Hello everyone and Welcome to another episode of Selling Greenville your favorite real estate podcast here in the upstate of South Carolina I'm your host as always Stan McCune realtor right here in the greater Greenville area of South Carolina and you can find all of my contact information in the show notes as always please just a reminder if you love this show or if you just like it please go ahead and subscribe make sure you don't miss any future episodes on whatever podcast app that you like please go ahead and leave a festar rating click to leave a short little review I'd appreciate any of those things you guys can do to show your support for the show today we're going to do a hopefully quick little episode on mobile homes there are a lot of misconceptions about mobile homes and I I do want to clarify we're not going to really be talking about mobile home Parks this is going to be specifically an episode about mobile homes that are used as a single family residence people that are purchasing a mobile home that they intend to live in and potentially it could apply to people that purchase a single mobile home to live in and then they convert to a rental as well that that certainly can apply as well although that is a little bit lesser of less we don't see that happen very very often let me say it that way most people are more focused on mobile home parks if they're planning to rent out a mobile home U but the primary thing that I want to discuss with regard to mobile homes is there is a statement that you hear people make all the time and it's a statement that has some truth but is also a little bit misleading it doesn't tell the full truth and the statement is that mobile homes do not appreciate in value they don't go up in value in fact I've heard the flip side mobile homes go down in value they depreciate in value now why is that the case why do people say that well it stems from the or how a mobile home originates a mobile home technically begins as a motor vehicle when it's first built it actually has wheels tires all of that and it comes with a title from the DMV so for legal purposes and a lot of practical purposes it is considered to be a motor vehicle and we all know that Vehicles do depreciate in value right if you buy a car you know I'm I'm about to purchase a vehicle hopefully soon been waiting for a while for it to to get built and all of that because I'm buying something new because there's like no used vehicle inventory out there but if you purchase a vehicle you get a bunch of wearing and tear on it you're going to sell it years later for much less than what you paid for that is just the way it works so I'm going to be selling the vehicle that I'm currently driving and when I sell it I'm going to get much less for it than what I purchased it for that we all know that that's how it works well mobile homes start out as motor vehicles and so they're subject to a little bit of that but unlike traditional Vehicles mobile homes have the option of being permanently attached to land and so and that's usually what people do right they don't usually keep them on the wheels and drive them around everywhere if you're if you want to do something like that it's much more convenient to purchase an RV particularly double wide mobile homes I mean those things are massive and and you're not even allowed to to drive those on every major highway so it it's much easier if you're going to stay mobile just get an RV we all know that that's obvious but when a mobile home has been permanently attached to land it doesn't have the same kind of normal wear and tear that most motor vehicles have the wear and tear to engines and transmissions and control arms and shocks tires all of these different things so that's something to keep in mind we'll come back to that here in a second now let me just explain because I I have a very wide audience here and it it might not be particularly clear like like how all this works in terms of getting a mobile home to be converted from a motor vehicle into a not motor vehicle so I'm just going to take a moment to explain this to put the mobile home on land you obviously have to take it off the vehicle off the wheels rather and then put it on a permanent foundation the the foundations for mobile homes they're very different than the foundations for stick Built Homes and by the way stick built home if you're not familiar with that terminology that is a terminology we use for normal homes that are framed with Lumber and that are then built from the outside in like that on typically like 99% of the time on site mobile homes are built offsite and then assembled on on site and so you'll hear me he hear me my gosh you can tell it's Monday when I'm recording this I can't even talk you will hear me refer to stick Built Homes that is traditionally the terminology we use to refer to a home that is built on site versus a modular or mobile home that is built off site then transported and then reassembled on site all right so to put a mobile home on land you have to put it on that permanent foundation and then there are some extra requirements that must be fulfilled if you want to finance the mobile home itself or sell it to someone that needs financing and there's a lot I'm not going to get into all the weeds with with all that goes into this an engineer has to look at it all that kind of stuff but one of the primary things that needs to happen is the mobile home has to be detitled okay what that means is that all these various steps have to be taken in order for the DMV to declassify the home as a motor vehicle and it removes that motor vehicle title from the mobile home until that's done from a tax and A lender financer standpoint the home is still considered a motor vehicle once it is detitled and at that point it is now permanently a fixed two land then it is considered a real estate Improvement and usually what happens at that point is then property tax records for that land get adjusted so that that land is no longer deemed vacant land but it's given a different type of use such as perhaps mobile home on land that really depends on what county you're in and what the zoning codes are used and whatnot not going to get into all the weeds on that but the point is that at that point now it's considered a part of the land it is considered actual real estate at that point however because mobile homes are not built with as high quality materials as traditional stick Built Homes and because they start their lives as Vehicles people