Buying a Mobile Home Instead of a Regular Home: Pros and Cons

Weighing the cost and convenience of mobile homes with other factors such as depreciation in value and difficulty selling.

By , J.D. · University of Utah S.J. Quinney College of Law

There are several advantages to buying a "mobile home" instead of buying a traditional, "stick-built" house, but there are also disadvantages. Before you decide to buy a mobile home, let's weigh the pros and cons to make certain your decision is consistent with both your financial and housing goals.

Features of the Modern Mobile Home

Mobile homes, also known as "manufactured homes," are built in a factory and placed on a trailer chassis to allow them to be moved. Mobile homes are sometimes placed in a mobile home park or on leased land. In these cases, the owner rents a space or leases land, but owns the mobile home itself.

Alternatively, mobile home owners can place mobile homes on land they own or are buying under contract.

Advantages of Buying a Mobile Home

One advantage that mobile homes offer is that they're often a lower-cost option to having a stick-built home custom built for you. In this regard, mobile homes can make homeownership easier to achieve. And since mobile homes usually cost less per square foot than stick-built homes, you can get more space for your money.

There are some stick-built home builders that have standard floor plans and options that allows them to build homes for prices similar to mobile homes. If you prefer a stick-built home, you might look into whether such a builder is in your area, and compare the quality of construction with a newer mobile home.

Another advantage you might find with mobile homes is flexibility. Since mobile homes are usually more affordable than stick-built homes and only semi-permanent, if you own land, you can place a mobile home on it now and remove it in the future (though removal isn't as easy as it sounds, given the plumbing and other attachments). This might be an option if you are uncertain of whether you want to own the land long term, do not want to commit to a stick-built home now, or cannot afford a stick-built home right now.

Although mobile homes are not easily moved once set up, they are easier to move than a stick-built home. Once a stick-built home is built, it is more or less there permanently (or at least until a natural disaster occurs or someone undertakes a demolition project).

An additional advantage mobile homes offer is that they are usually built in controlled environments. This means they can be consistently built to a high standard. And because they are manufactured in such conditions, construction delays due to weather or difficulty scheduling subcontractors are less likely.

Disadvantages of Buying a Mobile Home

A disadvantage of buying a mobile home is that its value will depreciate quickly. Like a new car, once a mobile home leaves the factory, it quickly drops in value. Stick-built homes, on the other hand, normally appreciate in value over time because the stick-built home owner almost always owns the underlying land.

A person who owns both the land and the mobile home might see the value of the combined property increase over time, but that is likely the result of the underlying land increasing in value, not the mobile home.

One reason mobile homes depreciate in value is because they are considered personal property, not real property. "Real property" is defined as land and anything attached to it permanently. Anything that can be removed without "injury" to the land is not real property. Personal property, on the other hand, is anything that is movable and not classified as real property. Even though mobile homes are not easily removed from land once placed, they are still considered personal property (although in many locations a person who owns both the mobile home and underlying land can convert the mobile home to real property by taking some affirmative steps). On the other hand, stick-built homes are considered part of the real property.

A related disadvantage is that mobile homes, because they are personal property, are usually more expensive to finance. Personal property loans, sometimes called "chattel loans," usually come with higher interest rates and shorter terms than mortgage loans.

Additional disadvantages to mobile homes have to do with them typically being located in a mobile home park. Despite "owning" your actual home, you will still have a landlord, to whom you will have to pay rent and answer to for your compliance with park rules. The landlord might at some point decide to evict you, in which case you'll be faced with either moving or selling your mobile home.

Mobile homes are not easy to resell, especially when located in a mobile home park. Because they are relatively immobile after being set up, unless the buyer wants to keep the mobile home where it is, finding a buyer can be a challenge. It can cost several thousand dollars to move a mobile home.

This might not be a disadvantage, though, if the mobile home and land are sold together, just like a stick-built house. However, despite significant advances in the quality of mobile home construction, there is still a stigma attached to mobile home ownership that could turn some buyers off.

A final disadvantage is that, unlike stick-built homes, which are built on permanent foundations, mobile homes are usually placed on temporary foundations. During a natural disaster, like an earthquake or severe storm, mobile homes can be more prone to damage.

To sum up, modern mobile homes can provide a quality, cost-effective alternative to a stick-built home. However, they have some disadvantages to stick built homes that you need to consider. Factors to consider, such as costs, laws that impact mobile home value, and low cost stick-built alternatives vary from region to region, so be sure to do your research.

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