Owning a modular home – pros and cons

Becoming a homeowner is everyone’s dream. Unfortunately, this dream is often far from reality. With such high property prices, it is a miracle how many people still manage to achieve it. However, there is an alternative for those with a tighter budget – a modular home. Although it has many benefits compared to a standard stick built home, owning a modular home has its flaws, too. Find out more about this type of housing before you decide whether it is for you or not.

A yellow scale on a plain white background
Weigh up the pros and cons of owning a modular home before deciding whether it’s the right choice.

The advantages of owning a modular home

Quick construction

Unlike stick-built homes, building modular homes does not take much time. It can only take one day to assemble a modular home! When building a standard home, delays are far more likely to occur.

Since a modular home is built by the manufacturer, there are sufficient supplies. So, you can expect it to be finished as scheduled. Everything is already assembled, therefore, you don’t have to do it yourself. Moreover, modular homes are built indoors, which means weather conditions cannot delay construction. On the other hand, when building a regular home, the workers cannot work while it is raining or snowing.

Low price

The price of a modular home is one of its major perks. It depends on the home’s size, location, and design. You will spend between $150 and $250 per square foot for a stick built, non-luxury home with standard construction methods. The cost of buying a modular home is up to 15% lower in comparison to a regular stick built home. It can be even lower, depending on the location.

Favorable financing

In addition to lower prices, there is more favorable financing. Homebuyers can opt for financing their home through the manufactures, apart from regular financing options. Manufacturers occasionally offer better financing options compared to other lenders.

Excellent quality

This is another benefit of owning a modular home. Despite the stigma linked to modular homes, their manufacturing is much better than what it used to be. It has improved so much that it can compete with stick builders. Often, modular homes are even better. The building procedure is under strict quality control in a factory setting. By contrast, stick builders are constructed from the ground up, exactly where the house will stand. Sometimes, inexperienced builders make mistakes owners discover years later.

Better than a mobile home

A modular home is different from a mobile home. It is true that the quality of mobile homes has improved but they still don’t last as long as stick built and modular homes. Also, their resale value is not as good.

A snail carrying a small yellow house on its back
Although in most cases modular homes are permanent, sometimes you’ll be able to disassemble them. That means you can pack your bags and change the location whenever you want.

The disadvantages of owning a modular home

Hard to sell

Most people think modular homes are not as good as stick built homes which makes them more challenging to sell. If you wish to sell your home at some point, bare in mind that most buyers won’t see the advantages you see, no matter how good your arguments are. Still, with a little patience and an experienced realtor, you will be able to find buyers who appreciate the benefits of owning a modular home.

Complicated payment process

Most of us know how a mortgage for a stick built home works. However, the payment process for a modular building has a few more steps. You may have to pay the builder in full before the job is done. First, you will get a construction loan to pay the builder. That loan will turn into a standard mortgage once the home is built. Make sure you do enough research so as to find the best loan programs that fit your needs.

Lack of flexibility

You cannot change the home’s shape or look that much. While you can customize a stick built home according to your taste and needs, you are less likely to do the same with a modular building because of the way it is manufactured. Although you do have some customization options, they are very limited.

Additional expenses

  • The cost of transporting modules outside 500 miles is excessively high due to their size. So, in order to own a modular home, you need to be close to the factory that makes them.
  • Apart from buying a home, you need to buy a piece of land for it to stand on. The price may be an unpleasant surprise. Land development can also be very expensive.
Traffic stop sign; a green field and the sky in the background - stoping people from owning a modular home
Since modular homes are still relatively new to the industry, outdated zoning rules could complicate the project or make it impossible to carry out.

Mold and moisture damage

The modular construction industry has experienced problems caused by moisture and mold. Module homes built in a warm and humid climate (like the southeast part of the US) are particularly susceptible. Both steel and wood frame modular constructions have problems with crawl space, marriage wall, and ceiling to floor cavity. This leads to the deterioration of the wood, corrosion of metal floor pans, and mold damage.

Insurance for modular homes

Just like any other home, a modular home needs protection against damage and loss. Although insurance requirements vary by state, if you make payments to a bank or a mortgage company, insurance will probably be required. Those who own a modular home should buy a standard homeowners insurance policy. The coverage you need for modular homes is not that different from traditional homes. The amount of coverage depends on the value of the home and other factors such as the risks in the area and whether you own the land where the home was built.

Many public claims adjusters South Florida offers have plenty of experience in dealing with modular home owners insurance claims. Turn to them for help in case you need to file a fire, tornado or hurricane damage insurance claim and get the coverage you deserve for the loss you have suffered.