Q&A: Are Manufactored Homes Coming Back?

“I’m sick of renting this aparment and looking for a home, but don’t have a lot of money to spend. Is a manufactored home a good option for me? – Bridgette, Delaware

I’ve been getting various forms of this question a lot lately, in large part because Disbennett Real Estate lists and sells a lot of mobile homes and also because of my current double-wide listing in Shroyers.

But, I’m not alone. I had lunch with the queen of Marysville real estate this week and she said “I’ve been the mobile home queen this week!”

So that brings, us indirectly back to Bridgette’s question. Yes, you do have options, and for many central Ohioans right now manufactored homes appear to be a popular option.

And why not? Disbennett has three manufactored homes on the market for $17,500, $35,900, and $38,900. To purchase this amount of a home with land attached would cost you a lot more on the surface.

A liveable home in the city of Delaware begins at about $80,000 and goes rapidly to the $100,000 range. So it is easy to see why people are interested in buying a modular home. If you can save $70,000 on a similar home doesn’t it make sense? Maybe.

The first thing to remember whenever you look at a homes is that they usually appreciate in value. However, a manufactored home will rarely – if ever – appreciate in value. These homes are titled like a car and if you are looking at purchasing a manufactored home keep that in mind.

The second thing to keep in the back of your mind is that the majority of manufactored homes are currently on rented lots — and finding land to put your single-wide home is shrinking every day — which needs to be considered when looking at the decision. You might be able to pay cash for that $15,000 manufactored home – but you’ll be paying lot rent for the rest of the time you live there. Lot rents in Delaware County are in the mid-$300 a month with Worthington Arms closer to $400. So if you live in Worthington Arms for 15 years (and they don’t raise rent above the current $385) you’ll have paid that $70,000 you saved on the home in lot rent.

The third thing to keep in mind is that financing a manufactored home is different than buying a home. The options are smaller and you are going to pay more for a manufactored home than you would for a similar sized home on a permanent foundation. WACO Financial, based in Grove City, is one of the areas top manufactored home lendors — and you pay for their services. For the lendor there is also more risk – since the propery depreciates rather than appreciates – and hence you will pay a higher interest rate than a comparable home loan. You will also be required to have a downpayment (usualy 5-10 percent) and solid credit history.

So are you saying that we shouldn’t buy a rented manufactored home?

Not in a million years.

I have had clients purchase manfucatored homes that have lived in them for years. They love living in these homes. And that is wonderful, it is this different spice that makes the world interesting.

However, what I’m saying is that you need to be an educated consumer when you sit down to buy a manufactored home.

Look at it this way, most apartment complexes in the Delaware area are looking at $600-800 a month in rents for a 2-bedroom and 2-bathroom unit. That’s $7,200 per year at $600 a month, so by paying cash for your manufactored home and living in the Ravine ($325 a month with pet) would save you 54% a year over renting.

Buying a manufactored home today to simply “get out of an apartment” might work for you, however we need to evaluate your individual needs and desires. So give me a call today at (740) 990-9748 or e-mail me to set an appointment to talk about your options.

“Q&A” appears on Sadie’s Take on Delaware every Wednesday. To submit your question, contact Toby Boyce at toby@tobysellshomes.com.

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