Modular homes are increasingly popular as housing costs soar
and inventory is limited. It begs the question: Are these homes a good long-term investment?
Here’s what you need to know:
What Is a Modular Home?
are homes that are mostly built in a factory before being assembled on-site. In fact, up to 90% of the building process for modular homes is completed beforehand, whereas the remaining 10% is completed at the actual home site.
Modular homes are manufactured and shipped in multiple pieces that are then put together by a team of professionals. They must meet certain federal, state, and local regulations in order to be considered “safe” and pass inspections before and after construction.
How Are Modular Homes Different From Mobile Homes and Manufactured Homes?
While a modular home may sound like what you know as a mobile home, there are some key differences between the two concepts. Technically, the term “mobile home” is used to refer to transportable and prefabricated structures built prior to 1976. The words “mobile home” are often used incorrectly; it’s important to keep the proper definition in mind.
The term “manufactured home” replaced “mobile home” after 1976 due to new building codes, but the main concept remains the same. For starters, these homes are typically assembled off-site before being transported to the home site in one piece.
These homes are also constructed on a wheeled chassis so that they can be transported from one place to another. Finally, manufactured homes are built using different regulations and building standards compared to modular and site-built homes.
Why Build a Modular Home?
So why would someone choose to build or buy a modular home over a traditional home?
Here are some common reasons:
- Affordability: With housing prices through the roof, many potential homebuyers are looking for more affordable housing solutions. Modular homes are often more affordable than traditional homes.
- Efficiency: Supply chain issues have greatly impacted the home building industry. These days, it can take well over a year to build a house from scratch. Many homebuyers can’t afford to wait over a year to move into their new home, which is why modular homes are a popular alternative. However, modular homes and other prefab options can suffer from the same supply chain issues impacting the rest of the industry.
- Simplicity: When building or buying a home, the sheer number of options can quickly become overwhelming. Modular homes offer a more simplified solution where most of the choices and work are already made for you. All you need to do is pour a foundation, add utilities, and choose your modular model.
How Long Do Modular Homes Last?
If you’re considering a modular home based on these benefits, you might also be wondering if they last long enough for the investment to make sense. Unfortunately, there’s no simple answer to this question as it really depends on the quality of materials and construction of the modular home.
In most cases, modular homes are constructed using the same materials as site-built homes. And as you now know, they are subject to many of the same standards and regulations. As a result, you can expect modular homes to last for a long time—over 50 years in many cases.
Are There Any Alternatives to Modular Homes?
While there are certainly advantages to choosing a modular home over a traditional home, there are also disadvantages.
For starters, you’ll need to purchase land to build your modular home on. From there, you’re fully responsible for preparing your home site for the modular home by pouring a foundation and adding utilities, including electrical, plumbing, and sewer.
The financing process can also be more complicated for modular homes since you may need different types of loans to purchase the land and the modular home itself before converting them into a long-term mortgage.
Last but certainly not least, modular homes come with limited customization. When you purchase a modular home, you’re purchasing it as it is. It would be challenging for you to add custom features like French doors, skylights, walk-in showers, fireplaces, extra closets, etc.
Based on these disadvantages, you might be wondering if there are any alternatives to modular homes that are still more affordable than a traditional home but offer more customization than a modular home. Enter: ADUs.
Accessory Dwelling Units (ADUs)
Accessory dwelling units or ADUs are secondary housing units that are located on a single-family residential lot. Some popular names for ADUs that you may be familiar with include granny flats, backyard cottages, and in-law suites.
In reality, your ADU can be whatever you want it to be since they’re completely customizable when you work with ADU designers and builders like Cottage
Unlike modular homes that are mostly built in a factory and are only assembled on-site, ADUs are built on-site from the ground up. They follow the same process as building a regular home.
That’s not to say that all ADUs are tiny. In fact, ADUs can be custom-built with multiple bedrooms and bathrooms depending on your space, budget, and housing needs, oftentimes up to 1,000 or more square feet.
Different Types of ADUs
One choice you have when it comes to ADUs relates to the type of ADU you want, as there are three different types to choose from: detached, attached, and conversion.
Detached ADUs are most similar to modular homes as they are completely separate from the main home and have their own foundation and utilities. And while you might assume that detached ADUs would be more difficult and time-consuming to build, that’s not the case at all. As it turns out, building from scratch is a lot more straightforward than building on.
