Should You Buy a Mobile Home? Here's What Dave Ramsey Thinks

Don't buy a mobile home until you've read Dave Ramsey's advice. 

Mobile homes or manufactured homes are properties that are built in a factory and moved into place. They're different from site-built homes which are built right on the property the house will sit on. 

It tends to be cheaper to buy mobile homes because they are prefabricated and transported as a complete unit rather than having to be individually built. As a result, some people consider purchasing one so they can have a place of their own without taking out a large mortgage loan to buy a typical house.

Personal finance expert Dave Ramsey has given some important advice about making this type of purchase, though, and anyone who is considering buying a mobile home should read it.

Here's what Dave Ramsey says about investing in a mobile home

Ramsey is unequivocal about his position on purchasing a mobile home. Although his blog indicates that this type of property has "come a long way since your grandparents' time," he still doesn’t believe purchasing one is a good idea in the long run.

In fact, Ramsey's blog states that "Mobile homes are a terrible investment because they drop in value super fast -- the same way your car loses value the second you drive it off the lot. Investing in a mobile home isn’t like investing in real estate."

He goes on to explain the mobile home itself is not a type of real property (the legal term for real estate), even though the land that it sits on is. He addresses both mobile and manufactured homes, indicating there are some differences between them in terms of construction, but that the commonality is that they both are constructed on moveable foundations. And he believes that, "If the average person can look at your mobile home and think it came in on a truck, your home won’t go up in value."

Should you listen to Ramsey?

While some recent studies have shown conflicting evidence about whether mobile homes see their values rise as quickly as site-built homes, there is also ample evidence suggesting that Ramey is correct that mobile homes treated as personal property tend to see their worth go down just as cars do.

He's also correct that the mobile homes themselves are more akin to a car than to a home with a permanent foundation with framing. The homes tend to be more formulaic, and as Ramsey explains, they are less able to withstand natural disasters than the standard property. Plus, as Ramsey also warns, mobile homes generally have a relatively short life span of around 30 to 55 years while stick-built homes can last hundreds of years with proper maintenance. While a permanent home can become a valuable asset to leave to loved ones, a mobile home typically cannot.

Still, there may be circumstances where it makes sense to buy a manufactured or mobile home. If you own valuable land you want to live on but can't afford to buy or build a stick-built property, for example, it may make sense to put your manufactured home on the land. The site itself should go up in value over time, and meanwhile you'll be able to live on the property which you otherwise might not be able to afford to do. 

Ultimately, you should consider the specifics of your own situation. But before you buy a mobile home, you should make sure you realize that the house itself is less likely to be an investment that pays off for you in the long run.