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Apartment Articles


Originally appeared inNew Mexico Apartment Report Vol. 5.2 - Q2’98
Last year the NM Apartment Report discovered some alarming statistics on the current apartment occupancy trend. Although Albuquerque has a net positive absorption of apartments, once “leakage” into other products was accounted for, Albuquerque was losing almost 1,000 tenants per year to manufactured home communities. These communities spend hundreds of thousands of dollars in TV, radio, direct mail, newspaper advertising and even placement of their home catalogs side by side with the Apartment Guide. Since it is unlikely that the owners in Albuquerque will form an advertising alliance to combat this situation, the NM Apartment Report has prepared a one page informational flyer for you to use in the marketing of your community vs. manufactured homes. Manufactured Homes – fact vs. fiction As a current resident of our community, we realize that one of your long term goals may be home ownership. For most Americans, home ownership is the single largest and most like the best investment they will make in their lifetime. In the last decade, home ownership has become increasingly more difficult as substantial increases in prices have occurred. Once considered the scourge of the housing industry, manufactured homes have reentered the market with a new look. Realizing that you might be attracted to this type of home ownership, we thought you might want some plain answers to some common misconceptions: 1. Myth #1- Manufactured Homes cost less on a monthly basis. Although the ability to obtain low interest mortgages for a 30 years provide for low monthly payments, there are other associated expenses with a Manufactured Home Community. If you decided to join 80% of the other purchasers in locating your manufactured home community on a parcel of land that you own (30 to 60 miles outside the city limits), count on the following additional costs: 1.1. Additional gas, insurance and wear and tear on your automobile. If your family drives one car five days a week to work, this adds up to an additional 300 miles a week or 1200 miles a month. Using the IRS average of $.315 per mile this additional commute will cost you $378 (and that does not take into account a weekend trip to town, or the mental hassles associated with a daily commute) 1.2. Every time your kids want to go to the movies, shopping center or to just see friends, you will have to “commute” them that extra distance to their old neighborhoods. 1.3. Unlike apartment living, Manufactured Housing has three additional bills associated with it: property taxes, property insurance and water bills. 1.4. Also unlike apartment living, if you have a breakdown of a mechanical component of your new home, you are responsible for the costs of repair. (Best budget $500 a year for future items like new roof, new air conditioning, new heaters, etc.) 1.5. Although it is true that a portion of the interest that you pay on your house can be deducted, this is only advantageous if your home appreciates in value. Myth #2 – Manufactured Housing appreciates like single family housing. Although some national studies have been done to support this, they have primarily focused their efforts on areas like Sun City where Manufactured Housing parks are common and accepted. To date, no such study has been performed in New Mexico and only history will tell if what was once a depreciating asset will turn the tide to become an appreciating investment. Feel free to reprint this page for your use to battle Manufactured Housing.

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by Todd Clarke CCIM (www.nmcomreal.com/nmcomreal)
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