Attached ADUs are built on from the main home. This is a great option if you’re looking for a housing solution that’s more accessible. This is also a great option if you’re working with limited space and really want to maximize your existing lot by avoiding setback requirements that typically come with detached ADU permitting and construction.
Finally, conversion ADUs convert existing space within a home into a functioning ADU with a separate bathroom, bedroom, and kitchen area. Conversion ADUs typically utilize spaces like garages and basements but can also be made from extra bedrooms with the right design.
The ADU Building Process
A modular home may seem like a simple solution, but building an ADU is easy with companies like Cottage. Cottage is a custom ADU designer and builder that handles everything from permitting to construction, thanks to a network of certified and experienced professionals.
Here’s what the process looks like:
Your ability to build an ADU is based on the current lot as well as state and local regulations. If you’re in California, it would likely be very easy for you to build an ADU on your property
due to recent changes in state legislation.
Localities then have their own restrictions and regulations
. Most places will allow you to build an ADU so long as it fits a certain size, height, and setback standards.
For example, in Los Angeles County, you’re able to build a 1,200 square foot detached ADU under 25 feet tall with minimum setbacks of four feet from the side and rear lot lines as well as six feet from any existing structures.
In San Francisco, you can build an 850 square foot one-bedroom detached ADU or a 1,000 square foot two-bedroom detached ADU under 16 feet tall with minimum setbacks of four feet from the side and rear lot lines.
In San Jose, the allowed size of your ADU is based on the size of your existing lot. However, you may be able to build a detached ADU of up to 1,200 square feet if your lot is larger than 9,000 square feet. If your lot is smaller than 9,000 square feet, you can build a detached ADU of up to 1,000 square feet.
Consultation: Taking state and local regulations into consideration, Cottage will discuss your property and needs with you over the phone and visit in person if it’s a good fit in order to determine the best location for your ADU based on factors like minimum setbacks and utility connections.
Design: Next up is the creative part—design! When you build an ADU instead of a modular home, you get as much say during the design process as you’d like. For instance, you can customize your floor plan based on your needs. You can also customize the exterior of your ADU to match the style and design of the main home. Finally, you can choose your finishes.
Cottage’s ADU designers make the process easy with 3D technology that helps you visualize your plans and make the right choices.
Permitting: Cottage handles everything in regards to permitting. Cottage works to make this process go smoothly by having full architectural sets. You’ll remain updated on the progress of your permits with a dedicated customer representative and an accessible online portal.
Construction: Once your permits have been approved by the proper authorities, your contractor will begin the construction process. All of Cottage’s contractors are fully qualified, vetted, and prepared to deliver your custom ADU. All of their work comes with a one-year warranty on workmanship as standard in the industry.
How Long Does the Process Take?
While each build is different, here’s what you can expect in terms of your ADU building time frame:
- The design stage takes anywhere from two to six weeks, depending on the homeowner’s preference and design needs.
- The permitting stage typically takes two to four months.
- The construction stage typically takes four to six months, shorter if a conversion ADU.
Based on these numbers, your ADU could be completed in nine to 12 months, depending on the size and complexity of the unit.
How Much Does It Cost?
Prefabricated and modular homes may seem like a cost-effective solution. Yet, there are tons of extra costs involved in the building process that you often don’t consider.
Let’s say that you were able to find an affordable modular home for $200,000. However, you also need to incorporate things like engineering, site prep, and utility connections.
Generally speaking, you can expect to pay around $5,000 for site prep, $10,000 for utility connections, and $10,000 for the foundation for your project. At the end of the day, you’re paying $25,000 more for a grand total of $225,000.
On the other hand, when you work with an ADU builder like Cottage
, the full cost of your ADU is included in your estimate. Plus, you get the added bonus of being able to design your home and include the features that you want. So while you’d have to pay around $225,000 for a modular or prefabricated home, you could expect to pay less than $200,000 for Cottage’s all-inclusive approach to ADUs.
How Long Does It Last?
The process of building an ADU is exactly the same as the process of building a regular home—it’s just done on a smaller scale.
As a result, you can expect your ADU to last just as long as a traditional home, if not longer with modern building techniques. This means that you can enjoy your ADU and benefit from it for decades to come.
The Best Home for You
While modular homes certainly have their benefits, they also come with challenges as well. So if you’re looking for a better housing solution, you should consider an ADU instead.