Do Mobile Homes Have Good Resale Value?


Mobile Home Exterior Painting

There are a lot of people with the impression that mobile homes don’t have a lot of resale value. Long-term expectations for a traditional stick-built house is that it will go up in price over time. Many people’s long-term expectations are that manufactured or mobile homes decrease in value over time. There is some truth to both of these ideas, but there are a lot of variables to consider.

Short Answer

New Manufactured (Mobile) Homes – If you were to buy a brand-new manufactured home, there are far more costs involved than just the purchase price of the home. Getting it set-up on a lot can be expensive. Chances are that you would not be able to get your invested money back quickly on this type of purchase (Cost of home plus cost of lot and set-up.)

Pre-Owned Manufactured (Mobile) Homes – If you were to buy a resale mobile home for market value, there is a very good chance that it will increase in value over time very similarly to a stick-built home.

Any home is a large investment for most buyers, be it a traditional home or a manufactured (mobile) home. Appreciation and depreciation on a home should be a real concern for any prospective buyer. There are many variables that affect the resale value of mobile homes and we’ll address those factors in this blog post. 

We’ll introduce you to the way we are able to make a profit with selling mobile homes. Even if you are planning on buying a home for your own use only, by using our techniques you’ll be sure to be in a position where you will gain resale value with your mobile home.

New Manufactured Homes

Buying A New Manufactured Home

In our business, we have purchased brand-new mobile homes, purchased lots to place them on, and set those homes on the lot complete with porches and landscaping. And, we’ve made a profit doing this. With that said, we have to be very careful about how we go about doing this to not lose money.

New manufactured homes come in all shapes and price ranges. We are buying at the low end of the scale; typically purchasing a 16’ x 60’ single-wide or a around a 28’ x 40’ double-wide. These homes range in size from 960sf to 1120sf. We generally buy a “base” home without any upgrades. Also, we make these purchases only when we’re able to get a great deal on the homes. 

Generally we pay between $49,000 and $63,000 for the base house itself. That sounds like a great bargain, doesn’t it? Maybe on the surface it does, but there are many additional costs that go into it.

Manufactured homes certainly come in much higher price categories. Upper-end double wides can easily cost several hundred thousand dollars for just the price of the home. The more expensive the price of the new manufactured home, the greater the chances are for not holding its resale value

if a stick-built traditional home of similar size can be purchased at or for less than the total cost of a new manufactured home, plus setup and land, then chances are the resale value of the new manufactured home will suffer. It may hold its value, but may not go up in price for many, many years to come.

Setup Costs

Setup costs play a major role in how much it costs to get into a brand-new manufactured home. Since you would be the first owner of the property, you would be the one paying to have this done; and it can be expensive. Let me share with you our typical setup expenses for a new mobile home.

Item Cost Single-Wide Cost Double-Wide Park (Single-Wide)
Transport to site $500 $1,000 $500
City and County Permits $750 $750
Lot excavation $800 $1,200
Install and tie-downs $4,500 $11,000 $4,500
Septic or Sewer $4,800 $6,000 $1,000
Utilities (Elec) $1,500 $1,500 $500
Cement Flatwork $4,000 $4,000
Awnings $7,000 $7,000 $7,000
Chain Link Fencing for 300 ft $3,500 $3,500
Landscaping $2,200 $2,200 $1,500
HVAC $4,000 $7,000 $4,000
Skirting $2,500 $3,500 $2,500




Total $36,050 $48,650 $21,500

From the above cost chart, you can see that in addition to the purchase price of a new manufactured home, there are plenty more costs to set it up for living. This is true whether you install a new home in a mobile home park, or purchase your own land to set it on. This is also true even if you decide to move an older home to a new location.

Remember, all this is focused on mobile home resale costs. When you buy a resale manufactured home that is already in place, whether park or its own lot, most of these costs have already been spent by the previous owner. The more you spend in these areas, the less cost you might recover when it comes time for resale. Getting a brand-new home or moving a home has its price.

Even if you find an older mobile home and plan on moving it, these costs will vary little. It is an expensive proposition to move a manufactured home. So if resale value is important to you compared to the money you have invested in the entire property, it is almost always better to find a home already set up and in place.

Finding The Right Lot

It is quite easy to get buried into the overall house package. Purchasing a lot can be as much as buying the home itself. You can also rent a lot in a manufactured home park if that is more to your liking. Keep in mind that the type of land you choose to place the new manufactured home on can make all the difference in the kind of resale value your manufactured home will experience.

