Is a mobile home a good investment?
As a consumer, you are always faced with important decisions such as what to eat today, what kind of car to buy, where to buy a house, and what price is appropriate… mobile homes in San Jose, Sunnyvale, Fremont, Campbell, and Morgan Hill. Mobile homes in other cities not on the list above may not have the same effect as in San Jose. You should consult a real estate consultant in the area you want to buy.
First of all, what is the difference between mobile homes and manufactured homes?
The only difference is the date of manufacture. According to the Department of Housing and Urban Development (HUD), a mobile home built before July 15, 1976 is called a mobile home, but if manufactured after this date, it is called a manufactured home.
How are manufactured homes different from condos/townhouses and Single Family houses?
Mobile Home is personal property (for example, a car is a personal property.) A Mobile Home is not real estate, so when a mobile home owner buys a house, the person is considered a first-time home buyer and has incentives for first-time homebuyers regarding financing. Mobile Home is not real estate because you do not have title to the land on which your mobile home is located. You still have to pay the park owner to stay in their area.
Three reasons to buy mobile homes in San Jose:
1. Location: San Jose is located in the heart of Silicon Valley, where there are many tech companies. Not only favorable jobs, high wages, and many advancement opportunities in the information technology industry, San Jose is also home to many manufacturing companies, many professional, scientific and technical services, care services, health care, and social assistance, and many shop owners, and entrepreneurs. Where there is a job, that place needs a place to live. Demand for housing is higher than the readily supply. Single-family houses in San Jose increase in value, so do condos/townhouses and mobile home prices because everyone needs a place to live.
2. Affordability: If you’re currently paying $3,000/month in rent, that’s the equivalent of a monthly mobile home payment of about $300,000, plus a down payment of $80,000 – $100,000. When living in a mobile home, you have more privacy than in a rented home. Depending on the sale, you can still make a profit. In recent years, many mobile home-owners have sold for $350,000 for a San Jose mobile home, enough to pay for most of a $450,000 home in Sacramento. Buying a mobile home is for living, not an investment channel, so you should not worry about whether the house will increase or not. Even so, the value of mobile homes have increased over the past 10 years, matching the growth of real estate. It’s a blessing for reason #1. I know some homeowners who bought mobile homes in 2012 for $35,000-45,000, remodeled, stayed for 10 years and sold for $300,000-$350,000 or more in 2022, 2023.
3. Park community:
It’s important to choose the right park. Beautiful, clean parks like Chateau La Salle are well cared for and have a gatekeeper after 5 pm. Parks with narrow roads are difficult to park and not well taken care of, affecting the value when re-selling. Houses installed after 2000 or newly repaired have high ceilings. You can’t tell if the home is a mobile home from looking at the kitchens, bathrooms, and bedrooms in the pictures. Living in a spacious, clean park and your mobile home is lovely and beautiful will give you an appreciation of life just like anyone else.
Here are three reasons not to buy mobile homes:
1. Space rent increases every year: Land rent for mobile home parking will increase by 3%-7% per year. If you buy a mobile home and the land is $1,600/month, 8 years later, it’s about $2,026/month. In fact, even if you pay off your single-family mortgage, you still pay land tax every month for the rest of your life. If the value of a single-family house is $1,200,000, the land tax is also about $1,200/month. Calculating back and forth, the land rental fee for a mobile home is also equivalent to the land tax if your starting land rent price is about $ 1,200/month.
2. Strict regulations of Park and HCD: Living in any community, there are rules and regulations to follow. Some parks have very strict rules. For example, Vietnamese tend to leave their shoes in front of the door to keep the house clean, but the park (unnamed) bans that practice. They will tow your car if it is parked on the street unattended. Flowers are allowed to be planted in the ground, but only in pots. In return, this park is very clean and neat because there are cars parked on the streets and no large trees to trim. Moreover, the California Department of Housing and Community Development (HCD) in Sacramento manages mobile homes in northern California. Any alteration or repairs to the house’s structure require the approval of the park and HCD. But the same goes for single-family homes, if you move walls or change the structure of the house, you also need permits from the city. At townhouses/condos, there is a Declaration of Covenants, Conditions, and Restrictions (CC&R) of the Homeowners Association (HOA) to follow. Therefore, everywhere must follow the law there; mobile home parks are no exception.
3. Prejudice: This is just an objective reason. I have joined many community Facebook groups and have seen some people despise questions related to mobile homes because they think mobile homes are for low-income people who lack education. Did you know that a lot of Google engineers buy mobile homes in Sunnyvale, near Google’s headquarters, to save on housing costs? In general, pleasing everyone only makes you tired. Having a peaceful place to live is a blessing. If you have a big house, you should show compassion for those who don’t have what you have. Be respectful of others and do not judge a person by their living situation. Besides, the price of a mobile home now is no longer inexpensive at all. The mobile home at 132 Chateau La Salle Drive, San Jose 95111, is beautiful, brand new, made in 2022, asking price of $569,900, and rent space is $ 1506 / month. With that money, you can buy a mansion in Houston, Texas. That is why location is the most important factor when buying a home.
If you are the owner of a mobile home, please let us know why you decided to buy a mobile home under the comments section.
If you are thinking about buying a mobile home but are hesitant, you should do the math to see if a mobile home is a right choice for you.
In the end, what to eat tonight, what car to buy, and whether to buy a mobile home or not is a personal choice. Life is a choice every day. Choose right and live happily. The wrong choice can still be made again. Hope you are wise in your decision.