Housing costs make up the biggest part of our budgets. In fact, the average American household spends over $10,000 on housing alone every year. I’m sure you are here because you want to keep that cost low and. Perhaps you have boiled your options down to a mobile home or an apartment and wondering which is cheaper.
Mobile homes are usually significantly cheaper than apartments, although prices vary a lot depending on location and other factors. The median rent for one-bedroom apartments is about $1,230 per month, whereas a typical mobile home rents for about $500 per month. Mobile homes also cost $200,000 less to buy than an average condo.
But the cost of buying or renting is not the only thing that matters when choosing a home. Many other factors influence your decision, so allow me to elaborate.
Location, Location, Location
The location has a significant impact on property values. As the number of people who wish to live in a specific area increases, so does the demand for local properties. And since land is a limited resource and construction is slow, this drives up the property values.
The same thing happens to the cost of renting: as more people wish to buy, there is an equal increase in people looking for a place to rent. At the same time, landlords will want to be compensated with increased rental income for not selling their property at a premium.
In short, it is very difficult to compare the price of mobile homes and apartments without considering location and property values. Therefore it is only possible to make very generalized statements that may not reflect your area.
Buying Vs Renting
Another important factor when looking for a home is the Price-to-Rent Ratio, which is the difference between home prices and the annual cost to rent a similar home in the same location. In some places renting is a lot cheaper than buying, and in other places, this is the exact opposite. However, as a rule of thumb, renting is cheaper in the short term while buying is cheaper if you plan to settle down for several years.
This geographic variation in the Price-to-Rent Ratio does mean, however, that the results below are not set in stone. You may find that, although mobile homes are generally cheaper, buying a condo will be a better investment in the long run.
An important factor if you are considering buying an apartment or a mobile home is that mobile homes usually decrease in value whereas apartments usually appreciate over time. This does depend on location, however, and not all apartments will be more attractive to buyers in 10, 20, 30 years.
On the other hand, the land that your mobile home is sitting on may also increase in value, and perhaps by a lot. While most mobile homes are on leased land, it is also possible to find lots for sale which could turn out to be a good investment.
All Else Being Equal, Are Mobile Homes Apartments Cheaper?
According to Business Insider, the median one-bedroom apartment across 50 major US cities rents for $1,235 per month. With significant variations, from $850 in New Jersey to $2,200 in New York. At the same time, the median size of a one-bedroom apartment is 678 square feet. A two-bedroom apartment typically costs 12 – 34% more and offers 1,006 square feet.
A mobile home in a mobile home park typically costs $200 to $300 per month to rent plus an additional $200 to $300 in lot rental, totaling $400 to $600 per month.
Mobile homes are typically 1,080 square feet (with double wides ranging from 1,000 to 2,300 sq. ft). So even a basic mobile home is almost double the size of a typical one-bedroom apartment. This is more comparable to a two-bedroom apartment, which will generally cost between $1400 and $1,650 per month.
In short, renting a mobile home will typically cost around $725 less per month compared to a one-bedroom apartment and around $1,000 less than a two-bedroom apartment.
This is quite the difference but bear in mind that most apartments are located in cities, which tend to have higher property (and rental) prices. In contrast, more mobile home parks are found in the outskirts or outside of the cities.
Buying a Condo vs a Mobile Home
If you are thinking of settling down long-term, it may be worth buying a home instead of renting. But then the question arises: Should I buy a condo or a mobile home.
According to the National Association of Realtors, the US median price of a condo is just under $250,000. Assuming a 20% downpayment you would be looking at a monthly mortgage payment of approximately $1,400 or about the same as a cheap-ish two-bedroom apartment.
This is in sharp contrast to the price of a mobile home, which typically is $40,000 – $60,000 for a new single-wide and $110,000 – 120,000 for a double-wide. Add to that the cost of the lot, which will vary significantly depending on the location and property size, and you are often looking at a very affordable home.
Based on purchase prices, a mobile home is usually much cheaper than a condo. But bear in mind that condos generally appreciate and that mobile homes’ mortgage rates are a few points higher due to depreciation.
Rent or mortgage costs is not the only factor that one should consider before making a decision. There are also utilities, insurance, and property taxes. This depends on where you live as these expenses vary from state to state and even from county to county.
Both condos and mobile homes are subject to property taxes, which are typically calculated based on your home’s value and square footage. Local laws may tax you at a higher rate if you own the land your mobile home is placed on. Make sure to know the property taxes before you buy.
Heat and A/C
While water and electricity use mostly depend on the number of inhabitants, your heat bill will depend on the type of home to a much higher degree.
All things being equal, your heat bill will usually be higher in a mobile home than in an apartment. This is because apartments “share” some heat as they are located next to each other and usually only have one or two sides exposed to the elements.
Generally, the same logic applies to airconditioning needs in warm climates. This in particular if your apartment is facing north and not exposed to direct sunlight.
Sometimes Expensive Is Cheaper
Then there are transportation costs. Perhaps you can find a cheap mobile home outside of the city. But if you work in the city, you will have to spend time and money on transportation, which may or may not increase your total cost of living even if your housing costs are low.
On the other hand, if you work outside of the city, you may not want to commute from your apartment every day.
Many other important factors are harder to quantify monetarily, such as community, safety, and distance to friends and relatives. To some degree, your housing choice is not a purely monetary one. Many factors come into play, and mobile homes and apartments may appeal to somewhat different lifestyles.