When you make a living investing in real estate, it's important to choose the right properties for your portfolio. Not only should you focus on properties with strong rental income potential but also try to favor those with a tendency to appreciate in value over time.
But where do manufactured homes fit into that equation? Though they can be fairly inexpensive to buy, some investors might worry about their quality and longevity.
So how long do manufactured homes last? Let's dive in.
What's a manufactured home, anyway?
Some people use the terms "mobile home" and "manufactured home" interchangeably, and that's not completely wrong. Prior to 1976, manufactured homes were, in fact, known as mobile homes, but that terminology was adjusted that year when the Department of Housing and Urban Development (HUD) implemented changes and updated its construction standards for these homes.
You'll still hear the term mobile home used frequently, but technically, the correct term is either "manufactured home" or "modular home."
With all that name talk out of the way, a manufactured home is constructed in a factory and then transported to a building site. These prefabricated houses are often indistinguishable from site-built homes, and they're generally not moved to a second location.
How much does a manufactured home cost?
A new manufactured home sells for an average price of $73,000, but that doesn't include land. The average site-built home, on the other hand, goes for $372,000. So there are major upfront savings with manufactured housing.
Why is a manufactured home so much cheaper? Aside from saving on land costs, modern manufactured homes are put together in factory environments, where builders can control every aspect of the construction process.
A manufactured or modular home will generally be built of standard, cost-effective materials, and construction takes place in an indoor environment, preventing damaged materials and weather-related delays. Also, manufactured housing is constructed in bulk, saving money on building materials.