Modular homes vs manufactured homes are often a huge source of confusion for many people. Some people use these words interchangeably, but in fact they are very different beasts.
Both modular homes and manufactured homes are extremely useful alternatives to the traditional site-build homes. In fact, we predict they will become more and more popular over the next few years.
If you are getting ready to buy your own home or are saving up at the moment, it is wise to stop and consider ALL the alternatives before you jump in and go the traditional route to buy the standard home.
Take a few minutes to open your mind to check out the pros and cons of “systems built technology” (modular homes) and manufactured homes that allows for potential massive cost and time savings.
Technology and innovation are everywhere including the home building industry. It is an exciting time to watch how quickly home building is advancing.
Our generation have the opportunity to think “how could I do this better, cheaper and more efficiently?”
We can make a choice to embrace a new way of doing things, rather than simply buy a standard house like our parents did.
Or build a house from scratch-slowly brick by brick.
And then spending the rest of our working life paying it off!
But is this the smartest way to go these days?
Or is there an alternative? If you do not own your own land yet, be sure to check out our current listings. Whether you decide on modular homes vs manufactured homes, you will need some land for them on which to rest.
Lets look at both options and then decide…
Manufactured homes are typically single-wide, or double-wide.
A single-wide home, or single section home, is a floor plan with one long section. It is approximately 1330 sq ft on average.
A double wide home or two section homes, are floor plans with two sections joined together to create a larger home. Double-wide manufactured homes are approximately 1800 sq ft on average.
These are very popular with first home buyers, retirees and 2nd home buyers as they are one of the cheapest ways to own a home.
The primary advantage of a manufactured home (also called a mobile home or trailer home) is low cost.
Manufactured homes are built in factories on their own steel chassis and are completely constructed before being transported on their own wheels to your land.
The second advantage is speed.
It is possible to have a pre- built manufactured home delivered to your land within days.
Sometimes the wheels are removed, sometimes they are not.
They are easy to set up. They are rarely set on a permanent foundation. Typically, they have skirting/siding around the bottom of them to hide where the wheels are or where they were removed and to give it the appearance of a standard home.
Sometimes it is possible to move it to another site if you need to move. Though in practice this rarely happens.
Restrictive zoning issues are one of the biggest obstacles these days for manufactured homes. In some areas they are banned completely. In other areas, they are allowed only on the outskirts of town.
Some counties have placed an age restriction on manufactured homes, disallowing the placement of a home more than 5- or 10- years old.
These local laws have basically placed an expiration dates on these homes, and have artificially killed the resale value.
You will also need to check the lot size required for manufactured homes, density and set back requirements.
Another major disadvantage is lack of financing. It is extremely difficult to secure a loan on a manufactured home.
Manufactured homes are often titled as personal (or “chattel”) property, like TVs or cars, rather than as “real” property, like houses or apartments.
This has major implications for financing, taxation, consumer rights and protections.
The third major disadvantage is that manufactured homes typically depreciate in value. So while they are much cheaper to acquire in the beginning, if you were looking for a long-term investment that may appreciate over time like land or like a house, sadly, a manufactured home will lose value over time.
This decline in value over time is another reason why lenders do not like extending loans to manufactured homes.
Manufactured homes generally do not need to pass a building inspection to ensure they are structurally sound. They are manufactured according to requirements from the Department of Housing and Urban Development (HUD).
Some aspects of the work such as electrical or plumbing might be inspected, there is no requirement for structural inspection of the home itself.
Many of the manufactured home and modular home sellers will be well versed in their local county zoning laws and permits required.
They will let you know to the best of their knowledge what is permitted and where. We also suggest that you read the County’s planning and zoning department website and even better, pick up the phone and call them. Ask them to tell you the different requirements on modular homes vs manufactured homes. Ask about any restrictions on size and age of the proposed home.
Taking the time to talk to a human being will pay great dividends. Often the planning and zoning people are very experienced and knowledgeable about what is required and the process you need to follow.
They have been asked most questions before and will be able to give you some great advice. Call them well ahead of time.
Tell them your plans and make sure you are certain your plans are allowed before you embark on any project.
A modular home is built in separate modules in a factory off site. Sometimes they are called pre-fabricated homes. In the past, these sometimes had a bad name for being poorly built, being cookie cutter, and looking rather nasty.
But now times have changed, standards and technology has improved and modular homes are booming in popularity.
Everything down to the flooring and fixtures are completed before the modules leave the factory.
They are then transported to your land via flatbed truck and typically assembled in a day. The modules are slotted in and fastened together by using a large crane and construction workers at the building site.
After that, the professionals connect up the services, such as water, power and sewerage lines (or the well and septic).
It is typically a steel framed house built from standard building materials. On average they are larger than manufactured homes. They have full kitchens, bathrooms, bedrooms and laundry.
A granny flat or back yard studio might be built from two modules.
A four-five bedroom home might consist of 6-8 modules.
They are placed on a permanent foundation unlike manufactured homes. This helps makes them more sturdy and hold up well to bad weather.
The technology has improved so much these days that you could not tell most of the time which is a “standard” site built house and which is a modular built house. They are very good at getting the cosmetics right.
One of the major advantages of the modular homes is that they are titled as “real” property, just like site-built homes.
This gives you the same financing options, legal rights and protections, and the same tax treatment as you’d get with buying a standard home.
This also means these modular homes appreciate in value the same as the traditional site build homes in the area.
Another advantage of modular homes vs manufactured homes is that you get a lot more design flexibility.
You can customize the interiors and exteriors of the house to suit your dreams.
