The question is always asked to us at The Mobile Home Dealer, do mobile homes on leased land appreciate, or do they depreciate?
Before we get into that answer, we need to do a quick review of what exactly is a mobile home on leased land.
When purchasing a mobile home on leased land in Florida where you are physically owning the home but are paying a monthly lot rent payment to the park then that home is viewed as personal property, not real estate.
As mentioned in a previous article, this will mean that the home is just like buying a vehicle as these homes have titles and not deeds associated with them.
As we all know, cars will depreciate rapidly, especially when they are taken from brand-new cars to of used cars. Many times this will drop your car’s worth significantly once it is driven off the car lot and the first few miles are put on it.
So, with that said, does the depreciation continue at the same rate for a mobile home on leased land as it does for an automobile?
The answer to this largely depends on the condition of the property and how well it has been taken care of since it was originally delivered from the factory or previous owner to its current location that you see it in.
One of the main ways a home will depreciate is if the structural components are not well taken care of.
These will be the roof, your air conditioning system, and making sure the structure such as the walls and floors are free of severe water and termite damage.
If any of these items are severely damaged or need to be replaced then, yes, the home will depreciate very, very quickly.
If the home has basic wear and tear items on it and does not require a new roof or the flooring and wall system does not need to be redone, then we see the depreciation come at a much slower pace. Please note, in both instances, we see that the home will generally lose a little bit of money in home value, not gain value.
What we have found as one of the main keys to focus on to maximize your investment is to do all you can to purchase the mobile home at or below what the market is calling for the home to be worth.
Buying the mobile home at a discount will allow you, the Buyer, to have room in the value of the home to break and make a pretty good amount of money on the property when you go to sell it.
The key here is just like the old saying goes, “you make your money at the time of purchase”.
Very rarely do we see mobile homeowners make a significant amount of money on their mobile homes regardless of what upgrades they put into the property.
What we have seen, however, is that there are Owners that I see all the time who do break even or make a pretty substantial amount of money if they buy their home correctly and sell their home fast!
If you own a mobile home in the Sarasota Florida area and are planning to sell it in the future, you must be aware that several factors contribute to the appreciation or depreciation of the value of your mobile home.
Location. We heard this many times. “Location, location, location”. This is not just a cliche. There’s a truth behind it. When your mobile home has proximity to employment centers, business districts, tourist attractions, shopping centers, schools, and other establishments, the property always demands higher value than those that are not located in the same mobile home park.
Age and condition of the mobile home. In the Sarasota Florida area, many of the mobile homes are built more than 20 years ago but this doesn’t mean that age of the mobile home can automatically reduce its value. The current condition of the property regardless of its age can make a huge difference. Keeping your mobile home properly maintained will keep its value. However, an old and poorly maintained mobile home can rapidly decrease its value.
Size and improvement. Although costly improvements seldom affect the value, good renovation, and minor improvements can certainly help maintain its value.
Population movement and season. In Sarasota Florida, the price of mobile homes mostly goes up during the summer season when people from the North are migrating to the Sunshine State. When there is a high demand and low supply, it is understandable that the price of goods will increase.
Surrounding area. The future is hard to predict but what may happen in the future is another factor to consider when selling or buying a mobile home. If your property is sitting on a mobile home park where its surrounding areas are undergoing commercial development, this can increase the value of your mobile home.
Sarasota mobile homes, like most other types of real estate, can appreciate or depreciate over time. Factors such as the age and condition of the mobile home, location, and local market conditions can all have an impact on the value of Sarasota mobile homes. Generally speaking, mobile homes can be appreciated if they are well-maintained and located in desirable areas. On the other hand, they can depreciate if they are outdated or the area around them is declining in value. Therefore, it is important to research the local real estate market before investing in a Sarasota mobile home to ensure that it is a sound investment.
These are just some of the main factors that can affect the longevity of a mobile home venture and the valuation of the property.
This is Mark Kaiser with the Mobile Home Dealer and we help mobile home Buyers and Sellers get to a better place in life.