Are Manufactured Homes a Good Investment?

Manufactured homes are an affordable housing option for many homebuyers, and with today’s technology, they often feature the same amenities and appeal as traditional stick-built homes. Yet buyers are still hesitant to jump on the bandwagon, in large part because of the idea that manufactured homes do not appreciate in value as traditional stick-built homes do, and so would be difficult to resell. Is there any truth to this? Let’s dive a little deeper.

Yes or No?

The straightforward answer is both yes and no … which isn’t much of a straightforward answer at all. But appreciation isn’t based solely on the aesthetic of the home, resources, production process, or landownership – it’s actually a combination of all three, and land ownership tends to be the most important.

Land is a limited resource, so it appreciates as supply decreases and demand increases. Since a spectacular home can be duplicated but a plot of land cannot, land is going to increase in value even as natural wear and tear depreciates the value of a home. Because your home won’t remain in pristine condition forever, the goal is to have your land appreciate more than your home depreciates.

There are Benefits Regardless

So if your home is going to depreciate no matter what you do, why not start with the fanciest, shmanciest house possible? A couple of reasons, all of which are natural benefits to purchasing a manufactured home.

For one, manufactured homes tend to cost significantly less than stick-built homes. According to the most recent data from the U.S. Census Bureau, the average cost of a manufactured home is just under $80,000 – a large chunk of change, but significantly less than the $388,000 average cost of a new stick built home. For homeowners who are fearful of the high costs of stick-built homes, manufactured homes are a viable option.

There’s also the quality aspect. Plenty of people tend to believe the myth that manufactured homes are built to be lower quality, but that’s not the case. Since the Manufactured Construction and Safety Standards (or HUD) Code was implemented in 1976, manufactured homes are now built to federal regulations – meaning your home isn’t going to be low quality. And sure, while you might not be able to custom draw a McMansion and request it still be a manufactured home, today’s prefabricated homes come with plenty of customization options.

There’s also the expedited timeline that comes with any prefabricated home. Because these homes are constructed in an indoor facility, there are no weather delays with construction. For homeowners who are interested in a home on a much quicker timeline than a stick-built home, a manufactured home is a great option.

Of course, it’s important to note one of the appeals of a stick-built home is they are more straightforward when it comes to financing. The common house mortgage might not work for purchasing the manufactured home of your dreams – but don’t worry! We’ve got a guide for that.

So do manufactured homes appreciate in value at a similar rate to stick-built homes? Not necessarily, but there are too many factors in play to claim this is solely because they’re manufactured. Ownership of land, maintenance and upkeep of the home, and other aspects are all considerations when deciding a home’s appreciation value. And that aside, there are still plenty of reasons a manufactured home might be the best fit for you.

Still trying to find your new home? Head over to NewHomeSource for listings all over the country!