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8 Reasons Why You Should Consider Buying A Mobile Home

8 Reasons Why You Should Consider Buying A Mobile Home
Steve Gillman May 6, 2017
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My wife and I have owned eight homes, but none were as financially beneficial as the mobile home I bought years before we were married.

I paid $19,500 and sold it a dozen years later for $45,000.

I also collected more than $50,000 renting out rooms in my mobile while I lived in it.

There’s a lot of negativity about mobile homes

For example, financial guru Dave Ramsey says “From a financial standpoint, mathematically, you’re buying a car that you sleep in…”

He says it’s not so bad if you get the ones disguised as houses, but he adds, “If it looks like a trailer, smells like a trailer, it’s going to go down in value.”

That smells like bias to me, and one that for obvious reasons I don’t share.

Yes, there are often good reasons to buy a site-built house, but mobile homes have some advantages too.

So it’s time to dispel some biased beliefs and look at whether you might want to buy a mobile home.

1. It’s Usually Better Than Renting

I bought a mobile as my first home because I couldn’t afford a “regular” house, and it made more sense than renting.

My mortgage payment was $257 per month.

Add that to my property taxes, insurance, and maintenance, and I was spending less than what it would have cost to rent a decent apartment.

I bought a mobile on a small lot, which is partly why I did so well with it.

But what about buying one in a park on a rented lot? Can that make sense?

Ramsey makes his opinion clear:

“Before, when you were paying out X number of dollars in rent, that’s all you were losing. Now you’re paying out X number of dollars in rent and you’re losing money every day on the ownership of the thing, so you’ve done double dumb now.”

Now, he might have a point if your alternative is to buy an affordable house instead.

But if the alternative is renting, you have to crunch the numbers.

Let’s start with a simple example.

Suppose a decent apartment rents for $900 where you live, but you can buy a mobile home with a payment of $450 per month and lot rent of $350 per month.

Add $100 for maintenance and you have just about the same amount going out each month.

Ah, but your mobile is dropping in value.

So let’s suppose you paid $30,000 for it and sold it for $20,000 years later after paying off the loan.

You then have $20,000 more than if you had rented for all those years. Is that “double dumb?”

The catch is that you might move before you pay off your loan.

That can get tricky, especially if you owe $25,000 on a mobile worth $20,000. The solution? Buy an inexpensive used mobile home. The depreciation has mostly happened, so there is little to lose.

For example, an older mobile bought for $6,000 isn’t likely to lose value much because people have to live somewhere. But even if it drops in value a little, with the lower price you get a lower payment, so you might be saving more than $200 per month versus rent. That easily covers depreciation.

It’s even better if you happen to have cash. Pay cash and you might save as much as $500 per month versus renting an apartment. You could literally throw away the home two years later and be far better off, since you would have saved $12,000 (versus renting) in that time.

2. Mobiles on Land Appreciate Like Other Homes

Real estate does not always go up in value, as many people discovered a decade ago. But when houses are rising in value mobile homes with their own lots go up with them. There is plenty of evidence that mobile homes do appreciate in value.

Clearly that was my experience, but it’s also common sense. After all, if land values rise the value of a given lot is likely to rise, even if a “car you sleep in” is parked on it.

You should consider buying an older mobile home, because most depreciation on the structure itself will have passed. I figure that at the time I sold my home for $45,000 the mobile itself, if it was taken away, was worth less than $5,000. The total value was in the fact that it was a livable place on a piece of property. It still is.

3. Appreciation Isn’t the End of the Story

Another biased belief is that you’ll always gain more equity when you buy a big expensive home. The reasoning goes something like this: 20% appreciation on a $200,000 house is $40,000 while a 20% gain on a $50,000 mobile is just $10,000, so buy as much home as you can afford  That sounds reasonable, but it ignores an important factor:

Your ongoing costs are higher with a more expensive home, and that can offset any equity gain from appreciation.

A bigger home costs more to heat, cool, and maintain. A bigger mortgage means higher interest charges. A higher price also means higher property taxes and insurance rates. You could easily spend $750 more per month to buy the biggest home you can afford, versus something smaller and less expensive.

That $750 per month is $9,000 per year extra versus living in a cheaper mobile home. What if you saved and invested $9,000 per year? Ten years down the road you might be much further ahead than if you had bought an expensive house.

