Why do manufactured homes depreciate? Is this normal?
Manufactured Homes December 17th, 2009OMG, the latest nightmare in my quest for home ownership is my insurance company. They said that because my house is manufactured, it decreases in value over the years, and they are only willing to insure in for the current depreciated value, which is only about 1/4 the actual sale price. Is this normal? If so, why? Wouldn’t it increase in value like a "real" house?
December 17th, 2009 at 1:23 am
Welcome to the world of owning a ‘manufactured home’. Your insurer is correct. Those structures don’t appreciate like a conventionally constructed house does. They much more closely follow valuations similar to mobile homes, which depreciate annually. Your insurer is correct in its approach.
You might try to find a different insurer who will offer ‘replacement value coverage’, but that will cost you considerably more than the coverage you now have.
December 17th, 2009 at 1:23 am
Nope. Cars depreciate. A mobile home is basically a big car. They only last so long.
December 17th, 2009 at 1:23 am
Yeah they depreciate and fast…You are really getting into the please abuse me syndrome….They want to make you squirm…Like getting a paddling.
December 17th, 2009 at 1:23 am
Manufactured homes depreciate because they are built to a whole different code then homes are. They are not on permanent foundations (usually). Every time there is a really hard wind you can figure your mobile has suffered some sort of damage even of the most minute. Mobile homes also depreciate because they are made to be mobile and are moveable and at one point in time or another has been moved. Once a home is take apart, transported and put back together again, it has depreciated.
December 17th, 2009 at 1:23 am
It’s unfortunate to learn at a later date, but prefabs and manufactured homes have a higher demortalization value than solid framed homes. It’s the material they are made from. Even plywood these days is manufactured more cheaply. It’s a shame not everyone is aware of the downward trend in products in the U.S.A. Yet companies get paid top dollar when constructing due to ignorance of the consumer.
Buyers need to be more aggressive and ask the questions and not be intimidated by the sellers/builders. The same of what, when, where, and how applies to all avenues of life. This is why in 1991, without training, I designed my own 3-bedroom ranch and hired a builder to meet my demands.
I took $105,000 for the initial loan and it is now valued at $550,000. I am now building my own greenhouse. I am 55 and a single mom of three for 25 yrs. If I can do it, anyone can…maybe not the same increase in realty, but surely an increase.
As for insurance…shop around. I go out of state for mine. I pay about $1,000 less a year than my other neighbors. Ask neighbors, friends, family and whoever insures them and any/all other related questions. You may be surprised at the outcome.
December 17th, 2009 at 1:23 am
Yes, it is normal. Manufactured homes (not all areas of the united states) actually depreciated more like a car. The land may not, in most cases it does not. But homeowners insurance companies never insure the land, only the home. This is the case even with brick or modular homes.
December 17th, 2009 at 1:23 am
a manufactured home that is placed on its own property on a fixed foundation with similar homes DOES appreciate in value and taxed as real estate.
now.. if one is placed in a park on blocks with the axles on it then it is a motor vehicle and does depreciate like one.