MOBILE HOME PARK

Mobile home parks and the prices you pay to rent lot space varies widely by region and by type of park. We also buy and sell mobile homes that are in parks, but we never place a brand new home in a park. I’ll explain why.

We operate in the east valley area of the greater Phoenix, Arizona market. We are familiar with the parks in our area and have come up with a grading scale for the park; from 1 to 5 stars. Parks with 1 stars are places where we would never invest. Parks rated 5 stars are few, but they tend to look great and usually are age restricted parks for 55+ age group.

Most of our investing takes place in parks that we rate 3 or 4 stars. These parks are in reasonable condition, usually have a community pool, and have play areas for children as well as an established office on-site.

Lot rents in our area for these types of parks currently range from about $550/mo to $650 per month. Keep in mind that an average $600 payment for lot rent alone would support a mortgage payment on a lot you can own. For $600 per month, you would be able to support a mortgage of about $84,000 if you figure a 20 year loan at 6%. Most lots in manufactured home neighborhoods go for far less than this figure.

Placing a new home in a mobile home park is probably the worst scenario for getting a good resale value on the sale of the home.

BUYING YOUR OWN LAND

When it comes to maintaining good resale value for a manufactured home, buying your own land for the home is the best way to go. Over time, land in good areas has proven to go up in value. In our large metro area, there are only so many neighborhoods where you can own your own lot with a manufactured home, and they aren’t zoning any new ones. 

Supply can be tight as a result. Most of the time, lots only become available when there is an older, dilapidated home that must be torn down or hauled off. Quality of neighborhood should also be taken into account. Just like with mobile home parks, the quality of mobile home subdivisions tends to vary greatly. 

As an example, a typical 6,000sf city lot zoned for a manufactured home might cost about $40,000 in an average manufactured home neighborhood. Decades ago, there were many of these subdivisions built that were age restricted at the time, but the restrictions have since been lifted. These areas tend to have been maintained better than other areas. When I find a lot available in one of these types of areas, the land will typically cost about $60,000 to $70,000.

In the example of mobile home park, lot rent of about $600 per month, you don’t get anything for your money but a space to park your home on. When you own your lot, you own the entire property, land and home. When homes are packaged like this, they can then be considered “real estate” with certain procedures done. 

When your investment can be considered “real estate” it opens up lot of options for financing and for selling. Homes like this tend to have the best resale value when it comes to manufactured housing.

SUMMARY FOR RESALE VALUE OF A NEW MANUFACTURED HOME

  • Cost Of The Home – The greater the cost of the new manufactured home, the less chance there is for holding a good resale value. Base models cost far less than ones optioned up, but may sell for similar prices a few years down the road.
  • Setup Costs  – can add significant expense to the overall cost of a newly manufactured home. It is important to know exactly what these costs will be “before” committing to the purchase of a new manufactured home.
    • With a new manufactured home in a park, the expensive setup costs are pretty much swallowed up and will add nothing to the resale value of a home. 
    • Setup costs for a new manufactured home on your own lot become part of the overall investment in the “real estate”. It still costs plenty, but the value of the home as “real estate” will usually hold its value and be returned upon the resale of the home and land.
  • Buying Land – This is the best option to protect the resale value of your new manufactured home.
    • You own lot will allow the home to be valued as an actual piece of real estate. This helps with financing options, and financing options enable better salable value.
  • Summary – Buying a brand-new manufactured home will not keep its value as well as a resale manufactured home will. In some cases, especially in parks, the value of the home will most likely crop when compared with the total costs you paid including setup. A new manufactured home in a park is certainly the worst case scenario for a manufactured home holding its resale value.

Older Manufactured Homes

How Is The Market For Older Homes

Now that we have discussed what affects resale value of a manufactured home when you buy new, we’re going to turn our attention to resale value of older resale mobile homes. The resale market is a completely different animal than newly built manufactured homes. 

THE GOOD NEWS – Resale value and appreciation are much easier to attain with pre-owned resale manufactured homes!

Because manufactured homes represent affordable housing for a lot of people there tends to be a good market for them. Most buyers will be trying to finance their homes, and manufactured home financing is often a limiting factor.

