Why not live in a mobile home?

[Aardvark]

...I'm new to the US.
...I'm based in Boulder, Colorado.
...Mobile home parks are well located, in good condition, and super cheap.

What am I missing? Why is this not a massive Mustachian hack that everybody on here is talking about? Is it just the stigma that comes with living in a mobile home? Coz I can very easily get over that. Or is there a sensible reason to not see this as massive opportunity?

[HPstache]

...I'm new to the US.
...I'm based in Boulder, Colorado.
...Mobile home parks are well located, in good condition, and super cheap.

What am I missing? Why is this not a massive Mustachian hack that everybody on here is talking about? Is it just the stigma that comes with living in a mobile home? Coz I can very easily get over that. Or is there a sensible reason to not see this as massive opportunity?

There is a stigma that goes with it, but you're right... easy to get over that.  I think the "issues" with buying a mobile home is that they depreciate in value and can be more difficult/expensive to insure and may also be difficult to finance if older.  I think they could be a great hack if you're a cash buyer and just don't care what people think.

[Sibley]

You're going to have to be very careful with terminology here. Mobile home vs manufactured home vs modular home.

https://www.bobvila.com/articles/mobile-home-vs-manufactured-home/

The biggest issue with any of these structures is what building standards were they built to. Mobile homes are built to lower standards, and when you're dealing with things like tornados that's literally deadly. In CO, you might be more concerned with things like insulation and snow load.

As for these mobile home parks you're looking at, it's important to know how they were built. If they were built to adequate standards, then go for it if you want. Just be aware that there is social stigma - largely because of the mobile homes that were built poorly and thus fell apart/killed people.

[Morning Glory]

Mobile (not modular) homes are also extremely inefficient and expensive to heat and cool, compared to an apartment or even sfh of the same size.

[RWD]

You also have to watch out for what you're actually buying. A lot of mobile homes you buy the home but rent the land it sits on. If the rent gets jacked up on you then you'll be put in the tough position of deciding whether to just accept the rising costs, sell (see depreciation mentioned above), or trying to move your mobile home (quick search indicates this costs thousands or more).

[PDXTabs]

You also have to watch out for what you're actually buying. A lot of mobile homes you buy the home but rent the land it sits on. If the rent gets jacked up on you then you'll be put in the tough position of deciding whether to just accept the rising costs, sell (see depreciation mentioned above), or trying to move your mobile home (quick search indicates this costs thousands or more).

Rent is IMHO your largest risk. In some ways it is the worst of both worlds, paying rent to do maintenance on the property that is a depreciating asset without any of the land appreciation.

But if the math pencils out it pencils out. Take the money that you save and put it into a different investment.

[Villanelle]

I'd absolutely consider it if I could own the land it was on.  Otherwise, you are at the whims of the landlord, and they know that you are unlikely to move your home off the land, so they have the upper hand. 

[ChpBstrd]

The problem with rented mobile home lots is that they cost about a third to a half of what a mortgage on a site-built house + lot might cost in a LCOL area. After many years of paying that, your mobile home will have greatly depreciated and you own no land. The rent goes up each year. So basically you start over and over again through life, never building up any home equity, never enjoying any appreciation, and never obtaining inflation control over your cost of housing. It's a financial trap.

Despite all that, the cost of moving one's mobile home (e.g. in response to unreasonable rent hikes or deteriorating conditions at a park) is $5-$15k depending on how much DIY you do and how big the house is. So they're not actually mobile.

[Weathering]

In California all the mobile home parks in desirable areas have significant wait lists. However, this is because CA has strong protections for mobile home owners. Rent increases are controlled/limited. Mobile home parks cannot be sold without the owner incurring huge costs to relocate all owners to a comparable property.

Maybe these same protections of mobile homes will be adopted by other states.

I’d say that if you can find an available mobile home park in Boulder then take it. You will share in all the amenities of the area without the multimillion dollar price tag.

[thesis]

I read a story many years ago about someone, possibly in the FIRE community, who bought a fixer-upper mobile home for super cheap and patched it up. Because it cost so little and I believe they did the work themselves, they got an excellent deal. They lived in it for years on the cheap, while saving up to buy a house outright, then actually sold the mobile home for a small profit because it was worth so little to begin with. I really wish I knew where I read that....

It's my understanding that mobile homes come with all of the responsibilities of homeownership but few of the benefits. It's also my understanding that the lot fee for a mobile home acts kind of like the HOA fee for a condo, and so is subject to increases, but these increases aren't typically as much as rent increases, so there is potentially some strategic value there. If you needed the space and could find a really good deal, it could work out very favorably. I've wondered about this myself. But as housing and rent goes up in price, so too does the cost of mobile homes, since so many people are then looking for these "cheaper" alternatives. Basically, you need to be savvy, not have plans to move it (and some rot into their lot), and, as mentioned, find a good deal.

As for the stigma, well, my pet theory is that it was created by the "NIMBYs" of the 1950s who saw mobile homes as a threat to the value of their traditional properties, and so a great deal of effort went into smearing the public image of mobile homes. But that's just my theory based on extremely limited research. I honestly suspect this stigma is why mobile homes generally depreciate in value. I've wanted to research these more, but most books on the subject are about investing in mobile home parks, and they strike me as kind of sketchy.

