“Can I prevent my mobile home from depreciating?”
As someone who cares about good stewardship, you’re asking the right questions. That’s great. We’ll help you find the right answers to assist in caring wisely for your resources — in this case, for your mobile home.
But that’s not all we’ll talk about today. We have a host of other frequently asked questions to consider. We hope that the Frequently Asked Questions series proves helpful to all mobile home owners, buyers, and sellers.
A word about appreciation and depreciaton
You asked, “Can I prevent my mobile home from depreciating?”
Before we discuss depreciating mobile homes, we must first ensure that we’re all on the same page. Skip ahead if you’re already familiar with the concepts of appreciation and depreciation as they relate to homes.
So what’s depreciation? Or appreciation? Depreciation is what happens when your mobile home loses its resale value. Causes of depreciation include, but are not limited to, the use of the asset over time, poor (or no) maintenance, the market, and your neighborhood.
Appreciation is the increase in value. Location is a big factor. And so are the right improvements that add value to your mobile home. (More on this later!)
With that brief breakdown of appreciation and depreciation in terms of your investment, let’s move onto answering some frequently asked questions.
Can I prevent my mobile home from depreciating?
Back to the question that brought us here — “Can I prevent my mobile home from depreciating?”
In short, no. Depreciation for an asset that sees any use is inevitable. However, that doesn’t mean it’s a lost battle — there are actions you can take to help with your mobile home’s value if the home is in the right location.
How does home location affect depreciation?
Now let’s discuss location. How does your mobile home’s location affect depreciation? A home that’s strategically located near schools and shopping areas will be of more value than a home that’s further away.
Additionally, a home in a neighborhood that has fallen prey to poverty and crime will also decrease in value compared to a mobile home in a safer district.
You know the old real estate mantra — location, location, location! Remember that can hold true for mobile homes, too. For instance, think about mobile homes like these in Malibu, California. Of course, you could find mobile homes with similar square footage elsewhere at a much lower cost. Why the vast difference? Well, in part because not all locations are created equal.
What sort of improvements add to home value?
Energy-efficient upgrades contribute to the increase of your mobile home’s value. This may include energy-efficient doors and windows, insulated skirting, and more. Joining the mobile home to real property can also increase value. Consistently maintaining your manufactured home is another big factor in your home’s value. Over time, your mobile home can deteriorate if you don’t take care of things like leaky plumbing or peeling paint on your porch.
Increasing your overall curb appeal is always a big win.
How much does a mobile home depreciate each year?
A mobile home’s depreciation is calculated based on salvage value, cost, and the estimated life of the mobile home. Check out how to calculate depreciation if you want to know more. Five percent is subtracted from the depreciation price for each year you’ve owned the home.
To calculate your mobile home’s depreciation over the coming years, follow the formula and instructions as described in the article above. Knowing your mobile home’s value will help you decide the future of your life in that home. For example, it can help you address questions like these: is it worth it to renovate? Should you move? Should you stay? Take depreciation into account as you weigh your options.
So can you prevent your mobile home from depreciating? As we explained above, mobile home depreciation is inevitable but not hopeless. There are actions you can take to care for your home and increase its value and longevity. We also discussed how much a mobile home depreciates each year.
Want to increase the value of your mobile home? Check out these mobile home upgrades that can increase the value of your home. From curb appeal to energy efficiency, you’ll find a place to start regardless of your budget.
If you’ve assessed your mobile home’s value and determined that scrapping it is the way to go, we have the article for you: Can Scrapping Mobile Homes Be Profitable? And Other Related Q&As.