IS THERE FINANCING AVAILABLE? – Most investors tend to pay cash for mobile homes, while most end-buyers will want to finance their purchase.  During the “great recession” a lot of the financing for manufactured housing dried up and was difficult to come by. 

Fortunately, that has changed, and there are a number of companies dedicated to financing older mobile homes. They prefer the homes to be on their own land, but, there is financing also available for older homes that are in parks. The caveat for obtaining financing is that the home must be built after the HUD manufacturing standards were put in place on June 15, 1976. Homes built prior to that date generally will not qualify for financing. Follow the link for additional information on Mobile Home Financing.

Resale Value For Older Mobile Homes That Need Lots Of Work

This is the best way to purchase a manufactured home and not only maintain a good resale value, but add equity as well. In the last few years we have purchased many mobile homes that need heavy remodeling. We’ve purchased them both in parks and on their own land. 

BEST VALUE COMES WHEN YOU BUY – When buying a mobile home, or a regular home for that matter, you really make your money when you buy the house. Negotiating the deal so that you know what money you will need to put into the house to bring it to your standards, and what its value will be after you do the work will help you in making the offer at the right price.

BUYING A FIXER-UPPER IN A PARK  

There are many local parks where we have actually gotten homes for free or paid around $1,000 for the purchase. These are homes that are usually built in the 1980s and are 14’ wide. Some of them we’ve gotten from the park and others we have purchased from the owners.

These are homes in serious need of work. They usually look and smell pretty bad. They often need roof repairs, subfloor repairs, kitchens and bathrooms redone, new windows and new HVAC systems. I know that sounds like a lot of work, and it is. But, that is why we’re able to acquire them for next to nothing. It usually costs us about $20,000 in repairs to put the homes into very nice condition. 

These homes will usually sell for $25,000 to $40,000 and we are usually able to find cash buyers.

If you’re looking to buy a home for yourself, this is a great way to not only get into a nice home for very little money, but also be able to have plenty of equity as well. Just remember, that in a mobile home park, the only thing that you own is the home.

If the home is allowed to deteriorate again in condition, then the value will drop accordingly. But, if the home is maintained well, then the value will go up with the overall price of the market.

In the appreciating market we’ve seen in the Phoenix metro area the last few years, the prices of these mobile homes have increased at about the same rate as traditional site-built homes.

Buying a Fixer Upper On Its Own Land

This is the best thing to do if you can afford it. Just like the discussion above about older fixer-upper homes in parks, the same rules apply for homes on their own land. The great thing about following this path is that FHA financing can be available for a buyer as long as the home is built after the HUD date of June 15, 1976. 

We recently purchased a 1998 2,200sf double-wide home on its own land. The home had been vacant for about 10 years. It had broken windows, a missing HVAC system, water heater, and holes in the floor in many places where stray cats had been entering.

The home looked horrible and smelled worse. We purchased this home for $52,000 and spent $40,000 in renovations, but it looked phenomenal when we were done. The home sold in a week for $168,000 and the buyer used a low-down FHA mortgage to buy it.

There are a lot of older manufactured homes out there that need significant rehabilitation. Many of the owners do not have the money to fix them up. These homes are obtainable at very reasonable prices.

RESALE VALUE FOR THESE OLDER FIXER-UPPER MANUFACTURED HOMES

For manufactured housing, this is where you’ll be able to get the best resale value, comparatively speaking to the purchase price of the home. Bargains are made when you purchase the home. By knowing what these homes might bring on the market after rehabilitation, and how much it will cost to get them into great condition, you can make an offer that can actually make you money.

One of the best things about these older homes, is that the resale values for them tends to move with the market for traditional  homes; just at a lower price point.

Resale Value For Older Homes In Good Condition

The majority of buyers are looking for homes that are “turn-key” and need little, if any, renovations. As long as these homes were built after the magical HUD date of June 15, 1976, they will qualify for financing whether they are in a park or on their own land.

Just like with a traditional stick-built home, good resale value comes when you actually buy the home. We will often take buyers out to see homes that they have selected off of the internet websites. Many of these homes have been renovated to a very high standard, staged and landscaped well, and overall have a “model-home” feeling to them.

These are homes that will usually get multiple offers and go under contract almost immediately after hitting the market. The thing I often see is that buyers are willing to offer more than the home might be worth because the cosmetics look so good. 