frequently state that they lose value over the years now I've already alluded to the fact that mobile homes don't have the same wear and tear as other vehicles and that and that's a very important consideration when you're using the car logic to apply to mobile homes you have to be careful they are not cars right they might start as motor vehicles but they are not cars that is a very important distinction and if you're going to make the argument that they depreciate in value you have to at least account for the fact that they don't appreciate in value or depreciate in value rather at the same rate as a car as a normal vehicle that has an engine and a transmission all these other things that are getting wear and tear that are basically causing the the slow death of the vehicle right I have seen some very old mobile homes that have been kept up with you obviously you can see some old vehicles that have been kept up with but it it's only after they have had new transmissions new engines all these different things that that have to to happen in order to keep an old car running to keep an old mobile home upright and functioning as a roof over someone's head you have to do a lot of the same things that just normal homeowners have to do for a normal stick built home all that to said there is a more important consideration when you're talking about the the mobile home depreciation myth which I'm going to call it because I I don't like the idea that I've heard from some people that are you know mobile homes they they just go down in value it it is not completely factual it's it's more myth than fact and and this is why a mobile home that's on a permanent foundation and is a is detitled and is now considered a part of the land that land does appreciate and value not only that but land with a livable structure on it including a mobile home appreciates in value at a more rapid Pace than vacant land so here is the way to think about it a mobile home by itself right just a strict mobile home and I see this sometimes I see occasionally people will just they're selling a mobile home it's not attached to any land or maybe it is attached to land but they need to to get it to go you know they're wanting to develop the land they're wanting to put a stick belt home on it whatever the case may be just a plain old mobile home by itself without any land you can expect that to depreciate in value that is where the myth is factual the mobile home by itself does technically not appreciate in value and I think you can make a good argument that that it does depreciate in value in that instance now what about vacant land there's no structure at all on it vacant land does appreciate in value but it does so slowly vacant land does not appreciate in value as quickly as land that has a livable structure on it land with a mobile home and and by the way when I'm saying land I'm not specifically meaning any size or I'm not saying that it needs to be acres and acres of land could just be a lot but I'm Loosely referring to it as land land with a mobile home on it will go up in value at a quicker Pace than vacant land because it has more utility than vacant land vacant land obviously has flexibility you can use it in a lot of different ways but there has to be improvements made to the land in order to get there whereas land that has a mobile home on it it already has improvements made it already has some source of water and sewer it already has a place where somebody can live it has more utility a and having a house whether it's a mobile home or a stick built house that's one of the highest and best uses of Real Estate so that increases the value of the land even if the mobile home itself doesn't necessarily increase in value the land that it's on now increases in value at a quicker Pace than vacant land does and so you can make the argument it might not be a precise argument and and you know I know that people would would fight with me over it so I'm not making this argument but you could make the argument that because of the Mobile H home's value that it adds to the land that the mobile home actually does appreciate and value when it is detitled and a fixed to land that is a little bit in the weeds in terms of you know splitting hairs on on what's going up and what's going down in value but that's just something to keep in mind and that's why I think that there are a lot of myths that go around with regard to mobile homes and what happens with their value now of course we know that land that has a normal stick belt house on it that's going to appreciate and value at a faster Pace than land that has a permanent foundation mobile home on it that's detitled we we know that I'm not making the argument that mobile homes appreciate at the same rate as stick Built Homes no that we know that that's not true for the reasons I've already articulated they are not as well built as stick Built Homes we we all know that but at the end of the day if you're buying a mobile home on land today for let's just say $100,000 should you expect it a few years from now to be $90,000 no you shouldn't expect that is it possible it's always possible the economy could crash tomorrow and everyone's real estate goes down in value stick build or not but at the current pace of real estate in the upstate generally speaking we see mobile homes going up in value now I've already said that mobile home parks are a whole another animal I've seen and this is crazy but I have seen mobile home park sell for roughly the same price as a single detitled mobile home and that is due to lending Works because mobile home parks are a much riskier asset for a lender for for someone to give financing on a mobile home park that's much riskier than simply A lender lending on a single mobile home that someone is going to own or occupy people that are own or occupying their homes tend to be more invested in their their homes than an absentee landlord or landl that has a mobile home park that you know where they're just letting the mobile homes go into disrepair or what have you so it's it's quite challenging to get financing on mobile home parks oftentimes lenders are are really disregarding the mobile homes entirely on those parks and simply looking at the land and what type of value the land has to the potential owner this is not about again this is not about mobile home parks I just wanted to clarify that because when we're talking about DET titling a mobile home putting it on a permanent foundation all of that in terms of the