Mobile home and/manufactured home buying

[Tim Maynard]

Hello everyone.  Looking for any knowledge of purchasing a home within a mobile home park.  I'm helping my elderly father purchase one,  and it's not in the same state that I reside in.  Some questions I have are:

1.  Am I able to do typically financing with mobile, or a manufactured home in a mobile home park?

2.  Will they depreciate like a car does, or will it at least hold it's value? (I know there's many different variables that come into play)

Thanks all.  

[Frank Rolfe]

You cannot get traditional home financing for a mobile home in a park, as it's personal property and not real property. Traditionally the available financing is similar to a car loan, as it falls under the same collateral sector.

Since these are personal property, they don't wildly appreciate in value, but can do so in certain markets as well as hold their value. But you have to remember that you are not buying a mobile home for appreciation, but rather for savings -- and that's typically far higher. For example, in many markets a mobile home costs $500 to $1,000 per month less than the other housing options. If you assume $500 per month savings, that's a gain of $6,000 per year in the bank. Over a 10-year period that's a savings of $60,000 which is far more than a $20,000 stick-built home would appreciate over that same period.

Assuming that your father is a senior, I would find a good senior park (55+ community) which will offer solid amenities and probably slower lot rent increases. You will find that the floorplan and general "look" of all homes from 1990 to 2020 is fairly identical, so I would find a good used one with at least two bedrooms (one BR is simply too small).

I would pay cash for it (assume maybe $15,000 for a 1990 one in good condition) as the interest rate on the loan will be higher than any investment that same money could generate.