Buying a mobile home

Mobile homes are usually attractive to buyers for two reasons: 

  • affordability
  • the ability to obtain privacy on a limited budget.

The first item to consider in your decision making is whether you want to purchase a manufactured home on its own land. If you have an interest in land plus the building, then you have an excellent opportunity for your investment to increase in value.

If the home is on a leased piece of land (i.e. what is termed “pad rental”) the land is not included in the sale. 

You are purchasing the structure only and the right to continue to pay the landowner pad rent. Although purchasing a home without an interest in land limits your investment potential, it still allows you to create a lovely home for yourself and your family.

The second item to consider is, if the manufactured home is on a leased pad, how long and how secure is the lease?

  • Is it a private lease?
  • Is it a First Nations lease?
  • If it is a First Nations Lease, is the lease directly with the First Nations landholder or is it with the Crown?

All these considerations come into play and can make your decision making more complicated.

The third item to consider is the age of the home. 

If you need financing, older manufactured homes on pads are more difficult, if not nearly impossible, to finance with a bank. 

Because pad rental is involved and there is no interest in land, most banks will generally view the financing as a chattel loan (similar to a car loan, rather than a mortgage), which may be at a higher interest rate and shorter amortization period (i.e. period of time to pay the loan off) resulting in higher monthly payments. 

As you can see, the ultimate decision on what type of manufactured home to purchase and where is a complex one and involves many factors.

Always the most prudent decision is to discuss the pros and cons with your real estate professional and, if you are looking for financing, your mortgage broker or banker. 

All in all, owning any type of home, whether it be manufactured or otherwise, is a positive investment in your future. 


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About the Author

Lisa Salt is a Vernon born Realtor® who, along with her husband Gord Fowler from Calgary, lead one of the most successful and dynamic real estate teams in the North Okanagan. 

An international clay target shooting champion, Lisa brought the attributes of hard work and diligent focus to the real estate industry to create the success she and her team have today. 

To experience the local knowledge and expertise that only someone born and raised in the Okanagan can offer, call Lisa today and 'Just Add Salt'.

Website link:   http://www.saltfowler.com

Contact e-mail address:  [email protected]


The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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