Do you really get any equity from owning a mobile home?
Manufactured Homes October 4th, 2009I was always under the impression that a mobile home didn’t gain value with "age" the way a "regular" home could. I have been assuming that this was partly due to the fact that most mobile homes were located on rental lots rather than on land the owner had. Are these reasonable assumptions?
October 4th, 2009 at 8:32 pm
They get beat up and banged up.
And people don’t do the upkeep on them.
You can pressure wash the outside but you cant paint it or put new siding on it like you would a home.
They depreciate faster than Hummers.
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October 4th, 2009 at 8:32 pm
You are exactly right.
Any "equity" is in the value of the land, not the mobile home.
Mobile homes are registered with the DMV…just like a car.
October 4th, 2009 at 8:32 pm
I think the answer is "it depends". Look at these two references:
http://www.cashflowgenerator.com/CashflowConnection/MH-Appreciation.htm
http://ideas.repec.org/p/wpa/wuwpur/0305001.html
They put forward the sensible idea that if you buy it used in the first place, it will at least hold its value. That sounds reasonable. You can do that with lots of other chattel-type possessions, such as musical instruments. You might even be able to add value if you get one in structurally sound but rather ratty shape. Beyond that, if you own the land of course there will be some appreciation. You do (like with any rental) have to be careful about who lives there.
It’s an interesting question, which I’ve wondered about myself.
October 4th, 2009 at 8:32 pm
Actually a mobile home depreciates like a car.