Several myths surround the issue of prefab homes. One myth that has been making rounds is that prefab homes lose value over time.
Factors That May Make a Prefab Lose Value
The locality in which a prefab house is located plays a key role in determining its value. If you buy a prefab house in a location that is depreciating or appreciating so slowly, then the house will automatically lose its value and vice versa. The myth may have been brought about by the fact that the majority of prefab homes are situated in rural areas where land appreciates at a very slow rate.
- Age of the House
Another important factor that may lead to the depreciation of a prefab home is its age. Just like any other traditional site house, the age of a house plays a critical role in its price. Very old prefab houses have a low or depreciating value, unless very well maintained. Old prefab houses are deemed to have out-of-date features like the roof, floor, fittings, and HVAC systems. Since every house gets old with time, the much you can do about this fact is to maintain the house with up-to-date features and fittings.
- Quality of the House
The key contributor to the depreciation of a prefab house is low manufacturing standards. If a prefab house is constructed with low standards or its quality was tampered with during transportation, do not expect its value to increase going forward into the future. If you want your house, on-site or prefab to appreciate together with the land on which it sits, you have to ensure it is built to the highest standards possible. Even after the construction, you do not stop at that, you have to bring it up to date.
How to Prevent Prefab Homes from Depreciating
No matter their quality, prefab houses can still depreciate. So, how do you avert the depreciation and turn it into an appreciation?
- Maintenance is Key
It does not matter what type of house it is; but if any house is not well maintained, it will start depreciating and will eventually lose its value. Under-maintained prefab houses have out-of-date and torn features and fittings. Renovating the roof, updating lighting fixtures, furnishing the floor and cabinets, and changing the shower are some of the updates you can do to a prefab house. Most of these changes are very cost-effective and translate to an over 80% increase in the resale value of a prefab house.
- Buy Land in the Right Location
The greatest consideration you have to take into account when buying a prefab house is the location of the land on which it sits. Is the land accessible, where is the land, how is the neighborhood? Are some of the many questions you have to ask yourself when buying a home. This way, you can determine if the house will appreciate or depreciate and by how much within a given period.
- Ensure the House is Built to Standards
Although you have to do your due diligence in ensuring the high quality of a prefab home, this is not a major concern. This is because prefab homes are built in a factory with a climate-controlled environment that allows for the highest standards. During transportation, highly sophisticated equipment is relied upon to deliver the house in the same standard it left the factory.
Whether a prefab house depreciates or appreciates also depends on who you buy the home from. Being built in a climate-controlled environment is not a guarantee a prefab house will always meet the standards. Just like any industry, most manufacturers are so good but there are still some quacks. Verify a manufacturer’s credentials and portfolio when buying a prefab house.