A new report from the Urban Institute found that in recent years, home prices have gone up at a faster rate for mobile homes compared to other types of properties. The report analyzed data released in August by the U.S. Federal Housing Finance Agency. The home price index for mobile homes had an average annual growth rate of 3.4 percent.
According to HomesDirect, mobile homes are a less expensive housing option for people because:
- they are built in factories using assembly lines
- they are built indoors so they may be built year-round
- manufacturers buy materials in bulk lowering the production costs
- property taxes are lower
- mortgages on mobile homes are easier to qualify for
Rent is one of the downsides to owning mobile homes. Mobile housing may be affordable, but if the owners do not own their own land, they are forced to rent their space and rental prices increase over time. If the land rent becomes too expensive for owners or if the landowner decides to sell the land, mobile house owners will have to move and sell their home.
There is not much residents can do about this other than find more affordable housing. Illinois is one of the 35 states in the country with rent control bans. The ban started in with Illinois’s 1997 Rent Control Preemption Act that does not allow any type of rent control for private residential or commercial properties.
This is a good opportunity for real estate investors. However, mobile homes are more likely to suffer serious damage in natural disasters like hurricanes and tornadoes. Insurance providers will more than likely only offer actual cash value coverage for mobile homes and not cover the replacement value. Actual cash value lowers the amount the insurance provider has to pay the property owner if the property is damaged by an insured event.