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Many people who buy manufactured homes are retirees who want the lifestyle in the 55+ communities where the lots are either purchased or leased. Others buy manufactured homes to live in while they are building a custom home. They later sell the home and move it off the lot. Manufactured homes also make good housing for people who live in remote areas that construction crews may not be able to reach. Manufactured homes are also a good solution to housing situations where natural disasters have destroyed many homes. The federal government used manufactured homes in the aftermath of Hurricane Katrina to house families who had lost their homes.
Most people want to make investments that will pay them back over time. Real estate typically is a good investment and buying a home, manufactured or site-built, is expensive. There are two ways to own a manufactured home. The first is to put it on land owned by the home buyer, and the second is to put it on a leased lot. Homes placed on homeowner-owned land will appreciate in value; homes placed on leased lots will depreciate. Manufactured homes are legally treated as vehicles, not as real estate. If a homeowner wants to gain money on an investment in a manufactured home, the best choice is to put it on lot he owns. - Manufactured homes are built to a strict code enforced by HUD. They must be structurally sound in order to be transported from the factory to their destination. Depending on the jurisdiction, they are often built to higher standards than a comparable site-built home. However, some of the materials used in the homes can be lower quality than the consumer realizes. For example, the manufacturer may have cut corners on things like flooring, cabinets, windows and trim. When selecting a manufactured home, the buyer needs to find what the standard features are. Buyers will have to ask for specifics regarding the sub-flooring (it could be particle board which is not water-resistant) and the cabinet material (it could be faux wood). The plumbing material is also important: different grades of PVC are commonly used for plumbing. The faucets could be of lower quality, as well. Rather than having an electroplated metal surface, the surface could be a paint, which is not durable.
- Most people who buy a new manufactured home need to finance it. Legally, these homes are vehicles, but they can be financed using 30 year, fixed rates loans. Unless the buyers are certain that their incomes will increase, a fixed rate is the best possible mortgage. There will not be teaser rates in the early years of the loan, but the payments will never escalate above what the loan contract specifically states. If you buy land and a manufactured home, you can finance it using conventional real estate financing vehicles. Typically, manufactured homes can take longer to sell than site-built homes, so having a payment that is affordable over time is essential. When put on leased lots, buyers need to realize that the rental payments for the lot are likely to increase over time. It is not uncommon for the rent payments on the land to exceed the payments for the house.
