Should I buy a park model?
In today’s blog post, we will discuss: Should I buy a park model? We will discuss the reasons why you should and why you should not buy a park model home. We will also review the steps of a successful purchase.
Should I buy a park model?
You should buy a park model home if you are looking to build a large home at an affordable price. Park model homes are a great choice, especially for new investors who are on a budget. They are also high quality – usually, the quality of park model homes is as good, if not better, than that of traditionally built houses.
Here are the main reasons why buying a park model home is a good investment:
- Minimal turnover – Residents living in park model home communities are owners, rather than renters. park model home community residents are less likely to move out when their leases expire.
- Reputable Residents: Manufactured housing communities attract higher-income residents or retired residents with strong pensions. This means less likelihood of defaults or evictions.
- Low supply and high demand: While the demand for park model homes is growing, the supply has not been sustained. High-end park model home communities consist of quality homes and residents. However, given negative perceptions and strict zoning regulations, developing a park model home community can be difficult.
- Resistance to recession: Manufactured housing is considered a counter-cyclical asset class. In other words, the demand for this type of housing tends to increase during economic recessions, as people lose a permanent stream of income or want to downsize to something more affordable.
Why shouldn’t you buy a park model home?
One downside to buying a park model home is that its value will depreciate quickly. Like a new car, once a park model home leaves the factory, it quickly loses value. … One of the reasons park model homes lose value is because they are personal property, not real property.
Because they are mass-produced and built on assembly lines, park model homes cost less to manufacture and therefore less to buy.
The depreciation rate for a used park model trailer is as follows:
- 30% the first year.
- 15% the second year.
- 10% in the third year.
- 7% for each additional year.
Do banks finance park model homes?
If you own the land where your park model home will be placed, you may be eligible for traditional financing. The park model home must be built on or after June 15, 1976, and have a HUD tag to certify it. It should also be at least 400 square feet.
Is it difficult to get a mortgage for a park model home?
No, it is not difficult to get a mortgage for a park model home, but it’s different. Some lenders offer conforming mortgages for park model homes, which are standard for traditionally built homes. Bank loans, along with USDA and VA-backed financing, are other ways to finance a park model home.
The steps for buying a park model home
Thinking of moving to a new home and considering buying a park model home? Here are all the steps that will lead you to your new property.
- Choose the park model home manufacturer that best meets your criteria. First and foremost, choosing a pre-park model home manufacturer is essential in order to successfully complete your project. Above all, you want everything to run smoothly and to do business with a builder you can trust.
Here is a list of criteria to consider in order to find the right park model home manufacturer:
- The reputation of the manufacturer
- Proximity to the manufacturer
- The number of park model homes you can choose from
- The customization possibilities offered
- The quality of the service
- The type of park model home that’s right for you
- The available purchasing options: turnkey, for a handyman, for self-builder, etc.
- The price of park model homes (it is better to compare between manufacturers).
All these criteria will be used to make your choice on one manufacturer rather than another in order to materialize your new park model home construction project.
- Select your park model home model. To find the right type of park model home, you better be well prepared and know what you want before you start your research. So make a list of specific criteria that will help you eliminate models and make a selection of the different possibilities that might meet your tastes and needs.
Think for example of the style, the number of floors, rooms, the configuration of the space, etc. Thus, you will be able to find a model park model home that satisfies you.
What do we mean by model or type of park model home? Basically, we are talking about:
- Architectural design: there is a very wide variety of house models that have been planned by teams of designers. For example, there are different contemporary, classic, country models or even more rustic types of park model homes. Manufacturers have online catalogues that you can view.
- From the interior design of the factory-built house: Different house models come with their own unique interior space configuration. You can compare plans by assessing whether they meet your criteria. Try to find a shot that comes closest to it. If you need minor changes to it, you can request it from the manufacturer.
- Obtain financing for the purchase of your park model home. When you have chosen a house of your liking from the park model home builder, you will necessarily need to obtain financing to make the purchase.
Speaking of which, you have two options:
- Meet with a financial advisor before you begin your steps to purchase a key pre-engineered home so that you know the amount allocated to you upfront. That way, you won’t be giving yourself false hopes by choosing a park model home that doesn’t fit your budget.
- Meet with a financial advisor after obtaining the quote to verify if the financial institution agrees to grant you a mortgage loan for your project.
Once your financing is official, you will be able to sign your purchase contract with the manufacturer. Make sure that everything is described precisely: what is included, what is excluded, extras, responsibilities incumbent on the manufacturer and those due to you, guarantees, etc.
- Personalize your park model home with the manufacturer. This is a crucial step in ensuring that your new home actually meets your wants and is suitable for your needs.
Once the plan is completed, you still have several decisions to make to personalize your home, because it is up to you to choose all the coverings and colours. Some companies also put a designer at your service to help you make choices that will make your park model home your “home”.
- Find suitable land for your park model home. Some manufacturers of new factory-designed homes offer suitable land. You can also use land you already own or buy new land to set up your house.
Your manufacturer will likely visit the field to verify the location for your home, soil conditions, orientation to sun and wind, access to the land, installation of utilities or requirements for a well or sanitary installation.
This step is important because the manufacturer’s observations in the field could influence the final plan of your park model home. The manufacturer can also advise you on the preparation to receive the house.
- Observe the construction of your park model home. There you have it, the manufacturer and the model of the house are chosen, the land is purchased and you have personalized your home by choosing materials and colours. It is therefore the factory worker’s turn to begin. You have the possibility to go and see how your house is built on-site to make sure that everything goes smoothly or even, just out of curiosity!
- Prepare the plot. The land must be properly prepared before the house is transported there. The preparation includes deforestation, if necessary, but also the excavation, the laying of the foundations, as well as the installation of the necessary drainage, drinking water and sewer systems.
You can of course hire contractors to carry out this work. Do not forget that before starting, you will need to apply for a building permit from the municipality. If you have to install a septic tank or a well, be sure to inform yourself of the steps to take so that everything is done in the rules of the art, both legally and in the field.
- Install the park model home on the plot. When all the previous steps have been completed, the house will be transported to your future place of residence in order to be installed there.
If you have opted for a modular house, it will be set up using a crane and then erected in a few hours. The finishing work will then begin and will take anywhere from a few hours to a few weeks to complete, depending on your requirements.
- Move home! All you have to do is move into your park model home by transporting your belongings! Do not forget to plan your move in advance, by reserving the movers.
Conclusions
Buying a park model has multiple advantages. But before deciding whether to choose a park model, it is important to consider a number of issues and follow certain tips. Park models are like traditional homes. The only difference is that they are built by combining and joining various modules made by industrialized and standardized systems.
Do you have any questions or comments on the content? Let us know!
FAQ on Should I buy a park model?
What should I take into account when buying a park model?
The possession of suitable land, the budget availability, the architectural planning and the design of the spaces, are some of the aspects that you should take into account when buying a park model. The plot is the main thing to do in any construction!
What is my park model trailer worth?
It is not exactly obvious to assess the worth of a second-hand park model trailer. The easiest and most common way is to estimate the price of a second-hand park model trailer according to its date of purchase and its original price.
Can I move my park model trailer to another site?
Yes, you can move your park model trailer to another site, as they technically are motorhomes. It is strongly recommended that you consult your vehicle’s user manual to make sure that the gross vehicle weight rating does not exceed the capacity of your truck to pull the park model.
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