Depreciation

[Roger]

I am looking at a MH built in 2001 for $40,000. What can I expect for depreciation on this?

[Jim Chesky]

Depreciation depends on a few things. How the homes condition is (when sold vs. when purchased), how long you plan on keeping this home, the size of the home (If you are buying a 14x70 for $40,000. it will lose more value than a 28x60). Does land come with the price, or is the home in a mobile home community (will the home have to be moved when sold). The location of the MH is probably the biggest factor in determining depreciation. A $40,000. MH or almost any price range MH, will lose more value in certain areas of the country than others, in some areas the MH will increase in value. If the $40,000 MH is in an area where all of the other homes in that area are only worth an average of $20,000. then it will lose a lot of value, pretty quickly. If that same home is in an area of much more expensive homes, then it won't depreciate as fast or at all. Check with your local real estate people.

[David Oxhandler]

Jim is right.

The resale value of ANY structure boils down to 2 factors.

1 - Location

2 - Condition

[David Oxhandler]

MHI has put up a great page on this subject. Check it out at www.manufacturedhousing.org/understandi ... _value.htm

They say:

"Do manufactured homes appreciate in value?

In general, manufactured homes will appreciate. But, as with all housing, it is subject to the same market factors which affect appreciation. The factors that impact future value include:

• the housing market in which the home is located;

• the community in which the home is located;

• the initial price paid for the home;

• the age and maintenance of the home;

• the inflation rate;

• the availability and cost of community sites, which reflects the supply and demand influences on the home’s value; and

• the extent of an organized resale network, where an organized network will usually result in homes selling for a higher price than in markets without such an organized network."