Home sweet factory-built home
Manufactured housing doesn't have a glamorous reputation, but since 1992, when Hurricane Andrew shredded thousands of mobile homes in Florida, regulations nationwide have been strengthened. Structurally, new manufactured housing can stand up to all but the strongest storms, says Bob Stroh, who directs the University of Florida's Shimberg Center for Affordable Housing. "And beyond that some of them are really nice."
They are also really affordable.
In 1996, Jason Feinsmith was earning his MBA at Stanford University and his wife Elana was employed as a Certified Financial Planner for Charles Schwab.
While the rest of their friends were contemplating how to pay for million-dollar homes, the Feinsmiths took out a $39,000 loan on a 1974 doublewide mobile home in Silicon Valley for which they paid a total of $47,000.
Today, they still live there with their 7-year-old son and 4-year-old daughter. Elana is a stay-at-home mom and Jason is an entrepreneur who has used some of their considerable savings to start his own software venture. They have a healthy retirement account and are socking away more money to send the kids to college.
On the other side of the country in upstate New York, when Ron Hagelberger retired, he and his wife Linda sold their four-bedroom colonial and spent part of what they made on the sale to pay cash for a brand-new, 1,700 square foot manufactured house in a development reserved for people older than 55.
"We moved here because you get a lot of value for the dollar
-- three bedrooms, two baths, a formal dining
room, a large kitchen and a pretty good-sized
yard. Because the management takes care
of the maintenance, we can simply close
the door and leave. We just got back from
a cruise and while we were on it, we didn't
have to worry whether the basement was flooding
or if somebody was maintaining the pool,"
In California, the Feinsmiths paid off the loan on the mobile home, so their housing expenses each month include a monthly $826 lot rent, $22 for trash collection, $15 for sewer, and $78 for gas and electric, which adds up to $941. The Feinsmiths don't own the property, so they don't pay property taxes, and none of their expenses are tax-deductible. Still, less than $1,000 per month is pretty good for a home that has hardwood floors, a large screened-in porch, a deck and a small, private yard for the children to play in.
Elana Feinsmith says at one point they considered moving, but when they looked at the $800,000, 50-year-old tract homes that they could only afford if she went back to work, the idea lost its appeal.
The homes in the development where the Hagelbergers live are currently selling for $115,000. Land rent is $420 per month, which includes basic cable. Owners pay gas and electric, which on a year-round monthly billing cycle is about $85 per month, according to Noel Dill, vice president of Rock Oak, the company that developed the community. The residents also pay a quarterly water bill of about $25 and insurance on the contents of their homes, which could run $50 per month.
These expenses add up to about $563 monthly. If the Hagelbergers had put 20 percent down and borrowed the rest, they would be paying an additional mortgage of about $740 per month, assuming a 7.5 percent rate and 20-year term.
Manufactured housing may not be prestigious, but the savings is impressive.