The upscale park living with resort style amenities are very desirable to retirees. Activities and knowing your neighbors is an added bonus.
Now, they are a good option for the right circumstance. Like builders you want to pick the right manufacturer with good workmanship and warranties. I sell many of them in 55+ communities.
For the price, they can be a great way to go. check out my website at: http://www.cardinalarizonahomesales.com to see some examples of homes in parks in our area.
I am both a licensed REALTOR and a manufactured home Broker and sell both site built and manufactured. There are pros and cons to both.
As for the DMV tags, yes they do need to have motor vehicle tags â€“ at least in California. While they are being transported they must be licensed to be on public roads. Itâ€™s got nothing to do with what standards they are built to; it has to do with the fact that they are trailers while they are being moved. I canâ€™t speak for the rest of the country; there may be some states that allow unlicensed trailers on their roads.
Excellent information from John Arendsen except for the part that was taken out of context from my response. As is clear from my response, I was speaking of the difficulty of siting a manufactured home in the San Francisco Bay Area which includes the 94518 zip code of San Jose. Lots or acreage upon which you can set a manufactured home will be extremely difficult to find in urban areas. Sites in parks are also scarce. Manufactured home dealers have been known to buy up older homes in parks and haul them away to make space to locate a new home which can then be sold to a new owner.
As you get away from the urban areas, it is easier to find a location where you can put a factory built home, but stick-built homes are also less expensive as you get away from the urban area and job centers.
As mentioned space rent goes up, most of the time every year (~3%). If you are to buy a mobile home to save for a residential, sell it before the space rent is considered high for the area. All this is happening as the mobile home depreciates and ages. And when they hit a certain age, financing is almost impossible.
Lets say you are ready to sell your mobile with ideal space rent and for a good price. The buyers have to be approved by the park... NOT as easy as one may think.
"they depreciate like cars". Au Contraire. Today's state-of-the-art Manufactured Homes are built to the exact same specifications as are site built homes. In fact they are even better built in most cases.
Now if you're talking PRE HUD "mobile homes", built before June 15, 1976, that's a whole different story. They were built like travel trailers and do in fact depreciate. Additionally, they can be very unhealthy as many of them were built with caustic and carcinogenic chemicals i.e. formaldehyde and asbestos.
"you must rent your space". Again, a misnomer. There are an abundance of Manufactured Home Communities that are either "Planned Unit Developments" (PUDS) whereby they where originally planned and developed as "RESIDENT OWNED COMMUNITIES" where you own your own land and share in the common areas in the same manner you would any site built tract or community.
Or you could buy into a "Condo Conversion" which is a formerly rent/lease park/community that has been converted into a "Condo Community". Here you own your airspace in much the same way you would own a "site built condo" and share in the common areas. But you do own your space.
In either of the above scenarios your depreciation generally stops useless your home is a "PRE HUD" or just in very poor condition in which case it would then be worth it to remove it and purchase a new Manufactrued Home which again is built as good or better than most site built homes.
"expensive to finance". If the home is indeed in a rent/lease community financing will be higher. However, there are many "chattel" lenders who are quite willing to lend on them. But if the home is in a "resident owned community" then you should be able to find the same type of conventional, FHA, VA lenders that any site built borrower uses. Not all mortgages lenders are in the game but you shouldn't have any problems finding one providing the home is not "PRE HUD"
"space rent is often very high". I can't find fault with this. This is one area of the MH industry that indeed gives it a black eye. All too often landlord/park owners abuse their tenants by rapidly raising rents. There's an age old adage in the MH Industry about this. "The higher the rent the lower the value of the home".
In this case you need to find out if the park/community you are looking at is in a rent control zone or if you can obtain a long term lease/rental agreement for at least 5 years if not 30, 50 or even 100 years with escalation clause adjusted to the Consumer Price Index (CPI). If not I'd definitely rule that out. These park owners are the leading edge of the next urban blight and will no doubt end up being a new generation of slum lords.
