Chapter 1 of 20
Is a manufactured home right for me?
What manufactured housing does well, what it does poorly, and the situations where it is clearly the right or wrong answer.
2 min read
Manufactured housing delivers more finished square footage per dollar than almost any other path to homeownership. A factory building homes on a line, to one federal standard, with bulk-purchased materials and no weather delays, is simply more efficient than a crew building one house on one lot. That efficiency is real and it is the main reason to consider this route.
The trade-off is how the home holds value, and it depends almost entirely on one thing: whether you own the ground. A manufactured home on land you own, on a permanent foundation, converted to real property, tends to behave like real estate. The same home on a leased lot in a community tends to behave more like a vehicle, it depreciates, and your monthly cost can rise without your consent.
Manufactured housing is usually the right answer if you want maximum space for your budget, you plan to stay put for a long time, and either you can buy land or you have found a community whose rules and rent history you are genuinely comfortable with. It is usually the wrong answer if you expect to sell within a few years, or if you are counting on appreciation to build wealth and cannot buy land.
It is worth being honest with yourself about the second-hand market too. Selling a home on a leased lot can take longer than selling a house, because your buyer pool is limited to people the community will approve and who can obtain the right kind of financing.
Key points
- You get substantially more finished space per dollar than site-built construction.
- Whether you own the land is the single biggest factor in how the home holds value.
- Long time horizons favour manufactured housing; short ones do not.
- Resale on a leased lot is slower, because the buyer pool is narrower.
Watch out
Do not assume "manufactured home" means "starter home you will trade up from in three years". The transaction costs and the depreciation curve both punish short holds, particularly on leased land.
Questions to ask
- How long do I realistically expect to live here?
- Can I buy land, now or later?
- If I had to sell in two years, could I accept taking a loss?