Rental Property Investor · New Braunfels, TX · Member since 2021 · 288 posts · 255 votes
A friend of mine bought this 15x76 3 bed/2 bath mobile home brand new in 2012 and financed it for 20 years. After 14 years of making payments he still owes $26,000. His lot rent when he bought it was $200/month plus water/electricity. Today it is $700/month plus water/electricity. It just makes me sick that poor people get sucked into these "cheap" homes because that's all they can afford and then they never build any equity. Then they can't sell it because they don't own the dirt under it. He sold it Saturday for $18,500. Most offers were $10,000. So after 14 years he had to write a check for $7,500 to walk away from it.
On the positive side, we got him into a stick built home (owner financed) and in 15 years he will have a paid off property that is worth at least double what he is paying for it.
Real Estate Broker · Cincinnati, OH · Member since 2022 · 133 posts · 86 votes
1mo
This is a great example of why the purchase price alone doesn’t tell you whether something is truly “affordable.”
A mobile home on leased land can look inexpensive upfront, but you have to factor in depreciation, financing terms, and especially the fact that lot rent is completely outside your control. Going from $200 to $700 per month is a huge change, and after 14 years of payments, having to bring money to closing just to get out is painful.
The good news is that he’s now in a situation where his monthly payments are actually working toward ownership of both the home and the land. That distinction can make a massive difference over 10–20 years.
There’s nothing inherently wrong with manufactured housing, but buyers really need to understand the difference between buying an affordable home and buying an asset that has a realistic opportunity to build equity.