According to the real estate company Zillow, housing costs are rising much faster than incomes for many people. As a result, they could face financial struggles while juggling childcare costs, job opportunities and concerns about schools and safety.” The same report shows that many people are missing out on a key consideration: manufactured homes. If you currently rent a house or apartment, learn how buying a manufactured home could be your path to home ownership.
Who Should Consider a Manufactured Home
A manufactured home or modular home makes a great option for first-time home buyers. According to the Manufactured Housing Institute, 9% of new single-family homes are manufactured homes. Many other residents find them ideal during life transitions, such as after the kids move out on their own, or upon retiring from the military.
According to the MHI, about 22 million people live in manufactured housing. They have an average median income of $30 thousand, while the ages of residents span all generations with 18-29 year olds at 23%, 30-39 and 40-49 year olds each at 18%, 50-59 year olds at 22%, and 60+ at 19%.
Cost of Owning vs. Renting a Home
Renting is on the rise. You may have seen reports that more people are renting homes than in the past 50 years, and some people are selling homes and then moving to rentals. Before you start to think of yourself as a trend-setter, consider that not all of these renters are doing so by choice but due to financial hardship. However, a smart investment in a manufactured home can save you more in the long run.
One appeal of homeownership is affordability: manufactured homes cost an average of $49 per square foot compared to $107 for a site-built home, according to MHI. The median rent in the U.S. for a one-bedroom apartment, meanwhile, is $1,234.43, while the average size is just 678.32 square feet, according to Business Insider. If you’re at any stage of life where you’re comparing renting against owning your own place, a manufactured home could be your smartest choice.
This loan calculator—and others like it—help you weigh the long term costs of buying vs. renting a home. These provide a rough guide only, and every family’s situation will vary. Generally, however, the results tend to show a net savings within just a few years for owning a home.
Nevertheless, you might think that the upfront costs of buying, including a down payment and mortgage fees are out of reach. But remember, manufactured homes are less than half the cost to build per square foot compared to site-built homes ($49 vs $107). With a lower-priced home comes a lower down payment and fewer fees.
Manufactured home construction is less expensive than on-site construction, but that is not due to cheap material or low quality craftsmanship—a common misconception. Efficiency is the real reason behind the lower costs. Builders like Jacobsen Homes source construction materials in bulk, greatly lowering material cost which is typically the largest piece of any construction budget. And because these homes are built in secure, controlled environments, other situations that affect on-site construction budgets—like weather and theft—will not disrupt the build or budget of a manufactured home.
Explore financing options and do the math to learn if buying vs. renting is right for you.
Value of a Manufactured Home Over Time
Another misconception about manufactured homes is that they depreciate over time, or at least appreciate very little. Actually, manufactured homes appreciate at similar rates to their site-built counterparts in the same area, and have even outpaced them in some places.
The manufactured home industry wouldn’t be booming if the homes were of low caliber. In fact, the construction of these homes has to be even sturdier than that of traditional homes because they must be able to withstand transportation from the production site to the build site. The tradesmen who build manufactured homes use tools that increase durability and are not used in on-site construction. Quality equals long term value.
A Manufactured Home Allows More Freedom Than a Rental Property
Everyone wants to make their house a home. When it comes to the interior of manufactured homes, top-of-the-line options can be included in every aspect, from floor plans to finishes. With a rental property, you’re stuck with the colors, finishes and fixtures the landlord chose; and let’s face it, landlords tend to choose the cheapest options.
On the other hand, when you invest in your own manufactured home, you chose everything from the color palette to energy efficient upgrades. Walk-in closets, double vanities, EnergyStarⓇ appliances and granite countertops make today’s manufactured homes anything but your stereotypical double wide. High-end options like these are more than just available, they are likely more affordable since construction costs are so much lower than on-site builds.
Important Things to Know When Buying a Manufactured Home
If you choose to reap the benefits of buying a manufactured homes instead of renting, keep in mind that you can choose to buy or lease the land for your manufactured home, so you will need to take those costs into consideration as well.
If you’re tired of making a rent payment every month for a place that doesn’t feel like it’s truly yours, find a Jacobsen Homes model center near you and get on the path to home ownership.