Mobile Home Depreciation: What You Need to Know
Have you recently bought a mobile home and you’re left worrying if it will depreciate?
Mobile home depreciation is a common concern among homebuyers. Many will say that they depreciate as quickly as cars do after leaving the dealership. It is impossible to predict whether every manufactured home will increase in value over time. But – what you need to know is – that the value of mobile homes is very comparable to that of stick-built homes. Contrary to popular belief, the value of mobile homes tends to increase rather than decrease over time!
So take a deep breath, you have NOT made a bad decision! We promise.
Here’s some even better news: You can take steps to ensure your mobile home stays in tip-top shape as the years go by, and the chances of depreciation will be less and less.
Without further ado, let’s get started!
The Truth About Mobile Home “Depreciation”
If the price of a mobile home or traditional site-built home has changed from the previous year, either the location, the state of the home, or consumer demand is to blame. This isn’t a result of “appreciation” or “depreciation,” as many would lead you to believe.
Another point, a mobile home hasn’t depreciated if it appraises for less than the model-year purchase price. Simply put, buyers are willing to pay more for a brand-new home.
Factors that Affect the Price of a Mobile Home
When it comes to resale value, a mobile home’s value can increase. But let’s go over a few significant reasons your mobile home could depreciate:
Your mobile home’s value may significantly decline if it’s situated in the wrong area. Now imagine placing a brand-new mobile home in a sketchy neighborhood or a run-down park. Yes, your resale likely went down over that. In the future, selling your house will be more challenging.
The point is: location is paramount!
Probably the most major factor in mobile home depreciation is age. A mobile home’s age, specifically whether it was constructed before or after 1976, is another deciding factor in price.
The HUD code, in place since 1976, regulates the safety and construction standards for manufactured homes. Simply put, a mobile home built a long time ago will carry much less value than a modern energy-efficient double-wide mobile home!
Well, Is There a Chance My Mobile Home Can Appreciate?
Now, it’s important to discuss how mobile homes can appreciate in value. As we mentioned above, a mobile home’s value is greatly influenced by its location. The likelihood that the home will appreciate increases if it is on land, as opposed to a worn-out mobile home park.
The value of the mobile home may also depend on its condition. Keeping your mobile home in shape with routine maintenance is one of the biggest factors. Updates and modern finishes throughout your mobile home are also vital to help it appreciate.
Most importantly, the likelihood of appreciation significantly increases when a manufactured home is built to FHA standards. A permanent foundation with skirting, a water/sewage system, and a deck at each entry point are just a few requirements.
To be clear, a mobile home’s value cannot be guaranteed to increase, but the same cannot be said for stick-built homes. Don’t fear! If built to FHA standards, maintained properly, and in a desirable area, mobile homes typically increase in value over time! So forget about the doom and gloom you hear about mobile home depreciation!
If you have any questions or feel hesitant about mobile home ownership, speak with a member at Braustin Homes today! We are more than happy to help ease any concerns you may have.