What's a prefabricated home you may be asking yourself? Well, it's a mobile home that's not "mobile" anymore. It appears that the mobile home has transformed into a more luxurious home known as a prefabricated home, also referred to as modular homes.
Traditionally, we know that non-mobile homes increase in value over time and mobile homes would generally decrease in value. However, over the past several years as we've watched the housing market take a turn, we've experienced many changes, from foreclosures to declined property values. Now, today it seems as though the tables have turned, traditional houses are now declining in value and modular houses are on the rise.
So, what's drawing real estate investors to these prefabricated homes and why are they becoming the new real estate investment trend?
Here are a few reasons why:
- In the late 1970's the Federal Government implemented a safety standard that extended a modular home's life to meet the maximum loan life of 25 years.
- They require less land and many investors and/or those seeking their first home are becoming more attracted to this alternative.
- Prefabricated homes are built much stronger than traditional one's
because they are built at one location and then transported to the new
location. This means that they have to be able to withstand that
For example, a traditional home structure is built using 2" by 4" pieces of lumber for walls, but prefabricated structures have to be 2" by 6" for additional strength.
- Since prefabricated homes are cheaper to own, first-time home buyers are able to own their dream home on a limited budget.
- They allow buyers to have more options when choosing a design for the home.
- Prefabricated homes appreciate in the same way traditional homes do allowing equity to grow.
- They also offer "green" ideas. Many people are going green and a modular home is extremely attractive because they can be placed at an angle that can allow an extreme amount of natural sunlight.
- These homes may be built faster, allowing families to move in sooner than traditional homes.
- Many modular homes are very energy-efficient, which helps reduce your heating and cooling costs.
These are just a few of the reasons that real estate investors and first-time home buyers are turning to prefabricated homes. There are several more reasons that this new trend is taking more of a notice when it comes to real estate investing and I'm sure we will hear or read more about it soon.