"they are not as well built as "stick built:" single family homes". Once again nothing could be farther from the truth. Anyone who paints this industry with such a broad brush needs to take a tour through a MH factory which I would be happy to arrange. If at the end of the tour you are not convinced that a MH is built every bit as good if not better than most site built homes I'll buy you a stake dinner at your favorite restaurant.
That stated I must reiterate that if the homes were built before June 15, 1976 they were built like travel trailers. Additionally, many homes built after that through about the mid to late 80's weren't built as good as homes that were built from about the early 90's to date.
That's why it's so important to always get a thorough inspection from an experienced MH inspector and not just any home inspector as they tend not to understand all the nuances in a MH. Not the structural aspects but moreover the set-up and installation of the home and the integrity of the foundation and support system.
"Manufactured homes are mostly restricted to sites within â€œmobile home parksâ€. Once again this is far from the truth. The law allows MH's to be located just about anywhere you can build a site built home. the only restrictions would be in planned communities with CC&R's requiring specific building and cosmetic criteria.
In the rural community I live in you will see Factory Built Homes interspersed with site built homes throughout the community. In many if not most cases you couldn't tell the difference between the two. Now granted there are MH's in these communities that still look very much like MH's and this is one of my pet peeves.
With today's factory options i.e. stucco siding, tile roofs, curvilinear architectural detail and offsets there's really no reason to ever order a MH that just looks like another MH. Factories today are very willing to sit down with a client and help them design and build a home that will blend in and compliment the community in which they want to live.
* There is a stigma associated that some people consider them to be "low class" BTW I live in one and I love where I live. I have a garage and fenced yard. And some people will not buy - period.
* They are made of lower quality material. This is true for older models. They were built so that they could be transported easily, this being keeping it's weight lower. The reality is that I don't know of anyone who has moved their home because of the cost involved and finding a suitable location to reset it on.
* Nothing is standard. Basically true. See above
* They depreciate. Basically true. As in anything supply, demand and the market affect their value, along with the space rent and the age of the home.
* Financing is difficult. Some older models can not be financed. The amount down required is greater, the interest rates are higher and term of loans shorter.
* Most in California are in leased lots which mean the buyer has to accept the terms and conditions of the park and the buyer also has to be approved by the park.
* Rent in parks increase. Some cities to have rent control which will limit the increase.
* Rarely can you rent out your home if you need to - because the park may not allow sub-leases.
Now for some of the benefits.
*The cost are less than a condo. If you were to purchase a condo you would have HOA fees and Property Taxes along with your mortgage. The space rent and yearly property tax and/or registration fee on a mobile home make your monthly "nut" much more affordable.
* You buy into a community and many have amenities such as pools, spas and some have tennis courts.
* With a condo you have shared walls and a mobile home you do not have a wall shared with a neighbor.
So it is personal and the buyer will need to weigh their housing cost and goals to see if mobile home ownership fits for them.
Have an amazing day!
Since, the question is about buying a Mobile home in the bay area especially 95148, the point is that it comes down to a Means test. I checked and came across 16 mobile homes ranging from $59,000 to $129,000. A mobile home is a depreciating asset, hence a mobile home on Home owner land is preferred. Hence, if this is what you can afford then this is what you go for.
If you are looking to make it a rental property then you have to look at your net cost and outlays
And your rental income.
Like John mentioned it is key to buy at the right location.
About 5 years ago we have had buyers paying $450k for mobile homes in Santa Clara county
Depending on size, age, amenities and location. Like a lot of traditional homes they have come way down in price.
Families prefer, a condo or a home, there are a few Condos available monthly for $250k, on last count I checked there were 173 units that are pending and sold as of April 1. Also the rate of appreciation and return on investment is quite different for Mobile homes compared to a Condo.
There is no harm buying a Mobile Home, as you have a home, a shelter, something you can write off
On your taxes at the end of the year, and if this is what you can afford then go for it.
