Modular House as a Long Term Rental

[Jason Merchey]

What do folks think of modular homes? Not manufactured, of course, not trailers, I mean like factory-prepped, crane-assembled modular, for about $100 a foot. My thinking was that it would be a quick, reliable, durable house to rent out - compared to a national home builder that I'm a bit wary of. The other options of course are pre-owned or custom-built. I'd have to buy a piece of land as well, of course. 80 day construction process. Am I being suckered by the PR surrounding modular (the controlled conditions of the factory, the overbuilding, etc.) or is this a good way to create a good long term rental property?

[George C.]

Modulars are just fine, in fact their energy efficiency is a huge bonus. The ones I put up came with 2X6 exterior walls & R19 in the walls & low glass everywhere standard. You can add or change the plans for a charge of $50 with the factory I went with. I built my last home, a 3300 sq foot colonial on a a full height walk out basement (12" block) all for $218K, that's without the land or septic system. That works out to about $67 a square foot in NJ.

As far as holding up to tenants, they are the same as any other home out there. If you don't want OSB for subfloors or sheathing, you can upgrade with plywood, I don't see the need...

My $67 a foot includes extras such as, 9' first floor ceilings, wood burning fireplace, high hat lighting, upper tier granite kitchen & bath tops, hard wired for alarm system. The added onsite porch roof & columns are in that price, too. The columns alone were about $13K by themselves. If I was paying retail for it by having it built by another Builder, or for a site built, it would've cost another $100-125K for their profit in there just on the house. I've stick built entire homes with my own two hands before, I don't see the point anymore when I can get just as good for a good price and without breaking too much of a sweat. Now if you ask local tradesmen about them, they'll all badmouth them, sure no wonder? They are losing work to modulars. This one didn't sell back in 09, but it will eventually. I figure to make about $200K profit off it when it does, that's not appreciation, that's just the for bringing the house & land all together and making a package out of nothing...poof.