And yes, in my case I did save and bank a lot more money because my housing expenses were so low. This was especially true after I quickly paid off the mortgage loan.

Also, the whole “buy as much as you can afford” argument assumes real estate values will go up. What if they don’t? What if they drop? In that case…

4. A Mobile Home is Housing Crash Insurance

Proportionality of gains is true of losses as well. A 20% drop in value is $40,000 on a $200,000 home, but only $10,000 on a $50,000 mobile. And actually, because people always have to live somewhere, lower-priced homes generally fall less in value, even on a percentage basis. So if you suspect home prices are topping out, it may make sense to buy a mobile home just to keep your investment in real estate to a minimum.

For example, in 2005, when my wife and I lived in Tucson, Arizona, we looked at houses and it was clear we were in a real estate bubble. A small two-bedroom house cost at least $150,000. As friends jumped in and bought even more expensive houses, we bought an old mobile home on a rented lot for $9,000 cash.

Lot rent was $300, saving us about $200 per month versus our previous apartment. In 2006 we sold the mobile for $9,000  (exactly what we paid) and moved to Colorado, where we bought a small house for $65,000. Had we bought that $150,000 home in Tucson we would have lost at least $40,000 as prices plunged in the coming years.

Meanwhile, even though we bought at the top of the market in Colorado, we sold that $65,000 home for $72,500 a few years later (and then lost big on the $143,000 home that replaced it). I’m convinced by this (and by common sense) that low-priced homes can’t lose nearly as much value as higher-priced ones because people have to live somewhere. And mobile homes are some of the lowest-priced options.

5. Mobile Homes Can Be Financed

People have this mistaken idea that you can’t get financing for a mobile home. Through HUD programs banks will loan up to $69,678 on a mobile home on a rented lot, and up to $92,904 on mobile home attached to a lot. And according to the Consumer Financial Protection Bureau “More than 2,000 institutions reported originating one or more manufactured housing purchase loans in 2012” (more recent statistics are not available).

There are several other ways to borrow for a mobile home purchase. I borrowed the money for my first home from a local bank that held it’s own loans. I did it while I was unemployed (I said I was going back to work soon, which was true). Banks that hold their loans are more flexible.

You can also look for seller financing. I sold a mobile home (one I owned as a rental) for $22,000 with just $1,000 down. Because older mobiles are more difficult to finance traditionally, sellers are often willing to take payments in order to make the sale.

You can also borrow from family. Just be sure to put it in writing and record a mortgage.

6. Mobile Homes Can Be in Nice Neighborhoods

Yes, there are some ugly and rough neighborhoods with mobile homes, but the same is true for some areas with “regular” homes, so ignore the stereotypes. Just check out the neighborhood before buying.

I never locked the door on my first mobile home. There was a river at the end of thes street with hiking trails along it. The neighborhood was generally quiet.

7. Mobile Homes Can Be Safe

If you’re in an area with a lot of tornados a mobile home will probably never be as safe as a brick house. Plan accordingly; Although tornadoes were rare where I lived, I has a cement-block well pit I could climb into and close, just in case.

You’re safer buying mobiles made after 1976. That’s when new HUD standards went into effect. In fact, post-1976 mobile homes have lower rates of fires than site-built homes.

8. Mobile Homes Are Great First Homes

We may own a mobile home again at some point. My wife is not opposed to the idea because she would rather we spent our money having fun than supporting a big house. In any case, a mobile can make a great first home for the following reasons…

  • Lower price
  • Smaller mortgage loan
  • Lower monthly costs
  • Less maintenance
  • Less financial risk
  • Better than renting

Here’s another advantage: When you move to a house someday you can keep your mobile home and have rental income. That’s what my wife and I did when we traveled the country looking for a place to buy our first house together.

Clearly there are some good reasons to consider buying a mobile home.

Have you owned a mobile home? If so, tell us about your experience below, and happy frugaling!

Steve Gillman

Comments (27)

I like the idea to buy a mobile home as a starter for your family. My wife and I have gotten tired of living in our apartment and we are looking for ways to save some money until we can afford a house. I definitely think that we should buy a mobile home that is suitable for our family until we can develop a solid financial strategy.

