To Be or Not To Be---What is an investment?

November 19, 2018

 

 

Advice.  It’s out there in abundance.  You can seek it, it can be given when you aren’t asking and it can be wrong.  So how do you determine what is best for you?  Start by looking at your goals.  

If your goal is to own a mobile or manufactured home, then so be it.  That is your goal.  But if your goal is to invest in a mobile or manufactured home, there might be more conversation needed.

 

It is no secret that famous money guru Dave Ramsey (and others) don’t see the purchase of a mobile home as an investment.  That is based on definition alone.  An investment is supposed to grow.  If it depreciates over time, it can’t be an investment.  There is no passion or personal choice—it’s a mathematical statement.

 

But, here you are ready to make one of the most important decisions of your life—buying a new home.  What advice do you seek?  How do you decide if a manufactured home is right for you?  That goes back to your goals.

As with any major purchase, you should ‘invest’ time to figure out what is best for your situation.  Think of the following key points as it relates to your lifestyle and needs when deciding on purchasing a mobile home.

 

  1. How long do you want to be there—what is life like now and in the future

  2. Site built, modular or factory built

  3. Single wide or double wide

  4. Where do you plan to put the home

  5. How much living space do you need

 

But most importantly, and Dave would agree, you should think about your budget honestly and thoroughly.  Keep in mind that a monthly mortgage payment should never exceed 25% of your monthly gross income.

After all the time and energy spent on the above, you decide that a manufacture home is right for you. 

 

Do you consider it an investment? Recent studies have shown that when attached to the property (i.e no wheels), a manufactured home can gain equity.  There are also two situations where buying a mobile home makes financial sense.

 

  1. Buying an older model on land –while the home depreciates, land usually appreciates and you could be making a sound investment in real estate.

  2. With a lower purchase price/payment, you could save for a site built traditional home faster and use this mobile home as rental income.

 

But even if your home doesn’t increase in value or won’t bring you rental income, choosing to live there can still be a smart choice.

Manufactured homes are a solid alternative to renting.  Millions of families have seized the opportunity to own a beautiful home at a price they could actually afford.  Mobile and manufactured homes are usually a fraction of traditional homes and can provide you privacy that you would not have in an apartment.  Yes, dreaming of a ‘mcmansion’ is nice, but so is not being held hostage by your mortgage.

 

Buying a mobile home will make sense to you if you take the time to look at your goals—both personally and financially.  Spending a little effort up front is part of the investment!

 

 

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