Pros and cons of buying a manufactured home on the Oregon coast

By
Real Estate Agent with ADVANTAGE REAL ESTATE, serving Lincoln County 200509394

water intrusion

Manufactured homes are a great option when you need more space for less money. However, (The cons!) they tend to deteriorate much faster than a site built home if not properly maintained. One of the most common problems I see is a leaky roof near bathroom vents. The rainy weather on the Oregon coast can be particularly hard on a manufactured home in Newport, Oregon. The home pictured above is a 1978 foreclosure which will likely need to be removed from lot at a cost of $10,000 for disposal. The lot will increase in value if returned to buildable bare land, in this case.

We have quite a few older manufactured homes in the Lincoln County area, with very low prices on them. These lower priced homes are often cash only, or owner carry sales because buyers cannot find a lender who will finance them if built prior to June 1976. 

I asked a lender, "Why are the finance costs higher on a manufactured?" He told me that the materials used for the walls, floors and ceilings and foundation are not as durable as a framed house and the lenders consider them a higher lending risk, particularly as the home gets older. 

When buying a manufactured, it is important to keep in mind that the home will not appreciate in value the same way that a site built home will, and that in years to come, the resale may be more difficult due to the higher lending fees to finance the home as it ages.  

The pros: One level living and the layout of manufactured homes are generally well thought out, comfortable spaces. A manufactured can be placed on a lot relatively easily, with more square footage and bathrooms.  If someone wants horse property, or, lets say a farm dwelling out in the Siletz, Logsden, Beaver Creek or Otis areas, manufactured homes can deliver a dream of having acreage for a fraction of the cost.  Some manufactured homes companies offer thier own financing for the structure itself, however, the buyer must have cash or find financing for the bare land. The bare land would need city services or septic approval and zoning that allows for a manufactured home.  

Manufactured homes can still be a great investment!

If buying a manufactured to use as an investment rental property, the larger square footage can bring a higher monthly rental amount. I have seen manufactureds of any age located near Newport, Oregon "pencil" quite nicely in this regard. For instance, a cash purchase of an 1800 square foot manufactured for $80,000 with a monthly rent of $1000.00 a month will pay for itself in about 8 years, with a $12000.00 yearly income thereafter. Just remember to use some of that income to maintain the roof!

 

 

Posted by

Your Coastal Realtor in Oregon

Comments (1)

Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Barbara -- I have no experience in selling manufactured homes --- but I have heard many of the negative aspects you mention in your post.   As in any real estate investment, owners need to be mindful of maintenance issues and address them accordingly.  

Jul 08, 2014 08:32 AM

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