I thought it was really cool how you mentioned that buying a mobile home can actually save you money versus renting an apartment. This would be helpful in my opinion since it could even help you build some equity. I wouldn’t mind getting a mobile home after reading this.

My boyfriend and I own a single wide on a rented lot. Altogether, our lot rent, utilities, phones, car insurances cost about $700/month. To us, it’s a wonderful thing!

I would not necessarily recommend purchasing a mobile home to anyone with minimal savings — especially if they see home equity is an investment. In the case of seniors, for example, if you’re willing to go from a property where you’ve built some equity into one where you will essentially be a tenant, with little or no equity at the end of your stay, then this is for you. In the case of first-time home buyers, buying a modestly priced mobile home may look great…until they go to sell and find out they’ve been paying for a loan worth more than the equity they thought they were building in the mobile home. If you buy a mobile home in a park you are buying a home which will continue to depreciate. As attractive as the low cost may be at the outset, in the long run, it could be a big mistake. On top of that, you are also paying up to $400 monthly in lease fees when in a park. This is similar to a condo but unlike a condo, the mobile home you are in will continue to depreciate. (I disagree that there is a point when it stops depreciating.) There is something called “scrap value” attached to an aging mobile home when it is assessed and it is pennies on the dollar. The value left when it’s time to sell will not even be close to what you spent when you purchased, whether a new mobile or a pre-owned one, no question. So you really have to approach it as though you are going to be a tenant.

I live is a mobile home park you call it scrap. I have seen people buy scrap 2,000 put 6,000.00 dollars into the scrap and turn the scrap into a mini palace. live in it for 5 years and sell it for 10,000. If you maintain them they only can go down in value so far.

It sure is nice that you pointed out how people can save as much as 500$ per month if they purchase a mobile home in cash. My son is looking to travel all around the country to battle creative burnout. He has told me that he plans to do it for a minimum of two years. I am all for that, so I’ll be sure to advise him to get a mobile home so that he can have a better time during his travels. He may have the funds for it, so I’ll be sure to purchase his home in cash so he can save a lot during his trip.

I appreciate what you said about ignoring stereotypes when looking to purchase a mobile home. I think double wide homes offer more space for an affordable price. If I were to contemplate purchasing a mobile home, I would look for listings that have double wide homes available.

Thank you for this article. I am currently renting a 3br townhouse that has had rent increases annually. I am divorced and need to reduce my housing expenses and am considering purchasing a mobile home to get back on my feet. I’m not looking at it as a real estate investment but the money I save each month will allow me to put money away.

I love living in a mobile home. We moved from Chicago to a NYC suburb with our young child and our park is so quiet and safe, we don’t even lock our doors! It’s also so much nicer than any apartment I’ve lived in. Our land rent is high because it’s a desirable area but since property taxes are also very high, I don’t mind the trade off. Plus we’d never be able to get a 3 bedroom, 2 bath apartment for what we are paying for our home. We’re already considering upgrading after we have this home paid off (5-6 years) and building our ‘dream’ mobile home!

Looking to retire and was thinking of buying a mobile home but to place in my own piece of land. I’m so tired of paying $400 of interest on my loan and only $200 towards my actual loan. I’m so over it.

Steve, this was an awesome (and in my case timely) article. We live in NJ and have owned some nice properties, but any semblance of profit has been eaten up by the unstable market, non-stop repairs, and above all, unbelievably high property taxes. We finally sold our last (and most beloved) home in 2017 and moved into a much smaller but quite nice apartment. Until very recently, we held all the stereotypes you mentioned but quickly realized that modular/mobile home ownership was the only way we could remain in NJ and maintain a decent lifestyle. We found a splendid such home in an Over-55 development but couldn’t get the best terms. We’re still trying though, and will keep you posted. Thanks again…

