You might think a retirement village is the most common residential option for retirees. Manufactured Home Estates (MHEs) are less well-known, but they could be more affordable.
More Australians are considering living in a manufactured home when they retire, and you might too. Here’s why.
What is a manufactured home?
Manufactured homes are dwellings that are not permanently attached to the land. These houses are designed to be moved from one site to another. They’re factory-built, with metal frames and tie-downs instead of a fixed foundation.
In recent years manufactured homes have become more luxurious and permanent. Now there are whole ‘parks’ (MHEs) purpose-built for manufactured homes, targeted towards the over-50s age group. These parks are run by owners or managers, and residents rent or buy the manufactured home and not the land it stands on.
What is the difference between a mobile home and a manufactured home?
Manufactured homes are factory-built structures, not permanent and are later transported to the site. These required metal frame structures and are designed with tie-downs instead of a fixed foundation. The same features also go for mobile homes, but it is already obsolete according to Housing and Urban Development (HUD).
Mobile homes were built before June 15, 1976, while manufactured homes are built afterwards and continue to grow until the present. Both types are regulated by the HUD and built according to federal government construction codes.
Why are manufactured homes so cheap?
MHEs have become popular because of their up-front affordability. They are mass-produced on assembly lines, so the production cost is low.
In mid-2018, the median housing price in Australia was $802,077. A retiree needs to pay about 20% less on a manufactured home as of 2018, although the average listing price varies from state to state. In South East Queensland, you could buy a second-hand manufactured home for around $100 000.
However, manufactured homes can be pricey too. They’ve been known to be offered for over $800 000 in Australia.
|CITY||MEDIAN HOUSING PRICE||MHE AVERAGE LISTING PRICE||PRICE DIFFERENCE|
Residential parks for manufactured homes
There are different types of residential parks where manufactured homes are built:
- Purpose-built – This type of park is a site for caravan or manufactured homes in which people aged 50 and above often live.
- Tourist – Residents of this site are mixed since converted caravan or manufactured homes are either occupied by owners or tenants.
- Mixed-use – Manufactured homes, holiday cabins, converted caravan sites, and tents in this kind of park offer short and long-term rentals.
Benefits of owning a manufactured home
Australian retirees might sell their family house to buy a manufactured home, which might only cost half of their estate’s value. This would give them extra money for investments, travel, or future care services.
- Cheaper entry and living costs
- No additional taxes or stamp duty for manufactured home estate purchase
- No government and entry/exit fees
- Access to Commonwealth Government Rental Assistance for owners aged over 65
Accessibility and community values
- Safety and security within the gated site
- Social and community activities and facilities
- Build friendships with same-age neighbours
Ownership and legal security
- Residents van improve the structure or caravan since they own it
- Homeowners are protected by government legislation like Victoria’s Residential Tenancy Act or the Residential Land Lease Act in NSW
The Cons of Manufactured Housing Estates
There are important things to consider before buying into an MHE.
Firstly, make sure the MHE is not set in an area prone to hazards like flooding or bushfire. Some Australian MHEs are set in hazard-prone areas, especially if they were once caravan parks.
Make sure your MHE is near enough to local amenities and services. You might not want to live miles away from the nearest shops, especially if you won’t have your own transport!
Finally, relocatable homes depreciate faster than normal houses. If you live in your manufactured home for 20 years it will have minimal value left. This leaves you with few assets with which to access residential aged care, if needed.
Crunch your numbers. You could find MHE living is actually less affordable when you compare the purchase price of your manufactured home plus site rental over 20 years, compared with living in a conventional house or retirement village. Make sure you’ll be able to afford to relocate if necessary.
The Manufactured Homes (Residential Parks) Act 2003
The residential parks industry is permitted and regulated under the Manufactured Homes (Residential Parks) Act 2003. MHE owners or operators must abide by this Act.
If you’re considering a manufactured home estate as a retirement option, it’s best to read on up laws on residential parks. Know your rights and the responsibilities of the government and park owner.
A manufactured home in an estate is just one avenue to explore when considering retirement options. It could be worth a look – just make sure it’s right for you!
Receive the latest news and tips when you sign up for our newsletter.