Posted on 11/22/2011 8:41:51 AM PST by Kaslin
Dear Dave,
I’ve heard you tell people not to buy mobile homes. We bought one when we moved out of our apartment, and it’s been much cheaper for us. Why do you feel this way?
Debbie
Dear Debbie,
It’s simple. Mobile homes go down in value. When you buy a house, it goes up in value in the long run. From a financial standpoint, mathematically, when you buy a mobile home, you’re buying a very large car in which to live.
Now, I’m not necessarily against manufactured homes. But the phrase “manufactured home” can mean different things to different people. My test goes something like this: If it’s a type of housing that doesn’t look like it had the wheels yanked off, then it will probably go up in value over the years.
There’s nothing wrong with renting an apartment for a while. When you pay out rent, that’s all you’re losing in the deal. But when you buy a mobile home, you’re losing out with the payments and you’re losing money every day as the thing goes down in value.
That’s why I tell people not to buy mobile homes!
—Dave
Dear Dave,
My stepdaughter is 17 and will be starting college this fall. Her dad and I want to help her with expenses, but she’s chosen a private university (with the help of her other parents) that costs $250,000 for an undergraduate degree. We don’t want her going into student loan debt, but we can’t afford that kind of money, and she’s really pressing the issue. What do you suggest?
Christina
Dear Christina,
The biggest problem I see is that you’ve got a 17-year-old girl wagging the dog. I can tell you right now this wouldn’t happen at my house. When it comes to the parent-child relationship at that age, the adults tell the children what to do. It doesn’t happen the other way around.
If this child is going to take your money, then she needs to take your advice too. If she’s not willing to be reasonable and take your advice, then she gets none of the money. There’s no undergraduate degree on the planet worth $250,000. The whole idea is absurd, and somebody needs to say that out loud.
This girl can work, and she can go to a state school and get a great education for about a fourth of that price. Since you’re in Texas, there’s absolutely nothing wrong with the University of Texas or Texas A&M. They’re great schools. And at that price range, I’m sure it would allow you guys to pitch in and help out some.
But seriously, a quarter of a million dollars for an undergrad degree? I don’t think so!
—Dave
“When you buy a house, it goes up in value in the long run.”
He must be thinking of a vry long run...
It’s good advice, but only if you feel the future economic situation will be stable. Not many are feeling that way. If you have the ability to own mobile shelter, it may be a better investment than he thinks.
Dave, dear Dave; tune in, please. As a 30-year Real Estate professional, I will verify that mobile homes decrease in value just like an automobile. But, YOU CAN SELL THEM! Currently, the finest homes ARE NOT SELLING unless you live in Dave Ramseys’ dreamland, and no one knows when this will change. Those that do will not appraise for much more than 80% of original value under the best of circumstances. Most of us are lucky if we can just hold on to our homes. You, of course, made all the right decisions and have nothing but disdain for those of us who didn’t. Please; you’ve become boring. The system doesn’t provide us those mega-dollars to start over on; at least not today. And, I’m not and ‘occupier’; just a guy who spends all day, every day, looking for a job!
The line has been blurred between mobile homes and stick built homes, with ‘manufactured’ homes, on permanent foundations...and even basements.
I did work for a housing developer who did an entire development with manufactured homes - no problems. Then HUD and FHA changed their rules...no HUD financing option for buyers, had to go back to stick built.
Anyway, I like manufactured homes, and have no problem with them. However, a large segment of potential buyers have been peeled away - so their value may not grow at the same pace of stick built.
The line has been blurred between mobile homes and stick built homes, with ‘manufactured’ homes, on permanent foundations...and even basements.
I did work for a housing developer who did an entire development with manufactured homes - no problems. Then HUD and FHA changed their rules...no HUD financing option for buyers, had to go back to stick built.
Anyway, I like manufactured homes, and have no problem with them. However, a large segment of potential buyers have been peeled away - so their value may not grow at the same pace of stick built.
Dave missed a very important point. If the mobile home goes down in value, why not buy a USED mobile home? I know some selling a very well maintained one with low miles for $8K. Cheaper than rent in the not so long run.
If I lost my house I would live in a mobile home on a few acres before I would go back to an apartment.
I hate living on top of, below and next to other people.
But yes, it’s not true real estate even if you secure it to a foundation.
$250,000 for an undergraduate degree!?!?!?!?!
Exactly. My nephew bought a used one for like $5k... cheaper than a car, will work out about the same as paying rent over the long run. But when he has saved up enough to buy a stick built home he can sell the mh and use whatever he gets for that to help buy furniture.
Heck - I bought a nice doublewide in a “posh” San Jose neighborhood for $65K (yup - that’s right) in 1986. Sold it 9 months later when my assignment was up - for $72K!!!
Single bedroom apartments were renting for $1200/month - it was a no-brainer.
Sarah Lawrence is said by Forbes to be the most expensive school in the entire country, and the full freight (tuition, board, books, etc.) is "only" $58K a year. Not even $240K. And much of the expense is because it's located in New York City.
Oddly enough, except for the University of Chicago, none of the most expensive schools are on the "best" lists. In many cases they are specialty schools such as arts schools, or finishing schools for wealthy young ladies (I'm sorry, I know it's co-ed, but that's what Sarah Lawrence still says to me.)
My daughter went to a top flight, but still MUCH less expensive, private Presbyterian college.
I wonder what preppers think of buying a motor home.... If the SHTF you can always change locations with a motor home. Plus, it’s relatively easy to maintain, compared to a house.
I bought a manufactured home in 2005, with the expectation/hope that it WOULD decrease in value as I’m on a fixed income and don’t want to be squeezed out by rising property taxes “because the value has increased” (bad enough it will increase via rising state costs). That was the reason I bailed out of my stick-built retirement home as the price almost doubled in five years and the taxes were rising accordingly.
My boy in PA, around Allentown, was renting at $1,800 a month - nothing that wasn’t a slum was renting for anything less. He bought a used mobile/manufactured home in a development for $15,000 cash, fixed up a few things, and is paying $650 a month park rental and pocketing the difference. If, years down the line, things get better, he plans on paying cash for a stick built. (I think by then, he’ll prefer the manufactured homes).
As others have said, they are not a bad deal if bought used. In these uncertain times it may even be advisable for a couple to buy a used RV, stay in a park, and be a lot more ready to move to were the jobs are if theirs go belly up and there’s nothing else locally.
^^Then again, where would you put all your stock piles of food, etc. Darn.
Possibly they are looking at the anticipated inflation of costs. Many universities are raising costs at a rate of 9-12% per year these days. If she’s 17 now, the senior year might be 5-6 years out.
It is not the mobile home itself. If one takes care of it, just like anything else the resale value can be good. Plus it will look great both inside and out.
It is they type of people who live in them, and trailer parks. Two words “white trash”. Not to generalize here, but trailer parks are nothing but a white trash ghetto that I hope to never see again for the rest of my life!
The person is talking about motor home not mobile home. I actually can see savings if the motor home is payed for. The Money saved on electricity, taxes, upkeep, and mortgage would add up really fast. All the interest you give to the mortgage company going into your account is much better than the amount your house will go up. IMO.
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