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Modular homes hold their value similarly to traditionally built homes. Modular homes are similar in most aspects, and as long as they are well-maintained they will hold and even increase in value over time. 

There are many misconceptions surrounding modular homes and how they hold value. Keep reading to learn how they compare to traditionally built homes in this regard, as well as what can cause a modular home to depreciate and how you can increase their value over time. 

How modular home value relates to traditionally built homes 

The main difference between a modular home and a stick-built house is how they are constructed. When building a modular home, every part is assembled within a factory. Traditional homes are built on-site and can be impacted by weather conditions during the process. 

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Modular construction takes less time, and the homes are set on a traditional foundation at the end of the process. This gives a modular home the same financial rules, affecting: 

• Access to mortgages 
• Access to home insurance 
• Taxes owed on the home 

Modular homes increase in value at a similar rate to traditionally built homes. When you factor in potential manufacturer discounts on these homes, you may occasionally find a higher percentage increase based on the true cost of the home. 

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Depreciation of modular homes 

A lot of the misinformation surrounding modular homes will lead you to believe that this type of home construction decreases in value over time, similar to what is seen with a manufactured home. 

The major difference that proves this wrong is the traditional foundation of the home. Manufactured homes are set on a chassis and designed to be moved whenever necessary. This is convenient, but it opens these types of homes up to develop structural issues over time. 

Modular homes are built on a solid foundation, so they will not run into the same problems. As long as you keep up on household maintenance, your modular home should at least hold value and stay true to market conditions. 

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How to prevent depreciation of modular homes 

If you have yet to purchase a modular home then you should think about whether you are planning on selling it soon after purchase, selling it eventually, or staying in the home. 

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Selling soon after purchase does not give you enough time to upgrade the home, but you can still consider major home value factors, including: 

• Market Momentum 
• Location 
• Style 

If you want to make sure your home sells fast at value, then look to place the home in the suburbs. 

Proper maintenance is essential to preserving the value of any home. Conduct regular inspections, and make sure everything works properly to prevent any issues from growing. 

Appreciation of modular homes 

Modular homes increase in value similar to what you see in traditional stick-built homes. That means, depending on the status of the real estate market, you should see the same highs and lows as other homes in your area. 

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Real estate tends to increase in value over time. However, there are many ways that you can improve on this natural appreciation. 

Modular homes purchased at a discount from a manufacturer will see some of the highest percentage increases based on the initial investment in the home, but you can also upgrade the home to improve its value over time. 

How to increase the value of a modular home 

While staying on top of maintenance is important for holding the value of a modular home, making improvements to the home can increase the value over time. 

This is easiest to do if you are not planning on selling the home soon after purchase. Some ideas for easy upgrades include: 

• Swapping out the manufacturer’s flooring 
• Painting 
• Adding crown molding 

Investing in adding a deck or a garage to the property can lead to an immediate increase in value. These projects can cost quite a bit to complete, but they show an ROI of up to 81 percent. Adding shingles to the roof of a modular home might cost $9,500, but they can add $15,000 to the value of the home. 

Make sure you have purchased the home from a reputable manufacturer with a great record. Potential buyers will look into this to determine the value of the home long-term. This can be a selling point that gives you an edge over the competition. 

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Frequently asked questions 

Are modular homes a bad investment? 

Modular homes are not a bad investment. They might have a higher upfront cost, but they hold their value and appreciate over time. Just as much as a traditionally built home would. A modular home can provide a way to get into your own home faster while still offering value on a resale. 

Is it cheaper to buy a modular home? 

Modular homes are often cheaper to build, but you may see a higher up-front cost because of how they are built. You can also purchase a modular home at a discount more often from the manufacturer, lowering the total cost significantly.