It lived in a cheap ($1000) 1970 mobile home for 2 years. Then I purchased a nicer one across the street for $6000 that I lived in for another 2 years., Both on rented land. I sold my first one for $2200 so I came out ahead.. then I sold my second one for $8500 and bought a house with 2 acres. .
..honestly I miss living in the mobile. No stress, cheaper and upkeep is easy. If you own a house just figure at bare minimum you will have to put 20- 25k into it every 10 years just for updates, repairs and maintenance. That’s another $200 a month on top of your mortgage.
A few more things you could mention is that upkeep and repairs are significantly less expensive on a mobile home compared to a house. And also, that if you find a nice small park like i was in… then it’s way cheaper. I was in a nice suburb of Pittsburgh pa. Houses in in the area range from 200k- 800k , rent in an apartment complex across the street from the park was $1500 a month for a studio apt. My lot rent was $400 with no mortgage payment. I do miss not having this financial burden.

how is the heat and air conditioning ? Are W/D allowed in then? Do they have cable hookups? Do they leak? Are outside water spigots with each lot? Can I have tile in entry and kitchen? Do appliances need to be replaced? HVAC units need Replacing? Approx cost of 2 =3 bdrm 2 bath mobiles? Price? Park fees? Maintenance fee, taxes?

That’s interesting that mobile homes also appreciate in value. I would want to make sure that I could have an investment in my money so that when I eventually sell it I could make some money and eventually work my way up to a normal house.

After owning two stick built homes,I retired and bought a double wide mobile home in a nice park and paid cash for it. My lot rent is only $380 per month and I’m saving thousands in upkeep! Manufactured homes are the way to go for young families and retire’s alike. The park I live in is very desirable and I could sell my home within a week for more than I paid for it,

GO FOR IT !!!

My husband and I are getting close to retirement and looking to do the same thing. Has insulation been a issue? Is heating and cooling a issue?

I like that you mentioned considering buying a mobile home is beneficial as depreciation will have passed. I have been considering buying a mobile home for a cheaper living condition. I would love to check out some mobile homes for sale and see what I can get.

I’m considering buying a “mobile home “on leased land. The home is about 40,000, it is in a great area with beautiful homes near by. I will look into the lease terms first .This is my question.
I’ve just received a settlement from an injury and my earning potential has decreased significantly because of the injury. I’m with family now but I want to be on my own. This money has to support me for a good length of time due to my situation.
Rent in my area is 1,500 amonth for a 2 bedroom( I have a son). I’m scared to death to make a choice. If I rent all my money will be gone in less than three years, paying rent and living expenses . If I buy, do I pay cash for this mobile home, so my monthly bills are low ? The hoa is $400. a month. Second choice is I’m trying to find a cheap house that needs some work in a decent area. Put some work into it with the hopes of selling it for a profit. God willing I’ve got a lot more life to live. I’m trying to be smart. Any advice would be greatly appreciated. Ps I’m not totally against buying a RV and traveling a bit. I’ve looked into relocating to another state. But honestly I’ve found financially , matching state to state. There is not much savings.

Hi Amanda,

To be honest, I’m not really sure on what to do here – it really depends on the decision that you want to make. Buying a mobile home is great if you want a house that’s cheap and you can have something of your own. A house might be more costly, but it’s definitely a more stable home and has more room for appreciation. It depends what you’re looking for. For relocating, a mobile home is also great.

I am in the same situation basically except waiting for my payment for 2 years worth of income replacement, my permanent injury payout and my payout for loss of employment due to the accident because I can never return to what I do for a living and have to go back to school. I found a 4 bedroom 1 bath (with jacuzzi) newly renovated mobile home on 6 lots of land for $30,000 (the land it’s on it worth alot as it’s a sought after town) that comes with all the furnishings, a 2 car garage, a rising lawnmower and a small camper trailer. I am currently working with the owner for either a full cash sale or partial downpayment and payments for the remaining. I think its important to look at how well its been maintained and finding out if any repairs would need done within a certain period of time (for example I asked about the next 5 years and was disclosed the furnace would need replacing. The coat of a new installed furnace is approx $2000 so that is used in part for the negotiations.
I feel putting the money in now and owning with my injuries will allow me to focus on reaching my maximum recovery and spending time with my sons, without the additional extra stress of paying $1200 a month rent. This will also allow me to make the remaining amount of my settlements last longer as it will be monthly expenses and food that I’ll have to worry about. Maintaining the mobile home is also alot cheaper then a stick built which is another big factor for me. Good luck in your search! And in your long term recovery.

Very interesting points re sticksnbricks vs mobile homes. Definitely interested in getting a MH at my age and continue saving money, thanks

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