Depreciation - Location and Depreciation
Hey look it's the Doublewide Dudes.
Mousetrap: Alright, How we doing AP
A.P: I'm good, I'm good still loving that intro.
Mousetrap: Yeah it's fun isn't it. Well welcome back to the third episode on depreciation. The first two we covered the myth of depreciation, we talked about getting the best price. Best initial cost that way you can set up your family for success. but you were mentioning that there were some other factors to determine whether you homes were going to depreciate or not.
Mousetrap: I can imagine whether putting your home in a mobile home community park or having it on your own piece of property can have an effect. So how does the location of your home determine whether your home is going to appreciate or not.
A.P: Definitely a great question, and this is one of the factors that plays a major role in whether a home down the road is going to be worth more, or less than what you payed for it. You know with land, God's not making anymore land so if you're buying land with your home in an area that is popular and folks want to move to, then it's not just the home that may go up in value it's also the land itself. We actually have one of our team members Ernest Gomez, him and his wife Liza bought a single wide about three or four years ago and putted it on just under an acre out there in Castroville, Texas. Which since they purchased it, has become a very popular place to move and there aren't a lot of homes for sale and definitely not a lot of affordable land for sale out there. So their property the single wide and the land together is actually worth about twenty to twenty-five thousand more in today's market than it was when they payed for it.
Mousetrap: So it sounds like their manufactured home would appreciate just like a traditional site build would.
Mousetrap: So what about the folks that can't necessarily afford a piece of property and all the improvements and utilities that go with it? What would you say those listeners?
A.P: Well first off i would certainly applaud them for taking that first step to becoming a homeowner. And really even if you're purchasing a manufactured home and putting it in a community you're still going to get more money back when you go to sell that, than you would if you were renting an apartment or renting a house.
Mousetrap: Yeah it's important to keep in mind that if you're a renter, if you're a tenet, you're going to get zero dollars back at the end of your stay there.
A.P: Exactly, exactly, there's just no asset, there's nothing to sell. So even if you're a first time home buyer and the best you can afford is a manufactured home in a community, You're still going to have a leg up on those folks that decided to rent. You remember the Chavez family, right?
A.P: Leroy and Michelle and the kids, well that's the decision they made ten years ago, to purchase a home, owner financed in a manufactured home community and now fast forward ten years down the road they're fixing to come into close on a brand new home on an acre of land, but at this point in time they have an assets now that they're going to be able to resell and put a chunk of change back in that Chavez family bank account.
Mousetrap: Yeah, I remember too he was shopping at another competitor before and weren't they going to have him sign over the title for basically nothing in return.
A.P:Yeah and again that's why we wanted to do these podcasts and educate people. You know I certainly didn't know this information years ago before I got into the industry and he was actually just going to sign the title over because he didn't know there was value in his home. You know, in his mind the seller was actually doing in a favor because he still owed a couple years on it. And the reality is in today's market his home is worth quite a bit more than what he owed on it. So we were happy to take some pictures and help them list it on our website direct some traffic and some potential buyers there and hopefully when it's all said and done at the end of this we're helping two families become homeowners.
Mousetrap: Yeah that's beautiful, I'm sure he's going to be happy about that. And that just goes to show right there that even a used home owner financed or whatever you're into at the moment, that if you do decide to make a housing change from the current home that you're in, it's worth doing your research to find out exactly, what the house if worth that way you're not shooting yourself in the foot.
A.P:Right, I mean the last thing we want our listeners to do it leave any money on the table.
Mousetrap: Perfect, well that does it for episode number three. Join us on the next one where we'll fill you in on how the availability of housing options and the overall market will come into play to determine whether your house is going to depreciate or not.
Thanks again we'll talk to you then.