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
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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
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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
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