’re just looking for ultra cheap housing and you’re not opposed to renting, why not rent a mobile home instead of buying?
- Dependent on the area it could appreciate
- There is risk that the park is sold
- Not sure about other areas, but the home cannot be rented out to someone else.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Around here, where we have a lot of retired people, a common restriction on mobile homes in the better senior parks is that no one can live in the mobile unless they are on the deed. <P>ReadyOrNot wrote: ↑Sat Apr 11, 2020 10:04 pm
...Senior-only communities seem nice and quite acceptable compared to general family parks which feel a little sketchy.
It's hard to find a nice and affordable park in a high cost area -- it's too tempting for the park owner to sell the valuable land for more lucrative use...
This precludes having a roommate, having your under 55 child come to stay with you, etc. It is quite common for a couple to buy a mobile in one of these parks and everything goes well until one passes, and the survivor can not afford to stay without a roommate or possibly some live in help. The result is often a forced sale at a distressed price.
Answering a question is easy -- asking the right question is the hard part.
Re: Why not buy mobile homes instead of overpriced traditional homes?
I see a lot of misunderstanding in this thread. Many mobile home parks are owned by the residents, they are not rented spaces. Basically, it is run by an association that collects a monthly fee from each of the home owners and the board members are all park residents. When you buy a residence in the park, you are also buying an equal share in ownership of the park.
My aunt and uncle live in such a park in Southern California, and it has been fantastic for them. The park is originally from the mid-70s, so a lot of the homes are older, but the place is absolutely immaculate. Some people have put modern new homes in those same spaces and this is what my uncle did.
The park has a rule that only owners can live there, no renting. This is what seems to keep the place respectable. It is mostly a 55+ place but there are some kinds of exceptions, I think.
It is located in a desirable location in Southern California and their monthly payment is only about $300, and that includes cable and trash. The payment may actually go down when the park pays off their mortgage note. This has made the values of the homes go up quite a bit (effectively, the share of ownership has become more valuable).
There is always some underlying conflict in set ups like this, according to what I see. In this park, it is the group that wants to do the minimum possible versus the group that would happily pay a bit more for better services. For instance, when the note is paid off, there are those who want to lower the monthly fee and those who want to keep it the same and make more improvements.
My aunt and uncle live in such a park in Southern California, and it has been fantastic for them. The park is originally from the mid-70s, so a lot of the homes are older, but the place is absolutely immaculate. Some people have put modern new homes in those same spaces and this is what my uncle did.
The park has a rule that only owners can live there, no renting. This is what seems to keep the place respectable. It is mostly a 55+ place but there are some kinds of exceptions, I think.
It is located in a desirable location in Southern California and their monthly payment is only about $300, and that includes cable and trash. The payment may actually go down when the park pays off their mortgage note. This has made the values of the homes go up quite a bit (effectively, the share of ownership has become more valuable).
There is always some underlying conflict in set ups like this, according to what I see. In this park, it is the group that wants to do the minimum possible versus the group that would happily pay a bit more for better services. For instance, when the note is paid off, there are those who want to lower the monthly fee and those who want to keep it the same and make more improvements.
Re: Why not buy mobile homes instead of overpriced traditional homes?
The obvious short answer is that for mobile home you just buy a (poor quality) structure. Not the land. The price is given mainly by the land. In theory you cam buy a 1 million empty lot and drop a 200k mobile home on it, but you still spend 1.2 million, versus 1.5 which will give you a decent house.
Another issue with the initial post is the net worth impact. Real estate in good area proved to be a good investment and is leveraged. So it usually helps the NW.
Another issue with the initial post is the net worth impact. Real estate in good area proved to be a good investment and is leveraged. So it usually helps the NW.
Last edited by Starfish on Sun Apr 12, 2020 2:49 am, edited 1 time in total.
Re: Why not buy mobile homes instead of overpriced traditional homes?
Those are not 100k in 1 million $ area.kramer wrote: ↑Sun Apr 12, 2020 2:00 am I see a lot of misunderstanding in this thread. Many mobile home parks are owned by the residents, they are not rented spaces. Basically, it is run by an association that collects a monthly fee from each of the home owners and the board members are all park residents. When you buy a residence in the park, you are also buying an equal share in ownership of the park.
Re: Why not buy mobile homes instead of overpriced traditional homes?
I agree with Jimmy Buffet (excerpt from Migration):
"And mobile homes are smotherin' my keys;
Well I hate those bastards so much.
I wish a summer squall would blow them
all the way up to fantasy land.
They're ugly and square, they don't belong here.
They look a lot better as beer cans."
"And mobile homes are smotherin' my keys;
Well I hate those bastards so much.
I wish a summer squall would blow them
all the way up to fantasy land.
They're ugly and square, they don't belong here.
They look a lot better as beer cans."