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  #1  
Old 02-06-2008, 10:51 AM
Sharon60 Sharon60 is offline
 
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Default Manufactured Home / Total Economic Life

I am looking for documented information for Total Economic Life of a manufactured home and the estimated depreciation per year. Any help would be a great help.
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Old 02-06-2008, 11:07 AM
stefan olafson stefan olafson is offline
 
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I'd check with the specific builder of the home you are appraising. They can give you their opinion of economic life. Then I'd look at sales of Manuf Homes in the past five or so years and see what you can glean from them. In my area of expertise the market indicates a less than typical life as compared to stick built homes.
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Old 02-06-2008, 11:41 AM
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There a many different methods of estimating depreciation. % by year is s simple accounting type method (call the age/life or straigh line approach). The linear approach is simple but does not recognize reality.

If you're going to appraise manufactured housing you really should subscribe to NADA and learn how to use it. For one thing, it is model specific and depreciation is built into the cost tables. There is even a section which you can use to pluck out an REL. HUD/FHA recognizes this data source and requires it's use for Title I appraisals. The only time anyone has ever argued with me (REL of less than 30 years on an FHA deal) I just cited the section and page number from NADA and the argument ended.
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Old 02-06-2008, 11:50 AM
Sharon60 Sharon60 is offline
 
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Thanks Greg, and yes this is an FHA loan and I am having a battle with the underwriter.
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Old 02-06-2008, 11:56 AM
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What's the issue? REL?

What is the name of the manufacturer, model name, location, year of construction and condition of your subject? I'll see if I can look it up in NADA.
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Old 02-06-2008, 12:03 PM
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Marshall and Swift indicates 30 years for low quality multi section up to 55 years for excellent quality. Average quality is 40 years. For single wides, 20 to 45, with 30 for Average Quality.
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Old 02-06-2008, 04:18 PM
Restrain Restrain is offline
 
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Best way. Look at the sales. How old are the homes being sold, excluding the occasional extreme? At what point are they selling for land value with new units being moved on site? It'll take you about 20 minutes, but it will be time well spent.

For example, I looked at one mfg home development that had homes from the 60's. However, the new sales showed that the homes were being sold for site value and being replaced. Cap of 40 year economic life due to changes in styles, design, appeal and buyer demands.

Hope this helps.
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Old 02-06-2008, 04:37 PM
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I'd give total economic life as 10 years from Ohio north and as long as Mom and Dad live, to the south. No matter how you look at it, depreciation is 50% per year, first four years.
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Old 02-06-2008, 04:45 PM
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Quote:
No matter how you look at it, depreciation is 50% per year, first four years.
Where did you get that?
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Old 02-06-2008, 05:01 PM
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Quote:
Originally Posted by Greg Boyd View Post
Where did you get that?
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