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    The Advantage to Buying a Mobile Home vs. Renting

    4 years ago · · Comments Off on The Advantage to Buying a Mobile Home vs. Renting

    The Advantage to Buying a Mobile Home vs. Renting

    Justin Becker

    Updated: January 10, 2023

    There is no denying that what is manufactured housing is the most affordable housing option these days, especially if you are looking for top-notch communal amenities and a possible path to home ownership.

    That said, there is still an ongoing debate as to whether one should buy or rent a manufactured home. Yet, the truth is only you can decide for yourself which is the better option overall.

    Prefab Homes Michigan renting an apartment one bedroom

    Nevertheless, if you are comparing the total cost of purchasing manufactured homes to renting them, then you are probably wondering if the old adage is true — “renting mobile homes is more affordable and cost-effective in the long run.”

    Advantage to Buying a Mobile Home vs. Renting

    Well, the good news is you have come to the right place. Here is a quick overview of the pros and cons of owning and renting a manufactured home.

    Monthly Costs

    In general, no matter if it’s what is a double-wide manufactured home or a single-wide, living in a mobile home comes with monthly costs and expenses.

    For instance, regardless of whether you are renting or you have purchased a manufactured home, you always need to pay for things, like utilities, trash removal, heat, air, and so on. Learn about exactly what utilities you pay in a mobile home here.

    As a result, when comparing the costs associated with owning and renting mobile homes, there is really no difference.

    Typically, most people either rent mobile homes in a mobile home community/park, or they purchase mobile homes within the park/community. Consequently, the monthly expenses are the same.

    If you have purchased a manufactured home and are currently leasing a piece of land in a manufactured home community, then you are likely paying a lot rent. However, lot rent, in most cases, is only a few hundred dollars a month. Find out what is the lot rent for a mobile home park here.

    Moreover, when you combine the monthly cost of renting the real estate with your mortgage payments, then you are still probably paying about the same as many people renting their mobile homes.

    In contrast, renting a manufactured home in a mobile home park means your rent is high enough to cover, or include the cost of, the monthly rent for the piece of land the home sits on, which is similar to renting an apartment.

    Maintenance & Upkeep

    In terms of maintenance and upkeep, things do get a little tricky.

    Again, if you have purchased a manufactured home and live within a mobile home park, then there are certain maintenance matters that you will not be expected to handle, like upkeeping any communal features.

    That said, any issues with your actual mobile house, you can pretty much expect to be responsible for it as the homeowner.

    If you are renting a manufactured home, on the other hand, then you also have certain property maintenance that is handled by the mobile home community management team and staff, similar to renting an apartment.

    However, any necessary repairs or major appliances needing to be replaced are likely the responsibility of your landlord/the owner of the mobile home you are renting, unless you have agreed otherwise. Checkout these manufactured home maintenance tips to help.

    Mortgage vs. Rent

    Where you will notice a significant difference in owning a manufactured home vs. renting one is when you look at the costs associated with having a mortgage compared to monthly rent payments.

    Today’s mobile homes are fairly affordable. Consequently, you do not need lender funding or chattel financing, if you have the money on hand.

    That said, if you do need to finance your mobile house, the good news is that you will not need as large of a mortgage as you would if you were considering or trying to purchase traditional stick-built homes. See our mobile home vs. stick-built guide for more details.

    In fact, monthly mortgage payments for manufactured homes are fairly small/if not almost nominal. Some mobile home owners pay less than $500 a month for their mortgage.

    Of course, in order to have such an affordable mortgage, the homeowner likely put down a fairly large down payment. Even if this is the case in your situation, mobile home mortgages are for shorter terms and, therefore, are less of a financial burden or obligation.

    Obviously, for home buyers, when it comes to manufactured home financing, you will have to account for various fees, appraisal costs, credit checks, homeowner insurance, taxes, and so on. Generally, however, you can roll any expenses associated with your mortgage into the amount of funding you are requesting.

    Alternatively, when renting manufactured homes, you have your standard expenses and fees that come with it.

    For example, you can expect to likely have to pay upfront costs that include first and last months’ rent, a security deposit, an application fee, a pet deposit (if you have pets – be sure to check the mobile home community pet policy), renters insurance, and even possible parking fees. This is the same even if you rent an apartment. Checkout our guide on manufactured homes vs. apartments here.

    After you have paid all these upfront costs; then, you need to pay your monthly rent. Here, if you are late on your rent payments, then there are fees associated with late payment.

    Cost Over Time

    When looking at the two scenarios long-term, it becomes very clear that you will likely be spending more money when you rent mobile homes.

    As briefly touched upon, a fixed mortgage rate, for less than 30 years, will not increase or change. However, rent, even for a one bedroom apartment, tends to go up every year.

    In addition to possible increases in required payments, renters of mobile homes, similar to renting an apartment, typically do not get homeowner tax breaks or benefits. Moreover, as time passes, the mobile homeowner is likely to get some form of home equity and is working towards actual ownership.

    This greatly affects the cost of owning a manufactured home overtime, because when it is all said and done, you can sell your mobile home and recoup a good portion of the money you put into it.

    In contrast, the person renting a manufactured home is not building or accumulating any sort of home equity. Furthermore, they are also not going to be able to recoup any possible monies they have invested in maintaining or improving their mobile home. Learn if buying a manufactured home is a good investment here.

    Ultimately, because of these differences, if you will, in the long run, buying a mobile home is the more cost-efficient option.

    Equity vs. Flexibility

    As briefly mentioned:

    When buying a mobile home, there is an opportunity to accumulate equity.

    If you bought the real estate that your mobile home is affixed to or sits on, then your manufactured home is actually appreciating in value as time passes. Learn more on how to increase the value of a manufactured home here.

    Be that as it may, one of the downsides to owning a home here is the lack of flexibility. In other words, the people that reside in mobile homes for rent, just like renting an apartment, can wake up one morning and decide they essentially want to live somewhere else. In this instance, the renter or tenant may have to pay a nominal fee for breaking their lease, and then they can essentially drive off into the sunset.

    On the other hand, owners of mobile homes have to list their property for sale, possibly hire a real estate agent to help, and do a variety of other things that may cut into their bottom line. However, mobile homeowners can also relocate their mobile home, if they so choose. Learn how much it costs to move a manufactured home here.

    The Clear Winner

    At the end of the day, these are just a few pros and cons associated with owning manufactured homes vs. renting.

    That said, though renting may not have the same long-term financial benefits, sometimes the monthly costs or down payment to purchase manufactured homes is simply too much, and, therefore, renting an apartment or mobile home appears to be the better option.

    Ultimately, if you are looking for a clear winner here, it is probably still better buying a mobile home.

    Of course, only you can determine if the costs associated with mobile homeownership are within your budget. Nevertheless, homeownership of any kind still appears to be the better option vs. renting.

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    About The Author

    Justin Becker is a property owner in the state of Michigan and has a passion for managing communities. He owns both apartment complexes and mobile home communities and has been writing his own blogs for his properties for several years.

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