remaining economic life of a manufactured.

[bubba31]

just getting started in appraising and had a question.

I have been told that manufactured homes have a lesser REL than stick built.

1) is this true? Or is this myth?

2) is there any evidence as to what the REL of a manufactured home would be?

just starting out in the business and any help is appreciated

 

[Scott R Marshall]

just getting started in appraising and had a question.

I have been told that manufactured homes have a lesser REL than stick built.

1) is this true? Or is this myth?

2) is there any evidence as to what the REL of a manufactured home would be?

just starting out in the business and any help is appreciated

First off, it would not be REL but TEL as in "total economic life". Secondly, in answer to your question, yes in general terms a new manufactured home will have a shorter economic life than a new stick built home, all other things being equal although I have seen some stick built homes that would make you wonder if the above statement is true.

As for a total economic life number, its a bit hard to say but I would say that on the low end you're looking at 30 years and on the high end 45, maybe a bit more but I rarely see any manufactured home from the late 1970's to earlier 1980's worth much more than the land if they have not been well maintained and updated over the years.

 

[bubba31]

i neglected to mention the home was delievred and erected in 1988. Also, overall condition is rated average, imo

 

[Mr Rex]

I would recommend that you take a look at the depreciation section in the Marshall and Swift Residential Cost Handbook. Multi section manufactured homes TEL ranges from 30-55 based on quality. Average quality is 40 year TEL. However, this doesn't mean that an average quality manufactured home built in 1988 has only 17 years REL, as you must factor in ongoing maintenance, updating etc that reduces the effective age. M&S also has a nice Life Cycle Chart that illustrates why and how most homes exceed their initially estimated TEL.

 

[LordofTexas]

Think of it in the Three Little Pigs vein. Trailer/MFH= 1st little pig. Nuff said, oink.

 

[Jo Ann Meyer Stratton]

The HUD building code was first adopted June 15, 1976, updated in 1994 and again in 2004. After that bad hurricane in Florida about six - seven years ago, I saw some photos of subdivisions with a mixture of site built and manufactured housing. The manufactured homes were still standing and the site built piles of kindling. They are designed to go down the freeway at 75 miles per hour. I have seen 50 year old well maintained mobile homes. Use the Marshall & Swift schedules or depending on quality of construction use the M & S for site built homes. Manufactured homes can range from a "Yugo" to a "Rolls Royce" in quality.

 

[Terrel L. Shields]

One dilemma you may encounter is in using the NADA CD or book. They typically give you sales pricing but not TEL. Therefore, if you vet the cost new of a similar unit to obtain RCN (replacement cost new), subtract the difference and divide by the age of the unit, you are likely to find the calculations make no sense...literally indicating the decline in value suggests a 15 year life.

The issue is that depreciation in manuf. housing is frequently not straight line (expotential decline in value) rather is a hyperbolic decline, losing tremendous amount of value over the first years of life, then leveling out.

While few stick built homes have true straight line depreciations, over a short span the decline is basically straight. In Manf. homes, it very clearly isn't, especially in years 0 - 10. After that condition is so important you've feeling ahead in the dark.

Frankly, I don't know anyone who puts out a truly meaningful residual table for manf. housing. But in general for all construction, the total economic life is often a function of the quality of the original construction. Better homes simply last longer all other factors being equal.