Why do people think getting a mobile/manufactured home is not a good investment? Just FYI, we are a low-income family and it seems a right fit for us.

Asked by Rebecca Ruiz, 95123 Sat Feb 8, 2014

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Sat Feb 8, 2014
Hi Rebecca,

If a mobile/manufactured home seems to be the right fit for you, and you're able to qualify for the mortgage and the space rent, I would not rule it out.

The space rent can be expensive and mobile homes lose value, so be sure to take that into consideration in making your decision. ~ Best regards, Elva A. Wormley, Mortgage Consultant, (408) 615-8500, elva@elvawormley.com, C2 Financial Corporation, 2845 Moorpark Avenue, Suite 209
San Jose, CA 95128, NMLS #331981 / BRE #01274093
1 vote
Nina Daruwal…, Agent, Cupertino, CA
Sat Feb 8, 2014
Dear Rebecca,
In mobile home parks the Land underneath the home belongs to the Mobile Park owner. You are "renting the space" that the manufactured home sits on....usually $700-900 a month, its like rent, dead money, gone, no tax deductions or anything else..........You maintain everything about that home, roof to floor....also, the Landlord can raise rents when he wants to. The Manufactured home almost Never appreciates in value, it depreciates year after year.......not a good investment at all.....you are still also paying the mortgage on a Loan, if you need one to buy the home!
Call me, lets talk in detail.....sit down with a good mortgage broker and see where you stand, perhaps you could qualify for an FHA Loan with minimum of 3.5% down payment....pay your mortgage, get your tax deductions on the interest you pay and be able to own your own home!
Take care,
Nina Daruwalla
Web Reference:  http://www.ninadaruwalla.com
1 vote
This is the perfect answer
Flag Sun Feb 9, 2014
Michelle Moo…, Agent, San Jose, CA
Thu Apr 24, 2014
Hi Rebecca,

I have resided in a manufactured home community for over a year and it was a great choice for me. I had a new custom home built that is over 1,800 sqft. and my space rent is $920 and with utilities, water and trash, my total space is $1050. My home has enough equity that I could sell it today for $260K and higher and that is because of the location. Being 1 mile from Levi's Stadium and all the industry in Sunnyvale.

So I will say getting a manufactured home for me was a GREAT investment.
0 votes
Jordan Gouger, Agent, Austin, TX
Fri Feb 21, 2014
There are a number of reasons why this perception exists:

1) It can be difficult to lend on manufactured housing unless the house has been legally converted into real property. With mobile / manufactured housing they originate as what is legally known as "chattel", or personal property. Most lenders see this that the house depreciates while the land may or may not appreciate. This means more risk for a lender.

2) Some people feel that living near a community of manufactured housing "cheapens" property values. They feel this way to such a degree that most communities and subdivisions enact provisions that forbid a manufactured home from existing within their community. This is legally enforced through a community’s covenants, conditions, and restrictions (CC&Rs).

3) Most people do not understand that HUD requires stricter building standards for manufactured housing than for site built homes. HUD requires that manufactured housing be engineered to withstand the environmental pressures that a certain geographic area is subject to. This could include wind strength, climate, snow, etc. Site-built homes frequently do not have these requirements unless the city has strict building codes. Even then, those are easy to work around, if the “wheels of progress” are greased accordingly.
0 votes
Location is important. The mobile homes within a mobile home community with the "wheels off" are considered manufactured homes and can be financed by several local lenders. If it is a mobile home on a rural property, by itself - a different story.
Flag Fri Feb 21, 2014
Jim Olive, Agent, Key West, FL
Fri Feb 21, 2014
Some great answers here. All real estate is a very personal decision, what makes sense to one might make no sense for another, all for reasons specific to that person's situation. But you used the word "investment" here, which brings about specific considerations. The "land rent" that many have spoken of below is a MAJOR consideration. With a $1000 per month land rent, a $125,000 trailer (that's how much mobile homes cost in my market, adjust the numbers to fit your own market) costs the same in monthly payments as a $300,000 single family home. PLUS you can't get insurance and I'm aware of NO lenders who will give you a mortgage loan on them (at least in my market). All that considered....they typically are a LOUSY "investment". They MIGHT be a good choice for low-cost housing (ie: a cheaper place to live than renting a small apartment), but that's a very PROPERTY SPECIFIC evaluation. Trailers outside of a park, where you own the land beneath the trailer are a better deal and could be a good investment, but they are still subject to the insurance and mortgage limitation problems hightlighted above. Make sure you know ALL the DETAILS before you make a move. Best of luck...
0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Feb 21, 2014
Rebecca, the right answer depends on one's definition of 'GOOD INVESTMENT.' What is considered a 'GOOD INVESTMENT' by many is a holding that appreciates in value at a higher rate than costs and other similar holdings. For instance, although certificates of deposit pay interest to the owner, the rate is so low that they are bad investments. Good investments, really, really, really good investments are in the ownership of storage facilities and mobile home parks (not those who own the homes) -----------Consider that the least expensive automobile to own is a Mercedes. Why? Because they retain much of their value at the time of resale. The lifetime ownership costs of a Mercedes is extremely low when compared to USA or Japan or Korea made cars.. Value retention is not a attribute of mobile or manufactured homes. -------------- For you a GOOD INVESTMENT may be defined as affordable housing. Without a doubt you can move into a mobile/manufactured home for few dollars and this may be the best option for you at this time in your life. -------------Such homes can be found on waterfront locations and can command $500,000. Other situations results in the home not be able to be resold at any price and is GIVEN to the park owner in lieu of lot rent.......and it becomes an instant rental. -------------- For you, a good investment is defined as affordable housing. Please take the action necessary to get you into value retaining real estate.
0 votes
Karen Howard, Agent, Sunnyvale, CA
Wed Feb 12, 2014
I live in a mobile home community in Sunnyvale and it was a good investment for me. I put 25% down and pay about $1,000 in space rent. It is an excellent alternative to renting and is considerably less expensive than purchasing a traditional single family home. There are some mobile homes that offer a small yard area. There are down sides - tandem carports with two vehicles - you have to move them to be sure car # 1 can get out. You are limited to what you can do to the outside of the property. Appreciation isn't as stable as single family homes but it does happen. The market values change depending on the overall real estate market, and supply and demand. Think of it as compared to a 1 bedroom/1 bath condominium. When you buy a small condo, it might be just right for you - but if you put it on the market for sale, there is only a small percentage of the real estate that will consider it. Interest rates on mobile home financing are higher than traditional homes. But if you have the option of spending $700,000 on a traditional home or $250,000 on a mobile home with space rent - it is definitely worth considering.

Karen Howard, Intero Real Estate 408-863-3101 khoward@interorealestate.com
0 votes
Galia Taneva, Agent, Sunnyvale, CA
Sun Feb 9, 2014
If it seems a right choice for you - go for it! Just make sure that you are aware of all of the cost associated with owning a mobile/manufactured home. In Sunnyvale in most mobile home parks you pay over $1,000 a month for space rent. That is on top of the mortgage that you pay and morgages for mobile homes are also expensive. Unlike a house or a condo, manufactured homes lose value overtime. And in most cases you can't rent it if you decide that you don't want to live in it anymore.
I will be glad to help if you have any questions regarding buying a home.

Galia Taneva
0 votes
David Allen…, Agent, Sunnyvale, CA
Sat Feb 8, 2014
High space rent always goes up not down
0 votes
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