As the recession lingers, many people have looked into buying a mobile home. Why is that? Mobile homes, in short, are low-cost housing. For what can be the price of renting an apartment, you can live in a house. There are pros and cons to buying a mobile home, so find out before you buy.
There are really two types of mobile homes: homes set up in a park, and those on land that you purchase with the home. Either way, mobile homes have one problem: they can depreciate just like automobiles. In fact, in some states, mobile homes are considered a vehicle and come with a title (or two titles, if the home is a double-wide). However, homes on land do not necessarily depreciate as much as those in a park.
If you buy in a park, here are the pros and cons.
You will pay lot rent and your home will probably depreciate. When you go to sell it, you will probably lose money. Lot rent can increase like apartment rent, also.
However, if you want cheap housing for a couple of years while you save up for a down payment for another home, for example, and your alternative is renting, you can sell your mobile and walk away with at least some of your investment. If you rent an apartment or house for that time period, you walk away with nothing.
Lot rent is usually much cheaper than apartment rent. Even if you are carrying a loan on your mobile, your total housing costs could equal rent for a two bedroom apartment in the same area. And you get to live in a house with a small yard or outdoor space.
While we’re talking about loans on mobile homes in parks, be aware that you may pay a much higher interest rate for this type of loan than for a mobile located on its own land. Remember you are buying a used vehicle, not a house. You may also have to shop around for a loan. Credit unions are a good place to inquire about mobile home loans. Ask the dealer who is selling the mobile home for advice and assistance.
Parks can have all the amenities of more expensive apartments, such as clubhouses, exercise equipment and swimming pools. The park is responsible for maintaining the grounds, while you are responsible for maintaining your lot only.
Many parks, especially in southern states, are senior communities with a 55+ age limit. This can be great if you are retired, but many of them also are required to take a percentage of people who are 40+, as long as they don’t have children living with them. Other parks are all-ages, so find out the rules for your park before making an offer.
Now, buying a mobile home already on a lot, or buying a lot and putting a mobile home on it, means that your land may appreciate. Certainly you stand a better chance of regaining your investment than when you purchase a mobile set up in a park. However, there are only a few major banks nationwide willing to loan money on land plus a mobile home. Check out your options if you need to take out a mortgage.
In the end, a mobile home can equal affordable housing. Whether you are a first time home buyer, retiring, or just trying to recover from the recession, mobile home living can make sense for you.