| There is a long standing belief that all manufactured | | | | experience similar results. |
| homes (what many used to call "mobile homes") will | | | | Many are surprised to learn that studies done by the |
| "automatically" depreciate once it is purchased. While it | | | | largest insurer of manufactured homes, Foremost |
| is true that manufactured homes have lost value from | | | | Insurance Company, reveal that MHs appreciate for |
| their initial purchase price, this is not historically a given. | | | | the same reasons and at similar rates to site built |
| There are many examples of manufactured homes | | | | housing. But there are "caveats." Is the MH in a good |
| which have appreciated (gained) value. It should also | | | | location? Is the home well maintained? Another factor |
| be noted that site built houses, gain - or lose - value for | | | | of course is the local market conditions - a booming |
| similar reasons that manufactured homes do - as the | | | | economy will naturally enhance values, just as a |
| recent sub prime mortgage meltdown has | | | | slumping economy will hurt values. One must also point |
| underscored. | | | | out that when there is a glut of repossessions on the |
| Let's take a brief look at the factors which cause that | | | | market. That fact will hurt the MHs value, just as a glut |
| gain or loss of value. | | | | of foreclosures on the market hurt the value of site |
| Many are familiar with the old real estate adage, | | | | built houses. |
| "location, location, location!" The location of the home | | | | The "bottom line" is that MHs can be a very good |
| has a tremendous impact on its value. Let's use an | | | | investment in and of themselves. But let's step beyond |
| analogy to explain this example. | | | | the appreciation/depreciation issue, for just a few |
| Having lived in the Houston metro area, imagine a | | | | moments. Let's look at another analogy - one that I'm a |
| mansion from the River Oaks district being placed in | | | | little hesitant to make, because one shouldn't compare |
| Houston's Fifth Ward. What would happen to that | | | | a MH with a car or other vehicle. But let's do it for just |
| mansion's value? It would drop like a rock! Even a | | | | a moment, to make an important point. |
| gorgeous home, set in an older, blighted area will lose a | | | | Millions today lease a car. They know that their vehicle |
| lot of value. The reverse could happen too. If an older | | | | will depreciate, and they want to use as little of their |
| "challenged" home from the Fifth Ward and could | | | | money for that vehicle as possible. The rest of their |
| magically find its way onto a site in the River Oaks | | | | money that would have gone towards a higher car |
| district, it would immediately be worth more - just | | | | payment, they may invest for a good rate of return, or |
| because of its location. | | | | to have more fun, etc.. |
| The lesson is, what is the manufactured home's | | | | So, stop and think of the comparison! What if you |
| proposed location? Is the location upgrading, or going | | | | invest your housing dollars in a home that costs 1/3 to 1 |
| down? "The better the location, the more likely the | | | | 2 less than a comparable site built house! Why not |
| value is protected." | | | | take the money you save, and invest those funds! |
| Next is the condition of the home. If you have a | | | | Thus, you still have the benefit of living for less, and |
| conventional site built house that is run down, is it any | | | | have the benefit of earning money on the money |
| surprise that it is worth less than a site built house that | | | | saved in housing costs! Even if your house lost value, |
| has been well maintained, where the property has | | | | what you may earn on the money you save could |
| been landscaped, and where improvements are taking | | | | very well create an overall better lifestyle! |
| place? The same is true for manufactured homes as | | | | Take it a step further - because the manufactured |
| well! | | | | home has a lower purchase price, and lower taxes, if |
| If you don't maintain the manufactured home, over | | | | someone pays off or buys a home outright, then the |
| time, similar things will happen to it that would happen | | | | money saved in mortgage payments and on taxes vs. |
| to a site built house that isn't maintained. Now, if you | | | | a conventional house could be used for savings, |
| take a neglected manufactured home (or a site built | | | | investment, travel, charity - a host of positive |
| "fixer upper") and it is purchased "right" and then | | | | possibilities! These are just some of the advantages of |
| repaired and upgraded, what you will have is a home | | | | manufactured homes as an "investment." |
| that will often sell for more than what it originally sold | | | | In short, depreciation in manufactured homes are |
| for when it was new! Why? Because as building | | | | neither inevitable nor is it necessarily a tragedy if it |
| materials cost rise, the value of older housing | | | | does occur. What's needed are the facts and a good |
| (manufactured or site built) that is maintained or | | | | plan. With the right information, you can make a |
| brought up to standards will go up too! So if you buy a | | | | housing decision or investment that will yield a host of |
| pre-owned manufactured home, and do the same | | | | potential benefits, from lifestyle advantages, to financial |
| things that a site built home owner would do, you will | | | | ones, less stress and beyond. |