Did you get an eye full on the passion we have for our business? Because real estate is local, I ran some quick numbers from our MLS on mobile homes in the zip code 95148 going back to 2007. Due to relying on accuracy of MLS reporting and input error I don't guarantee the results. These are all in lease space parks. Many are sold off of market and those numbers will not be reflected here.
2007 0 sold
2008 0 sold
2009 3 sold average of the three $85,000
2010 11 sold average of those 11 $80,000
2011 7 sold average of those 7 $80,000
2012 2 to date average of the 2 $67,000
Now because each home is unique these numbers are not going to reflect age, condition, rent, etc. Which affect value of each home on an individual basis.
We purchased our 1980 mobile home in 2008 in a multiple offer situation. Since then we have seen at least a $20,000 to $30,000 drop in prices. Ouch! Our real estate market is changing so I expect to see some changes in these as well. I hope in a upward movement.
We didn't buy with appreciation being our motivator. We didn't want shared walls, we wanted to keep our housing cost low, and we wanted a yard and garage. We got all at a price we could afford. Plus a beautiful view of our local hillside. We also got leaking windows, damaged walls, uneven floors, and a host of other issues, which we have since remedied. However running to Home Depot wasn't always an easy fix and the contractors were another story.
I strongly believe, as John, that buyers need to be informed. I speak from my own experience here in Santa Clara County. When I recommend a mobile home to buyers the 'majority' of them turn their noses up, even after I have explain that I own and live in one, and showed them what they can get.
So back to my original answer, SOME people do not want to buy a mobile homes and SOME people do.
Are you a buyer or seller?
First the mobile home that will continue to be mobile â€“ in other words a unit that will be in a mobile home community on a rented space. This is a personal property purchase and these have not fared too well. They depreciate like automobiles, just not as fast. They are also difficult to finance, have higher down payment requirements, and typically have higher interest rates. Because of the difficulty in moving these units, the property owner (the mobile home park) has the upper hand and have been known to take advantage of this situation.
Then there is the â€œmanufactured homeâ€ that will be permanently attached to a piece of land. The 1st question: is the home a manufactured home, or not. If the home is built in a factory, and is transported to the land on wheels attached to the unit, itâ€™s a manufactured home. It has motor vehicle tags, and is built to a national (HUD) standard. If the home (often build night next to the manufactured home) is built in factory, but needs to be transported on the back of a flat-bed truck (often in pieces) then it is called a modular home. These homes do not have any motor vehicle tags, and must adhere to the local building standards where the unit will be permanently situated. They are similar to â€œkit homesâ€ and â€œlog homes.â€ As for how these homes do is really a matter of the market where the units will be located. In some areas the majority of the homes are either manufactured or modular, and are widely accepted. However if you put the same home in an urban area it may be a different story.
The other issue is financing. Financing manufactured homes (the ones that arrived on wheels) is not as easy for some reason. Our company does finance them, but most do not. Modular homes are much easier to finance so long as there are comparable properties in the area so that a value is easily established. (This is why these properties are difficult to finance in urban areas; it is rare to be able to find enough comparable sales.)
If you have further questions feel free to contact me through my profile.
In the last 6 months, there were 9 pre-HUD mobile homes (built before June 15, 1976) on the MLS, in San Jose, for more than $60,000. The highest sale was for $137,500. This home sold originally for $28,900. It sold again in 2008 for $102,000. I fail to see how this lost value.
Now this may not be the average, but from what have seen in the last few years, they all will eventually rise in value just like regular real estate, as long as they are properly maintained, and the park they are located in is properly managed by the park owners.
A home owner in a mobile home park might not make several hundred thousand dollars in equity on their home, but, they will not lose several hundred thousand dollars either. This should not be considered an investment. Consider it a roof over your head.. a place to call your own... with minimal capital out of your pocket to purchase.
I hear stories from the seasoned agents talking about the 1980s. They all thought they were going to go out of business because space rents breached the $300 level. Well... the wheels keep on turnin'.
