Mobile Home Economics

R

Ripley

For everything else, being "portable" is an added feature and would mean a higher premium.

But, when it comes to houses, both the single family residential house and a mobile home are made of the same materials, the same windows, same doors, vinly paneling etc... yet, one depreciates while the other appreciates.

Why this discrimination?
 
Quote from Son of a Gann:

You do not own land so do not get any appreciation.
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Assume that the land is owned in both cases, it still depreciates..
 
generally speaking most of the people that own mobil homes do not own the land that is why those who own the land do not make the rule.

.....even good stocks go down in a bear markets.
 
Quote from Ripley:

For everything else, being "portable" is an added feature and would mean a higher premium.

But, when it comes to houses, both the single family residential house and a mobile home are made of the same materials, the same windows, same doors, vinly paneling etc... yet, one depreciates while the other appreciates.

Why this discrimination?
More...

This is just another example of "the man" trying to keep the little guy down. Seriously, both of them depreciate in REAL terms. But when you compare the structures, the mobile homes depreciate faster than inflation can offset it.

SM
 
Quote from Ripley:

For everything else, being "portable" is an added feature and would mean a higher premium.

But, when it comes to houses, both the single family residential house and a mobile home are made of the same materials, the same windows, same doors, vinly paneling etc... yet, one depreciates while the other appreciates.

Why this discrimination?
More...

All improvements depreciate, whether stick built or manufactured.
 
"This is just another example of "the man" trying to keep the little guy down."

Bankers are prejudiced against the "Velvet Elvis".
 
The older mobile homes are total junk. They don't hold up well. Ever been inside one?

The new term is modular housing. I passed a modular dealer last weekend on the way to visiting a remote relative. There are two story modular houses nowadays that, from a distance, are barely distinguishable from the basic houses you might find in a new subdivision.

Land isn't so much the issue as a mobile home in an aged mobile home park in an area with pricey real estate is frequently not even valued anywhere near the raw land value of the lot. The exception is a mobile home park in Malibu where units are in excess of $1M.

Here are some other ideas:
-Guilty by association. Look at the neighbors. People who live in houses with hitches are not likely to keep up their property, have stable lives or clean criminal records or well-paying jobs.
-Social stigma.
-The older ones are an eyesore.
-Mobile homes are most common in rural areas which are too poor to attract developers of low and mid priced real estate.
-Zoning laws. Most mobile home parks in cities are sequestered near high crime and low income areas such as industrial parks. Citizens concerned with property values do not want them nearby.
-They depreciate faster than they fall apart so real estate investors don't buy and the disparity between mobile homes and broken down low priced traditional housing is exacerbated.

What is interesting is that in remote areas, land is dirt cheap and the real expense is the house. Shoddy modular houses which rapidly depreciate are often more expensive than comparable existing traditional housing or the cost to hire a contractor to build something basic. Yet modular housing remains popular. The reason might be that financing is easier.
 
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