Can someone tell me the disadvantage of buying a mobile home in the bay area?

Asked by Yesenia, California Thu Jan 24, 2013

We are new to this mobile home search. Are the loans different from single homes (FHA, conventional etc)? Interest rates? Any info is appreciated a lot!

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Cindy Davis, Agent, San Diego, CA
Thu Jan 24, 2013
The loans are different as Vicki shared. To me, the main disadvantage is that a mobile home depreciates over time If you save enough money to get into a condo, that property should increase over time.

On the other hand, I know the housing costs in the Bay area are quite excessive. So, if you feel a mobile home offers you a better quality lifestyle than renting, great.

One other item of note...when you have a mobile home, you have to park it somewhere...and thus rent the land you sit on. Even in San Diego, I've seen some high land rental fees, like $700-800.

My suggestion is to do all your homework..really check out the costs involved in both purchaseing and maintaining a mobile home.

Best of luck!
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Elena Talis, Broker, Palo Alto, CA
Thu Jan 24, 2013
The main disadvantage is that you are buying only the home, no land like if you are buying a conventional home. That is why it falls in value and you have to pay rent for the site where it is standing, Other than that a mobile home may be the least expensive way to live in the Bay Area.
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John Arendsen, Agent, Leucadia, CA
Thu Jan 24, 2013
First of all if the home was built before June 15, 1976 it is a PRE HUD "MOBILE HOME". After that date it became a HUD "MANUFACTURED HOME". However, the homes that were built from the early to mid 80's were built more like site built homes with a lot more quality.

If the park/community is a rent/lease community and you're not in a rent control area you are subject to rental increases albeit your landlord is legally obliged to give you a 90 day advance notice. I'd check with the manager before doing anything as you will have to fill out an application and be approved before you can move in.

At that time you can ask them how they escalate their rent. Is it adjusted to the Consumer Price Index (CPI), is it an annual flat percentage, do they offer a long term lease i.e. 5, 10, 15 years with a controlled escalation clause?

If the home is in a resident owned community you can where you own the lot that's a whole new story. You won't lose to depreciation unless the home was a PRE HUD "MOBILE HOME" or in very poor condition.

The only problem will be trying to get adequate comps as they will only be able to be derived from other HUD MHs within a reasonable proximity to your home. Usually a few miles max. I don't know the San Francisco market but I would recommend you contact a local Manufactured Home Dealer or RE professional who if familiar with MHs.
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Vicki Moore, Agent, Roseville, CA
Thu Jan 24, 2013
Hi Yesenia - The loans are different. There are specific lending institutions that loan on them.

Mobile homes depreciate like a car as opposed to a traditional property that goes up in value. Many of the parks charge very high rental rates. They also have an application in which you have to apply.

The upside is that you may be paying less than renting and you have a chance to pay it off. Although the park may raise its rates, your loan payments are likely to stay the same.

I hope that info is helpful.

Best wishes
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thank you ladies. i've called around and the average lot rent is $950 for a descent safe area in the bay are (sunnyvale). that is a bit too high as they increase the lot rent about 3% a yr. wowza.
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