Manufactured homes and mobile homes have been the primary part of my business in the last few years. I am a Realtor and I also work for a dealer - the best of both worlds. Also, I live in a modular home with a garage, on private land near Oakridge mall in San Jose. I didn't even know it was a modular home when I bought it 13 years ago. My recent appraisal came in Waaayyyy above what I paid for the home in 1995.
Realtor/Manufactured Home Specialist
(408) 472-5582 Cell
One down side is that often they are sold in a condo fashion. Where as, the buyer buys the home but must continue to pay rent on the land.
You may want to take some time to check out this link: http://www.dfbls.az.gov/omh.aspx
Manufactured homes are definitely not registered with the DMV who issues and regulate licensing for Automobiles, Trucks & Recreation Vehicles. Manufactured Homes on the other hand are regulated by the Office of Manufactured Housing (OMH) which is under the Department of Fire, Building and Life Safety in Arizona and the California Department of Housing and Community Development (HCD) in California.
You're very broad and general suggestion that a Factory Built Home makes a poor investment is a very short sighted remark to make about such a huge and very complex and multi faceted subject. I can show you site built homes that lose as much if not more value than MH's in many areas.
It's really all about the situation relative to a particular MH just like any RE investment. If you're purchasing a MH in a rent/lease park/community and the community is not in the path of progress and there is runaway rental increases that are not fairly tied to the Consumer Price Index (CPI) MH's can and will lose value. "The higher the rent the lower the value" as is an age old adage in the MH industry overall.
There are a lot of other nuances you could benefit from just by taking the time to read some of the comments by me and others on this thread. But let's not continue to paint an entire industry with such a broad brush.
Above all let's not discourage, insult, embarrass or intimidate buyers who may want to purchase a MH for any number of reasons i.e. it's truly all they can afford, they are seniors wishing to sell their RE and don't wish to own RE any longer, they're a young family who wants a private yard and carport and possibly even a shed to use as a work/hobby shop or for storage.
Lastly, Let folks make their own choices about why and what they want to buy and where they want to live. Our job as RE Professionals is to help guide them through the process and keep them out of trouble and try to find them what they want to buy not what you want to sell or think they want to buy. Have a nice day.
BTW, I'm a licensed Manufactured Home Installer in the State of Arizona. Albeit I put my license on hold there I can reinstate it anytime.
In Silicon Valley, land is at a premium. There are few mobile home parks, even fewer well-run ones. Space rents can be as high as apartment rents (I've seen up to $1100 in San Jose).
The better parks operate like a co-op in that the buyer must be approved by park management (including a credit check), and in some cases, a vote. Mobile homes themselves deteriorate and depreciate. Although newer ones can be much better built, few are manufactured to the same quality as stick-built homes.
Loans are at higher rates, even for newer mobile homes and if the mobile home is over 25 years old, the only option may be owner financing.
During the boom of real estate buyer's mind set went from purchasing a home for self enjoyment and fixing their monthly cost to investment. When our market went crazy many people who purchased for investment lost out.
Today, buyers who are not investors should refocus on the reason for purchasing a home. If they want to keep their cost low, have more space, and have a home without shared walls they should consider a manufactured home as one of their options.
The reason we have the perception that the â€œhomeâ€ is increasing in value is because the land tends to increase in value faster than the improvements lose value. That and because the process of building a home (permits, impact fees, etc.) all add to the value of a completed home.
I think the standard out there for a site built home is that land comes with it. I understand this method. If I get a trailer, I have to look for a trailer park, deal with moving one, and thats more that I have to learn for an ideal that won't make me money.
One of the top producing agents in our office has an "eye" for mobile homes. That is her niche market. As I see it, as long as a mobile home is in an attractive moble home community, there should be a market for mobile homes. In fact, there is a mobile home park for senior citizens in a suburb of Cleveland, OH that is very attractive. It looks like many of the mobile homes in Florida senior citizen communities.
Beauty is in the eye of the beholder.......
Necessity is often driven by need......