It is important if you plan on buying a nicely renovated manufactured home, that you don’t get over-zealous and offer an amount that is beyond the actual value of the home. Frosting is cheap, so don’t let new carpet and paint lure you into making an offer that is higher than it needs to be.

If you overpay, then your resale value will not be there when it comes time to sell. This is true of a traditional or a manufactured home. If you buy a nice home at a good price, then you can expect the value of that home to move with the market. This will be true whether it is in a park, or on its own land. 

Of course, homes on their own land will cost significantly more than one in a park, but you will be investing in the land instead of paying rent on a lot. Overall, the payment on a home on its own land will be less expensive in many cases. A park home will have a payment on the home plus the lot rent. This is often more than the single payment on a home on its own land.

Resale Value Of Pre-1976 Mobile Homes

Generally speaking, there isn’t any financing available for these homes. As a result, it is pretty much a cash and carry market. This is true regardless of the condition of the home.

These homes tend to be much harder to sell for a good price because many of them are 12’ wide or less. I see some of these homes go for reasonable amounts if they are in age restricted 55+ mobile home parks. Really nice ones might sell for $10,000, but most will be priced far lower. I don’t see that the resale value of these homes moves in step with other manufactured housing.

The reason is that there just isn’t that large of a market with money for them. The folks who can afford to pay cash and want to live in such a home typically are not able to pay much for them.

In a mobile home park, these homes can often be found for almost nothing, but I don’t usually purchase them myself. By the time any real rehabilitation is done, it generally is more than the house will be worth

The one exception to that is if the home is on its own property. Usually, the cost of the package will be the value of the land only. The house generally comes for no cost. I purchased one of these for an investment property. The cost of the package, home and land, was $40,000. The home is a 12 x 60 and was in reasonably good condition. With a little fix-up work, the home rents for $800 per month. That is $9,600 per year an gives a cash on cash return of 24% annually. Not a bad return!

Related Questions:

How Long Do Manufactured Homes Last?

How long do manufactured homes last? The quick answer to this is “as long as you take care of it”! This is true for most everything in life. I’ve seen original mobile homes from the 1960s that look almost brand-new inside and out and they’ve never been remodeled. I’ve also looked at some that are just a few years old that are in need of a full makeover.

Even in the pre-HUD manufacturing era prior to 1976, there are still plenty of mobile homes around that look good. Things will last if they are maintained. Maintenance of a mobile home is a bit different than maintenance on a site-built home. Some of the areas to watch for are:

  • Roof leaks. Older mobile homes with metal roofs should have the roof recoated with sealer every couple of years. If water gets into the house it can quickly ruin ceiling panels.
  • Plumbing leaks – Most manufactured homes use either a chipboard subfloor or particle boards. Either is a manufactured product and is easily damaged by water. Check plumbing regularly for signs of any leaks.
  • Soft-Spots In The Floor – These are mostly caused by water. Once you feel a spongy area in the subfloor, it should be repaired. These repairs are not difficult and will keep the home feeling solid and the flooring in place properly.
  • Windows Sealed – Check the windows at least once per year to make sure there are no water leaks coming in. Repair and seal as necessary.
  • Relevel – Sometimes the ground will settle underneath the piers that the home sits on. It is a good idea to check the leveling of the home every 5 years or so. It is not expensive to have this done and will keep the home from twisting, and will keep the doors and windows opening properly

With these maintenance items along with general careful care of the home, a manufactured home should last a lifetime.

Is Buying A Manufactured Home A Good Idea?

Is buying a manufactured home a good idea? The answer to that question really depends upon what your goals might be?

  • Affordable housing for yourself
  • Affordable housing for a family member
  • An investment with a high rate of return
  • A possible house flipping project

I have actually done all of the above. Manufactured homes, if purchased at the right price and taken care of will bring decades of value as a living space as well as great returns on investment for rental property.

Chuck O'Dell

Chuck has been renovating and flipping properties since 2003. At this point he has over 100 properties under his belt. Chuck says that rehabbing homes is the most fun part of his real estate career. He helps clients get their homes ready to sale, helps his buyers with after-purchase remodeling; often very substantial renovations including full kitchens and bathrooms. Chuck started investing in, buying, renovating, selling, and flipping manufactured homes both in parks and on their own fee-simple lots. He says that one of the most satisfying part of renovating the mobile homes is creating beautiful, affordable housing that people are proud to own, and call home!

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