what are the disadvantages and advantages of owning a mobile home compared to owning a condo or single homes?

Asked by Bombing, Sunnyvale, CA Tue Aug 4, 2009

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Mobile_owner, , Mountain View, CA
Sun Aug 30, 2009

As a mobile home owner for the last 7 years, I may have a different perspective. My housing costs about 1/5 as much as friends who bought single family homes have paid. Thus, my mobile home is not an investment, it is a place to live. I can and do invest my enormous monthly savings in other assets - just not Silicon Valley real estate, which I think remains ridiculously overpriced.

In purchasing a mobile home, it is critical to learn about the park. Good parks have long-term, stable management, are owner-occupied, have responsible residents, and have a long track record of keeping space rents low. If you find a home in a park like this, I think it may be a great bargain for you (as it has been for me). If you do not, then DO NOT buy a mobile home. To investigate a park, you should talk with a realtor who specializes in mobile home sales, but you should also do your own, thorough research - walk around talking with residents, drive through the park on a Friday night to see if it is quiet and peaceful, etc.

I hope this helps.
7 votes
Marcy Moyer, Agent, Palo Alto, CA
Tue Aug 4, 2009
When you buy a mobile home you buy the home but not the land. The home will depreciate so you will never sell the home for more than what you purchased it for. You rent the land and never own it. (excet for a few parks were you can buy the home)

If you buy a condo or home you buy the land and the structure. In the case of the condo yu own the land in common with the other owners, but you still own the land, you do not rent it. These purchases have the potential of appreciating, and generally do over time.

Mobile homes are less expensive, larger, and generally newer than condos and single family homes in the lower end of the market.

Web Reference:  http://www.marcymoyer.com
4 votes
Terri Vellios, Agent, Campbell, CA
Sat Oct 17, 2009
I've sold mobile homes and toured countless communities, and I own one, so I can speak with some knowledge.

You will find variances due to the following factors,
1) Rent Control. The rent increase is limited by the city if the park is in rent control.
2) All age or senior. You will find the 55+ and 65+ parks higher in rent
3) Amenities. Some parks have higher end amenities, common pools, spas, parks, recreation rooms, etc. Also, are any utilities included in the space rent? This will increase your rent (think of it like a Home owners association fee).

If you are looking at a mobile home consider that there are three contingencies and areas of focus,
1) Financing: The age of the mobile will determine the cost of financing or not financing. 1976 and younger get better rates, under 1970 you may have to pay cash or very high rates. Most loas are 20-25 years (very few 30 year loans). Interest rates in the 7% up to 10%. Up front points are higher too.
2) Rental Agreement. You will have to qualify for the rent and the mortgage, typically your mortgage and rent combined needs to be in the range of 1/3 of your income. So if you make $3000 a month your rent and mortage can not be greater than $1,000 a month.
3). Qualifications. You will have to qualify for the community.

Restrictions; If you have children, young adults and pets you will need to verify that the community will allow this. Also, some communities you can not rent your mobile home, or have guest stay for extended periods. what is the parking like, and do they have options for RV storage?

Is the community under any possible changes, such as selling the park, changing from or to rent control? Will the rent change, how is it managed?

These are not all bad situations. Let's look at today's economy and why one may buy a mobile home vs a condo.

Average 2 bedroom 2 bath condo purchase price $300,000, at 5.25% interest per month based on 3.5% 30 year FHA loan (if the condo qualifies)
Your monthly Mortgage plus Mortgage Insurance $1,972, then add $612 per month for property tax, homeowners fees, and add in $ for your casualty insurance your total monthly housing total would be about $2,625

Average a 3 bedroom 2 bath Mobile at $150,000, at 7.5% interest, 25% down over 25 year loan,
Your monthly mortgage would be $887 and estimate rent of $700, add in casualty insurance and your estimated monthly housing total would be about $1,636.

By the way , there are four communities I love to share with people,
one is in Scotts Valley, you own the land but owners must be 55 and youngest 45, many have garages attached.
Another is in San Jose (San Jose has rent control), all age park, very nice community, rents are in the $500 and $600's some have yards and attached garages. The third is also in San Jose, must be 55 to own, youngest resident can be 18, rents around $850, many have yards, privacy and attached garages.
The final is in San Jose, rents are low, all age park, can have larger dogs, and you can rent out your mobile.

Hope this gives you some insight.
Web Reference:  http://www.terrivellios.com
2 votes
the first scenario does NOT include a down payment, with the same down payment as scenario two, the total will be much lower. there are several great calculators online to get an accurate depiction of what your payment would be in your area. property tax in my area is only about $360 for a home in the mid 300s and with the same amount down as scenario two, the total payment would only be $100 more to live in scenario one.
Flag Tue Dec 6, 2016
Maria Morton, Agent, Kansas City, MO
Tue Aug 4, 2009
You may or may not own the land that the mobile home sits on. Mobile homes have a life span of 20 years. After that age, it is difficult, if not impossible, to get a mortgage on one. In most states, mobile homes have a tendency to lose value over time.
Web Reference:  http://www.MariaTMorton.com
1 vote
David Allen…, Agent, Sunnyvale, CA
Tue Aug 4, 2009
Mobile homes have space rents from 500-$900 per month depending on the mobile home park.
Condo has Home Owners Association fees from 200-500 per month depending on the complex.
Single family home's have none of this. You don't have restrictions as you do in mobile homes and condo's.
For the money you spend on space rent of HOA fees you could buy a home worth 50-150k more in value for the same payments.

Please feel free to contact me with additional questions with out any obligation to use my services.
email; ultimaterequest@sbcglobal.net website; http://www.ServingSantaClaraCounty.com
1 vote
Annachenalle…, Home Buyer, Sunnyvale, CA
Fri Jan 8, 2016
well its small af. Are u broke? Buy yr own house/condo. Or get an apartment? Maybe live with a friend. I hope this helped u guys. But in all seriousness. I wouldn't live in a mf trailer.
0 votes
With your attitude, you would not likely be park approved anyway, sour grapes???
Flag Sat Nov 5, 2016
Monica Goyal…, , Cupertino, CA
Fri Aug 21, 2009
Hello Homebuyer,

You have received lots of good advice below, also keep in mind that purchasing a home is a long term investment. If you purchase in the current market conditions, where the home prices are substantially low, you have a potential of nice return on your investment. You might want to consult a CPA or Tax professional to weigh in the tax benefits.

Best of luck
Monica Goyal
DRE # 01781926
Ph: 408-476-0675
0 votes
Wilma L, , San Mateo County, CA
Tue Aug 4, 2009
Also, some of the fixtures in a mobile home are not standard size when it comes time to replace them.
Web Reference:  http://www.whillamina.com
0 votes
Aileen La Bo…, Agent, Los Altos, CA
Tue Aug 4, 2009
Hi Bombing,
The simple and clear first disadvantage is that you never own the land that the home sits on - it's always rented space, so that leaves you at the mercy of park owners for rent etc.
The second disadvantage is that, unlike condos or single homes, your mobile home will depreciate in value much like a car, rather than increase in value like real estate. Much of this effect is caused by the fact that there's no ownership of the space.
When you're looking at housing that's so inexpensive that it's almost too good to be true, there's a reason for that...it probably *is* too good to be true.
Best wishes,
0 votes
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