Converting to Stick/Depreciation?

[Kay]

We're looking to buy HUD Modular home on a piece of property --- the house is on foundation with a partial basement and they attached a large two car garage. Our concern is that if it in theory lasts only 40-50 years--- is this a depreciating asset? Unlike a stick house?

Secondly, is there anyway to convert the modular structure so that it would be considered a stick property?

Thanks

[Bill Fry]

Sounds like a manufactured home if its HUD.You cannot convert it to any other type.
It will either go or down in value as its compared to similar homes in the area for its value.It will last as long as its taken care of,like any home.

[Eugene]

There is no such thing as a HUD Modular. It is a manufactured (mobile) home. A modular is built to state building codes, a HUD home is built to the HUD code.
Manufactured homes are like cars, the lose value over time. There is little you can do to stop that. A manufactured home is always a manufactured home.

[rmurray]

HUD homes..stick built homes..modular homes are like cars if you sell them like cars...By my house and move it away..

Sold as a package..HUD..Modular...stick built will all relate the same to the local real estate market...Resale becomes completely local...location..location...location..

If the local real estate market is appreciating (not all do)..Your HUD homes and land will appreciate..

[rmurray]

You have been advised by others here...there is no such thing as a HUD modular home...BUT...The estimated life that you have used is correct...AND..the same as used by appraisers on stick built homes as well.....All appraisals of used homes and real estate compare local property sales...and replacement cost of the structure (which has been going up faster than the depreciation for age..which makes the prices of long term structures rise with time..manufactured..modular..stick built all the same)....then they depreciate the home (manufactured..modular..or stick built) for its age...Ask any appraiser and they will explain this process to you..

Real estate appreciation has little to do with the structure on the lot..it is all location..location..location..If your location would appreciate with a stick home..it will appreciate with a HUD manufactured home..or a modular..

Better yet..if for some silly reason you want to sell the home and keep the land..your HUD code manufactured home will return many thousands more than a stick built..

[dave]

There is a great site with a recent extensive study of appreciation in manufactured housing at www.consumersunion.org/pdf/mh/Appreciation.pdf

[rmurray]

Wow...what an indepth study...The point is that apprciation and deprciation is a function of many varibles...And there is NO rule of thumb...

Thanks for the link..

[Art]

Eugene,

Put this in your pipe and smoke it (instead of that strange stuff you are smoking). Two years ago I paid $120,000 for a new MH on land with garage and other assorted goodies. Two days ago it went on the market for $230,000. I just spent 2 days in Southern Oregon looking for a new home and the MHs in the area we are looking at are selling for the same price as stick built homes. Yes, if you make the wrong moves a MH (or stick built) can depreciate. An yes, I am smiling all the way to the bank.

Art

[janie]

Art, aren't you in California? We all know prices there are nuts as well as S Oregon, as all the Californians are moving there. And on the market for $230K is not the same as actually selling it for that price, good luck.

[Art]

Janie,

I was responding to the statement made by Eugene that MHs lose value. He didn't say except for California, Florida, S. Oregon and other areas that MHs appreciate if placed on private land, he implied ALL MHs lose value.

You are correct. I could put it on the market for $1,000,000 but it would mean nothing. One of the reasons you use a realtor is to get a feel for what homes like mine are selling for and establish a price that will be attractive to buyers. Prices in my area are being driven up because empty land is disappearing and existing homes are now more desirable.

Art