News & Advice

Is a Prefabricated Home Right For You?

February 17, 2020

Image by Michal Jarmoluk from Pixabay

Modular or prefabricated homes are structures that are built in pieces in a factory setting and then shipped in pieces to a lot. Then, the pieces are assembled into a single structure. For decades people looked down on modular homes as less desirable than stick-built homes, or homes built entirely or mostly on the lot on which they will reside. However, in recent years the prefabricated home business has grown leaps and bounds, and the structures themselves have come a long way. While there still are people who regard prefabricated homes with disdain, many have found this to be their best option for building their home haven. Read on to learn about the pros, and some cons, of opting for a prefabricated home.


  • Quality
    • Modular home manufacturing has evolved in many ways in the last decades to the point where the quality is now comparable to stick-built homes. Furthermore, prefabricated homes are sometimes better quality than stick-built homes. This is largely due to the fact that prefabricated homes are built inside a factory, which protects the materials from the elements. Stick-built homes are at the mercy of the weather conditions where they are constructed. Rain, snow and other extreme weather can damage lumber and other building materials if they are not adequately protected. Meaning, it depends on the competency and work-ethic of your builder whether they take necessary precautions to protect the materials. If they don’t, the neglect can result in a lot of structural and foundation problems, which typically aren’t discovered until years down the road. On the other hand, modular homes are constructed in regulated settings indoors, so they are not as vulnerable to the weather. Also, if your idea of modular homes is akin to military dorms, you might be surprised to see how far designs have come. They now often include features like vaulted ceilings and roof decks which you might be able to find premade and ready to ship!
  • Expenses
    • Modular homes typically are less costly to build than stick-built homes. This is because your home is one of several being built by the manufacturer who experiences less down time between construction. In addition, on average the home takes less time to construct on the lot so you don’t have to pay for a full crew for the length of time it takes to build a stick-built home. Furthermore, you won’t have the same unforeseen expenses that arise from stick-built homes. For example, when building a home completely on the lot it will reside, you have to coordinate the transportation and delivery timelines from various manufacturers for materials like lumbar. If there is a delay in delivery from even just one manufacturer, your expenses could increase exponentially while you’re on standby. Modular homes don’t have these same risks because the modular home manufacturer likely keeps supplies in stock so there are not unforeseen delays. Even better, you might be able to get financing through the modular home manufacturer with more favorable terms than other lenders. All in all, this means that you typically will spend less constructing a modular home than a stick-built one. 
  • Value
    • It is necessary to make a distinction here between modular homes and mobile homes. Mobile homes have also come a long way in terms of aesthetics and construction quality, but they still have low resale values. However, modular homes are more comparable to stick-built homes in terms of resale value and durability. Modular homes last longer and resell for more than mobile homes and it is important to understand the difference.


  • No Customization
    • Modular home manufacturers typically offer various options for design, layout and size of their homes for offer. At the same time, they typically don’t have options for customization as their business model is built on the idea of quickly and efficiently constructing homes and sending them out for assembly. So you will not have nearly as many options for customization that you would when building a stick-built home. 
  • Land cost and restrictions
    • In addition to paying for the modular home, you will also have to purchase a piece of land for the home to reside. Furthermore, you will need to factor in costs for land development like septic systems, for example. Also, you will need to ensure your land allows the building of modular homes. Many neighborhoods have restrictive covenants banning modular homes due to their perceived inferiority. These bans often were often instituted when modular homes were built with unappealing roof lines and aesthetics, so the fear was these types of structures would lower property value for the neighborhood. While modular homes look much better than the army barracks they resembled back in the day when these restrictions were popular, you will still need to check first to make sure you can erect a prefabricated home on the piece of land you wish to purchase. On the other hand, if you opt to place your home on a mobile park, you will most likely have to pay monthly rent without the option to own the land.
  • Potential resale issues
    • While real estate professionals understand that modular homes today are of comparable, and even better, quality than stick-built homes, the average home shopper may not be as informed. While browsing homes online, the information that yours is a modular home might turn them off. This could result in less prospective buyers considering your home, although much of this risk can be negated by an experienced real estate agent who understands how to market  your property.

Prefabricated or modular homes are an option that is definitely worth exploring if you intend to build a house. However, they do come with their own risks or considerations. As with all things, do your research and evaluate all your options to decide which type of home is best suited to your long and short term goals.

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