Owning vs. Renting Manufactured Homes

Throughout the country there are attractive manufactured home developments
where you own the lot. Sometimes a homeowners association similar to those of a condo or town house project takes care of
the grounds and amenities. In the Southeast and in Sunbelt areas, some developments approach those of expensive gated communities with high-end amenities such as golf courses, clubhouses, and equestrian trails.
Buying a manufactured home can be a good investment if you buy the lot with it. If you choose an area or subdivision carefully, your home will tend to hold its value.
However, if the home is on a rented pad, you’re subject to all the reasons why you don’t want to be a tenant. Why pay a monthly pad fee when you could be building equity in your own lot? Also, if the landlord doesn’t keep up the park or the area deteriorates, you may not be able to sell. If you’ve financed most of the purchase price and values drop, you may end up owing more than the house is worth. Realtors like to call this negative or upside down equity.

Mobile Homes

Forget everything you’ve heard about mobile homes, especially the Hollywood image of cheap trailers and seedy mobile home parks. New technology and improved materials are making mobile homes an attractive housing option.
In fact, the name mobile home may no longer be an accurate term. These homes are built in factory conditions using quality materials to meet federal and state codes. Unlike a modular home, mobile homes are built on a steel undercarriage. The wheels are used to transport the sections to the site where the home is slid off the carriage onto a foundation and permanently anchored.
The terms mobile and manufactured home are almost interchangeable, since both are transported in sections and joined at the site. The fine line difference is how much finish work is done on site. If you want to split hairs, you could say a mobile is completely finished at the factory and the sections joined at the site. A manufactured home may have siding or other finish work done on site to make it look more stick built.

Precut or Kit Homes

As the name suggests, a kit home is just that. All the components of the home are precut at the factory and shipped to the site ready to build. It’s kind of like a model airplane or car. All you have to do is put it together, and it’ll look like the picture on the box. Many log, timber frame, and specialty homes come in kit form because of the specialized materials and hardware needed. And you can build the house or hire the dealer’s crew to put it all together. You can buy a precut or kit home in just about any size or style, from your plans or theirs. You can choose the quality and upgrades you want and can afford. You can also choose how complete you want the kit, from the structure only to a complete house with nails included and ready to build. For the do-it-yourselfer with some spare time, this can be a ticket to the most house for the least money. The biggest advantages of kit homes are that you get everything you need precut and ready to go on site. There’s no waste unless you make a mistake. Depending on the area, you should be able to get the lumber and components cheaper than if you went to the nearest Home Depot.

To see how much you would save, get a lumber list from the dealer on a home plan you’re interested in and price it at your favorite lumberyard. Also, while you’re at it, compare the hardware and appliances offered with the kit to what you can get locally. Building a kit is going to be like constructing a stick-built home with you as the general contractor. You’ll need to schedule local build-ing inspections for each phase and hire subcontractors for the installs you don’t want to tackle, like plumbing, electrical, or sheet rocking. The bottom line is that you can save quite a lot of money if you’re handy and want to do most of the work yourself. In addition, having everything on site and ready to go can save you considerable time running around as well as eliminate mistakes and waste. Financing a kit home is similar to financing a stick-built home. Most lenders will go along with the financing when there’s a contractor involved. If, for example, your brother-law isn’t a contractor and you plan on going it alone, you’ll need to convince a lender you have the background and skills to do the job. Even then, you may have to jump through a few extra hoops the lender may require to limit its liability. If you’re building a log, timber frame, geodesic, or other unusual style home you may have to shop around for a lender who specializes in these types of homes. The dealer should be able to give you a list of references.