As the price of buying a home continues to skyrocket in today’s housing market, many would-be homebuyers find themselves lacking in the financial department. Dreams of homeownership, therefore, seem out of reach.
What many people tend to overlook when looking for a home is the mobile home. Mobile homes, while having a bad reputation for depreciation and nondurability, can make good investments, if done right. Several factors come into play that determines if a mobile home purchase will be a good investment or not. These factors include:
- Whether you buy new or used
- Whether you need to borrow money to buy and what financing options are available to you
- How much lot rent costs
- What your long-term financial goals are
How Mobile Home Value Changes Over Time
When buying a traditional house, you expect the property will appreciate over time. This isn’t always the case when you buy a mobile home. If you place your mobile home in a mobile home park, it’s very likely its value will depreciate with time. The problem with depreciation is that your mobile home could end up being worth less than what you still owe on the mortgage.
On the other hand, if you place your mobile home on a separate piece of land, its value will probably appreciate with time, as land usually does.
Despite the Downside, Mobile Homes Still Make Good Investments
Although location plays a big role in the value of a mobile home, there are still benefits to owning a mobile home. First, they are affordable. Even if you have to pay lot rent in a mobile home park, the monthly payment is likely to be well below that of a traditional home and even less than rent in some cases.
Second, mobile homes are extremely durable these days. Since 1976, the U.S. Department of Housing and Urban Development has enforced building codes on mobile home construction, making them more durable and longer-lasting than they once were. This means you get affordable housing that lasts a long time.
And lastly, despite its tendency to depreciate, owning a mobile home is an asset. It’s possible that when you go to sell, you will end up with a little extra cash to boot.
If it’s your goal to own a home, but money is a consideration, purchasing a mobile home might be a smart investment. The key to deciding if this is the right investment for you is to review your financial goals and weigh the pros and cons to figure out just how owning a mobile home will benefit you and help you get to where you want to be.