Is A Manufactured Home Community Right For You?

Allen Robie

Don’t be put off by erroneous perceptions...these communities have plenty to offer.

Posted February 28, 2013

By Allen Robie

Many men, women, and couples entering retirement find themselves in an unfamiliar situation: downsizing their lives. For those looking into moving to an active retirement community, that usually takes the form of finding a new home that is smaller, easier to maintain, designed to meet their needs, and—perhaps most important—less expensive. And many of those people find themselves in another unfamiliar situation, because a large proportion of retirement communities are based around manufactured homes.

Those whose ideas of manufactured homes are based on the single-wide “mobile homes” they knew from the 1970s are in for a shock: modern manufactured homes are less expensive, very well-built, and often—unless you know what to look for—can be indistinguishable from site-built homes.

Similarly, manufactured home communities have suffered an undeserved reputation based on conditions common a half a century ago. When it comes to 55+ communities, nothing could be further from the truth: these communities are carefully planned to be at once affordable and enjoyable for the people who buy into them. These ain’t your father’s “mobile home parks.”

There are many more important factors than the type of housing, and you shouldn’t attempt to judge the community by a single factor. But since we’re concerned here with this single factor—site-built vs. manufactured homes—let’s consider it in depth. What are the disadvantages of buying into a community of manufactured homes, and are there any advantages?

As for the disadvantages: many of the most important ones are a matter of opinion—often misinformed opinion. For instance, many people are under the impression that site-built homes hold their value and manufactured homes don’t—that they appreciate, while manufactured homes depreciate. This is actually not true: home prices for manufactured homes do go up, even for pre-owned homes, but they appreciate at slower rates. (And much of that difference is itself perception-driven: the demand for pre-owned manufactured homes is less than for site-built homes.) And actually, this can be one of the biggest advantages, if you’re a buyer.

Aren’t manufactured homes less safe than site-built ones? Again, many people will unhesitatingly answer “yes,” and they’d be wrong. At one time, standards for manufactured homes were lower than they are now; but if you’re buying a good-quality new home, or a recently-manufactured pre-owned home, you can do so in perfect confidence, because modern manufactured homes are in some ways more safe than site-built ones. Manufactured homes must be built to conform to Federal standards (the “HUD code”) that are more stringent than the local and state codes that govern site-built homes.

The biggest potential disadvantage, though, is that it can be more difficult to get financing for manufactured homes, especially pre-owned ones, and so interest rates can be higher. Even this, though, will be in large part conditioned by your own credit history; and generally speaking retiring couples have less trouble finding a decent mortgage rate than young, first-time home-buyers.

Now: what are the advantages? First and foremost, cost. Manufactured homes tend to cost significantly less than site-built homes—as much as two-thirds less for comparable size and amenities. That’s in large part due to the cost-savings inherent in mass-production—imagine how much a car would cost if a team of builders came to your home and built it in your garage! Yet the factory product is in every way comparable to the custom-built product.

Associated costs also tend to be less. Local property taxes, for instance. Repairs are often less expensive, since there are often manufactured modules than can replace damaged ones, just like changing out parts on a car. This same flexibility allows you to install upgrades in your home at a fraction of the cost of renovations to site-built homes.

There is another factor which is important, but difficult to establish precisely: the “what might have been” factor. Manufactured homes are much less expensive to install; and an entire community of manufactured homes gives a developer more leeway to use his capital in other ways: to provide better infrastructure, such as streets and lighting, or faster Internet service, or a larger community clubhouse with more amenities. Such is not necessarily the case...but it could be, and those who buy into a community of site-built homes should ask themselves what the community might have had if the building costs hadn’t taken up so much of the investment capital. Those buying into a manufactured home community can ask the opposite question: how much more might they enjoy because they bought into a community that made community-wide amenities the priority, rather than expensive luxury homes?