appreciation it's a lot different if it's a single mobile home for an owner occupant versus a mobile home parks mobile home parks do not appreciate and value very much and and that's an important thing to consider and that's primarily because of the difficulty to get financing on them it is not very difficult to get financing ing on a single mobile home that you're planning to own or occupy not every lender will finance that but there are plenty of lenders out there that will do that and that's something that I'm currently helping some clients of mine that are purchasing a mobile home to live in currently helping some of them with that we had to use a different lender for that than they were originally pre-approved for because the original lender couldn't do it now are there examples right this is we we talk a lot about data in this podcast and so far I've primarily just given you theoretical ideas is there actual data of detitled mobile homes appreciating in value due to the appreciation of the land that that the home is on absolutely there are tons of examples and I could give you tons of examples now that would be kind of kind of boring I'm not just going to sit here and just rattle off a bunch of examples but I will give you one and this is one that I sent to a client of mine when I was trying to explain this idea recently and it's in Woodruff South Carolina and and a lot of these mobile homes they are in more rural parts of of our Upstate of South Carolina Woodruff is one of those areas that is tends to be a little bit more rural and so you can look this up 412 bushy not Brushy bushy Creek Road I hope that's right usually it would be bu Brushy Creek Road actually you know what I'm going to look that up oh it is bushy Creek wow 412 bushy Creek Road in Woodruff South Carolina has sold three times over the past eight years and what's interesting from what I can see during that time there haven't really been substantial updates made to it it's not like this was purchased as a fixer upper years ago and then was rehabbed and we can see you know increases in value so this is a good comp for what what a mobile home can do over the years now this is a mobile home it's on about an acre of land and so that's an important detail obviously because the land disproportionately is assisting in the value of the mobile home how much land it's on makes a big difference if you have a mobile home on just you know 0.15 Acres it's not going to appreciate in value as much as a mobile home on one acre that is also true of stick belt homes as well so that might be not as important of a distinction as it might originally appear but that's just something to keep in mind 42 bushy Creek Road in Woodruff South Carolina in 2014 sold for $668,000 okay I've been in real estate not quite that long about six and a half years at this point but that makes sense I have seen back when I first started mobile home selling for around that price that that were in good condition not anymore and this is reflected in what happened the next time it sold in 2020 it sold for $106,000 so it went up almost $40,000 between 2014 and 2020 but guess what that was in early 2020 that was literally it closed in on March 23rd 2020 and we all know what happened in March of 2020 right and that was when in the real estate World things got absolutely nutty and so it's sold one more time it's sold this year in 2022 for $190,000 a property that just two years ago sold for $106,000 so it went up over the course of eight years it increased in value 280% which is really really phenomenal and again that's not due to from what I can see any major improvements that were made it was just the home went up in value and the reason it went up so much in value is the same reason that everything has gone up has appreciated so much in in the past couple of years it's just supply and demand and 190,000 is still much cheaper than you can get a stick built livein ready home on an acre for in Woodruff South Carolina again we've talked about this before the average right now on the upsate or the really more specifically the median right now in the upstate is about $300,000 for a house so to get a house mobile home or not for $190,000 is a really good price in comparison to what else is available now obviously if that were a stick built house all of those numbers would be higher right it wouldn't have sold for 68,000 2014 would have been more 2020 it would have been well north of 106,000 and in 2022 it would have been well north of 190,000 it probably would have been like I said closer to that $300,000 range so I'm not arguing that mobile homes appreciate at the same rate as stick Built Homes but the myth that mobile homes simply do not grow in value or that they potentially even go down in value that is more myth than fact you have to take a lot of other things into consideration when thinking about what mobile homes do from a value perspective the land and other aspects of what are happening in the broader economy and the broader housing market those things ultimately determine more than the the status of it being a mobile home those things determine what happens from an appreciation standpoint those are the same Dynamics at play that determine what happens with stick Built Homes from an appreciation standpoint so for my purposes if I were in the market looking to purchase a mobile home to live in I would not personally think of it from the standpoint okay this is a depreciating asset I would personally approach it from the standpoint of barring something unexpected in the economy that would have a ripple effect on the entire housing market here in the upstate I would operate under the loose assumption it's going to continue to go up in value because that's what we're seeing I gave you one example I could give you a bunch of other examples but we're not going to do that because I think you guys get the point and I hope that you have a little bit better better understanding of mobile homes and what happens from the standpoint of their value throughout the years that they are bought and sold that is it for today I hope you guys enjoyed the episode I hope you guys will subscribe to the show if you haven't already that you'll leave a five-star rating that you'll just type up a quick little review on whatever podcast app you're usin and as always my contact information is in the show notes if you need to reach out to me for any reason have a great rest of the week enjoy the nice weather and we'll talk again next time [Music]