You can customize the size and shape (within reason) of your modular home.
You can make it as luxurious or simple as you like. You can choose to have the roof with a shallow slope or steep, with dormers or without.
You can also add on extras like sun rooms, basements, gas fireplaces, gymnasiums, porches and garages.
Check out this video of one incredible modular mansion home :
The much shorter construction time is very attractive to many people- generally just a few weeks instead of a multi-month process with a standard build.
Modular homes are more expensive than manufactured homes, but much more affordable than standard site built homes. (Keep reading as we will discuss cost towards the end).
Modular homes are structurally inspected by professionals and must adhere to the same local, state and regional building standards, codes and requirements as traditional site built homes.
Cost of the transport of the modular home to your land can be a disadvantage.
If you live far away from the factory, there will be a point where the cost to transport it to you is prohibitive.
Ideally, you should be within 300-400 mile radius to the factory.
Also check the transport route from the factory to your land. Ensure the truck carrying the modules can physically navigate the roads.
Make sure there are no low hanging over passes, narrow tunnels or hairpin bends.
Carefully confirm the dimensions of the module and the truck that will be carrying your future home and do the drive yourself to rule out any potential snags that you want to avoid on delivery day.
Also bear in mind that the further away your land is from the factory, the more wear and tear it will experience on the road journey- either from burning hot sun, lashing wind, snow or rain or pollution, pot holes and traffic accidents.
The shorter the distance, the better.
While there is usually some customisation possible, if you want to completely customize your home, or your land topography is too challenging, it would be best to go with the standard site build.
Always check with your planning and zoning that modular homes are allowed. Modular buildings are relatively new to the construction industry so some local county zoning laws are out-dated and struggling to keep pace.
Check carefully the fine details like set backs required.
Putting together a modular home is a little more complicated than simply snapping together a few “Lego blocks”. The modular home factory will suggest their experienced builders and a crane to assemble it on site.
If you prefer to use your own builders, make sure they are experienced in many modular home constructions.
A standard home and a modular home are very different.
Make sure they are not experimenting assembling their first home with yours.
Even experienced builders in some cases have not had experience with modular homes.
Here is a video where you can watch a modular home being built.
As both manufactured home and modular homes are built off site, they should both be cheaper than a site build traditional home. Also the factory will be able to get wholesale deals on building materials as they can order in bulk.
Building from the ground up on-site is expensive, time-consuming and inefficient.
A factory-built home can be constructed in a week, delivered to a site and installed in a day.
As is true of any home, the cost of a modular home depends on its size and inclusions.
In general, the price depends on you!
There is base price of a basic model.
Then it depends what size home you want, interior materials, appliances, cladding, insulation and other features.
Also remember to include the cost of transport to your land.
Let’s compare the cost of modular homes vs. manufactured homes.
A standard site build home would cost approx. $115-$200 per square foot depending on where you live in the country.
The average size of the standard American home is 2687 square foot.
So if we take the middle figure your average size site build home might cost you $150 x 2687=$403,050
Of course, this varies widely from state to state and city to city. The median price of a home in Detroit is approximately $35K, the median in San Francisco being over $1,387,000 according to Zillow.com!
A single-wide manufactured home tends to cost between $45K-$50K
A double-wide manufactured home tends to cost between $100K-$120K. There are regional differences in price, seasonal differences and it depends on what customisations you request on top of that.
The average cost per square foot for a typical modular home is $76.80.
But the range can be huge, depending on what design you want. Some will be less but if you want to pimp it up, a luxury modular home will cost a lot more.
If we assume, we will aim to stay near the average $70 x 2687 sq ft, a modular home might cost us $188,090 which is still considerable but a quarter of the cost of the traditional site built home.
And if you go for a smaller home say 1200 sq ft and stick with standard design, you could get the cost closer to $60 per sq ft, you’d only have to find $72,000!
Are there any other options?
As modular homes are considered real property, you could get a loan at a bank if you qualify. Get your financial statements together and make an appointment at your bank and see if they will give you a loan and at what rate.
To qualify for a bank loan, you will need to actually own the land you wish to put your home on. If you have been paying off the land on an owner financing option, you will need to have paid for the land and had the deed recorded in the name. No bank will lend you money for an asset to be placed on land that you do not fully own. Also most land sellers will not want you living on their land until you own it outright.
Some people may not even need a loan, if they have diligently saved up and kept their requirements fairly modest.
Or if you do, maybe you can try to make the loan term shorter and pay it off within 7-10 years instead of 30 years!
If you are like most of our audience, you want to get rid of all loans and experience the true freedom of being debt free as quickly as possible.
You will generally NOT get a loan on manufactured homes at all as they are not considered “real” property.
Even though it is cheaper at the outset to buy a manufactured home, try to imagine yourself in 10 years time.
Will you be regretting it later on when all the property values around you have risen in value across the country but yours has gone down?
Another factor that has happened to some people is that the counties have been implementing special restrictive zoning ordinances to ban “older” manufactured homes.
This special zoning wipes out any resale value for the manufactured homes.
As most people consider their home to be their biggest asset, we would suggest that if you can stretch to purchase a modular home over a manufactured home, that it would be a better long term purchase.
Modular homes are more welcomed by most counties. They tend to appreciate over time like standard housing and have the same buildings standards when constructed. Who knows, it may even be possible to add extra modules to your home over time as your family expands or your needs change.
No matter whether you decide to go with modular homes vs manufactured homes, always be sure the check first with your local county planning and zoning laws to ensure your plans will be approved.