[ChickenStash]

I have close family and friends that went the mobile home route. Their experiences were generally positive but not without issues. I might do it if I wasn't planning on staying in it very long. I'd treat it more as living in an RV than a house or apartment.

The biggest issues they ran into were related to build quality. Mobile homes run the gamut on quality and on the low end they are pretty bad and the high end is still questionable compared to a moderate traditional build. Poor insulation, poor plumbing and electrical fixtures, mainly. They are built cheap and wear out fast. They aren't very sturdy so areas with high wind or snow loads can lead to structural issues or leaks. Repairs tend to be more challenging as a lot of the fixtures and appliances seem to be geared more for RVs than homes so the corner hardware store didn't always have parts in stock.

[monarda]

What other people have said here is important.

I can add that I lived in Boulder about 25 years ago. Many of my friends owned mobile homes and lived in them. Don't remember which park, exactly. Back then it was very reasonable- they were grad students in the music department. Their homes were even pretty nice. It was pretty short term for them, though. They all left and bought their own 'real' house or rented elsewhere. Not sure about rents for the land now, or the utilities cost, and how that compares to renting or owning in the other outskirts of Boulder.

[clarkfan1979]

As others have said, it matters if you own the land or rent the land. If you rent the land and pay a lot fee, it's a "hard no" for me.

[Askel]

One thing to consider is that in addition to the land rental thing, there's other aspects to mobile home economics that get kind of weird.   

The parents of a friend of mine owned some undeveloped property, planned to sell their current house, buy a mobile home, and live in it on site while building their new home on the property.

Turns out, buying a fairly new mobile home in decent shape was all but impossible because most people were completely upside down in them due to really crappy financing deals.  Their choices were pretty much buy new or buy one that was totally clapped out. 


 

[Rural]

I read a story many years ago about someone, possibly in the FIRE community, who bought a fixer-upper mobile home for super cheap and patched it up. Because it cost so little and I believe they did the work themselves, they got an excellent deal. They lived in it for years on the cheap, while saving up to buy a house outright, then actually sold the mobile home for a small profit because it was worth so little to begin with. I really wish I knew where I read that....

Our story is similar, bought land with a trailer on it and rehabbed it minimally to live in while building our house on the property. The mobile home was too old to sell even when we bought the land (could not legally be moved, not that it mattered since it did not have the structural integrity needed). It was worth it in our limited use case, but it was not a comfortable way to live in either cold or hot seasons.

[Aardvark]

Thanks for all these replies - very useful.
I might start a new thread in the property side of the forum, but if anybody is willing to help me think through how I should weight this up - I'd appreciate your thoughts on this specific "manufactured home"

https://www.zillow.com/homedetails/3003-Valmont-Rd-LOT-114-Boulder-CO-80301/2063147256_zpid/

[sonofsven]

Thanks for all these replies - very useful.
I might start a new thread in the property side of the forum, but if anybody is willing to help me think through how I should weight this up - I'd appreciate your thoughts on this specific "manufactured home"

https://www.zillow.com/homedetails/3003-Valmont-Rd-LOT-114-Boulder-CO-80301/2063147256_zpid/

Does that include the land the mobile sits on? It's unclear what the monthly hoa/lot fees are.
I've successfully purchased land with mobile homes just for the land and sold the mobile home for cash, and built spec houses on said land.
In fact, I'm constantly looking for them because the infrastructure (power water septic) is already in place and it reduces my building costs.
I wouldn't buy in a mobile home park, though, because of the ceiling on the potential worth of the property.

[PMJL34]

OP,

Your listing doesn't specify the cost of monthly "rent" and what protections it comes with (rent control). Without that, we can't help you.

My other question is: what is your alternative? How much does a 800sq ft 2 bed apartment cost to rent?

My guess is that it's cheaper to get the apartment and it will be muuuuuch simpler and easier. We've established that this mobile home will most likely not be a wealth builder.

Best of luck!

[aasdfadsf]

As for the stigma, well, my pet theory is that it was created by the "NIMBYs" of the 1950s who saw mobile homes as a threat to the value of their traditional properties, and so a great deal of effort went into smearing the public image of mobile homes. But that's just my theory based on extremely limited research. I honestly suspect this stigma is why mobile homes generally depreciate in value. I've wanted to research these more, but most books on the subject are about investing in mobile home parks, and they strike me as kind of sketchy.

It's an interesting theory, but where and when I grew up (deep south, 1980s), mobile homes were totally for the poor, and only for the poor. You were "trailer trash" if you lived in one. Some of that was race-based, but it was overwhelmingly poor white people (most black people of means by then had moved into middle-class neighborhoods, leaving behind the real poor ones), and anyone who lived in one was totally looked down upon as poor white trash or a black (you know the word) loser.

That should change. Not only is the stereotype itself bad, but there's no reason why mobile homes can't be real homes for people who need real homes. If NIMBYism is getting in the way, then to hell with those people.