One of the top items on the American Dream list is to own a home. For many, that looks like a traditional, single-family house, while for others it could be a condo or apartment. And still for millions more, homeownership comes in the form of a mobile home.
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But according to Dave Ramsey, no one should be purchasing these if they are looking to invest in homeownership. In a post on X, Ramsey explained his thought process behind why it’s not a smart financial decision to purchase a mobile home.
Mobile Homes Drop in Value
Upfront, Ramsey wanted viewers to know that he is not interested in any class warfare when it comes to the mobile home market. He understands that many Americans are in a class where only a mobile home seems affordable.
However, “it’s a simple math thing,” Ramsey said. “[Mobile homes] go down in value. When you put your money in things that go down in value, it makes you poorer.”
Someone looking to break out of the lower or middle class might think purchasing a mobile home will break them into the next level of economic status. Ramsey warned viewers that this is a trap, because mobile homes are a bad investment.
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Not Actual Real Estate
While it might be deemed a dwelling that someone can live inside of, a mobile home is actually not a piece of real estate in the traditional sense. When someone buys a mobile home, they have to put it in a location, which they may or may not own.
That land — or “piece of dirt” as Ramsey called it — qualifies as real estate, which can go up in value, unlike the mobile home itself. In fact, if you are in a highly desirable location, like a metro area, there is a chance you can see your mobile home’s location increase in value, according to Sapling.
“The piece of dirt goes up in value faster than the mobile home goes down,” Ramsey said. “So, it gives you the illusion that you make money. You didn’t. The dirt just saved you from your stupidity.”
Better To Rent
Ramsey went on to say that anyone looking to buy a mobile home should actually consider renting a place to live instead. That’s because someone who rents makes payments every month to get a roof over their head without losing money in the process.
Ramsey explained, “At least [when you rent], you aren’t losing money while you’re paying payments. When you pay payments on a mobile home, you pay payments and you’re losing.”
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This article originally appeared on GOBankingRates.com: Dave Ramsey on Why You Shouldn’t Buy Mobile Homes
