The Advantages and Disadvantages of Manufactured Homes
Manufactured homes, also known as factory-built homes, pre-cut homes, factory-made homes, and mobile homes are residences that are built in a factory and then transported to sites of use. Nearly every other component of the home is completed and only some of the finishing touches added when they arrive on site.
The Advantages
Cost: Manufactured and modular homes typically cost less than site-built homes. They are the most affordable form of home ownership for low and moderate income people and families.
Quality control: Because 70 to 90 percent of the home is completed in a factory, a manufactured home is built under controlled conditions and strict quality control standards.
Speed of construction: Factory-built homes can be installed onsite only in 1-2 days, as opposed to 3-6 months for a site-built home.
Indoor maintenance: There is less space to maintain and clean.
Exterior maintenance: Exteriors are made of vinyl or aluminum, which require lower maintenance than wood or brick.
Property maintenance: In some parks, landscaping and snow removal are taken care of (and covered by the monthly fee.)
Amenities: Some have swimming pools, tennis courts, etc.
Taxes: Taxes are lower because residents pay a property sales tax that is based on the value of the home, not on the land on which it sits.
The Disadvantages
Depreciation: The homes’ value tends to depreciate more quickly than site-built homes. A mobile home is not considered real estate unless it is securely attached to a permanent foundation. Residents receive a title to the home similar to the one for a car; if residents purchase the property the home is located on, this will be recorded as a deed on the land.
Refinancing: Manufactured homes can be difficult to refinance when certain segments are not placed on a permanent foundation.
Lack of important financial benefits: Because residents own the house but rent the land underneath it, their home’s value never grows. And because the land could be used for a different purpose, they can’t get home equity loans for renovations or repairs.
Ownership: Residents do not own the land under the park. Residents are vulnerable to excessive rent increases, poor maintenance, and poor infrastructure. They may lose their homes if the park closes.
The owner can increase fees, sell the land, etc. without residents having any say.
Safety: They are more easily damaged by severe weather than built homes. Lack of a permanent foundation makes them more susceptible to high winds. There is no basement to take cover in.
Zoning: HUD rules, which are supposed to supersede state and local laws, make manufactured homes legal anywhere a built home is allowed. However, in many communities, zoning limits where mobile homes may be located and many communities ban them completely. Developers and citizens usually give in because the savings that could be realized by purchasing a mobile home would be lost in the legal battle against local zoning.
Noise: Due to the need to transport mobile homes, the construction materials are less dense to keep the weight down. These materials do no t block sound as well as heavier materials.
Space: Your neighbors will be close. Most lots allow only 10 or 15 feet between lots to squeeze more income from the land.