Manufactured Homes In Commercial Real Estate Appraisals: Personal or Real Property?

Commercial real estate appraisers sometimes receive appraisal assignments in which a mobile or manufactured home is included with the property that is being appraised. A mobile/manufactured home is a dwelling which is factory-built and is transported to the site either on its own chassis or on a flat-bed truck. In an appraisal of property which includes a manufactured home, a critical factor to be determined is whether the manufactured home is to be appraised as personal property or real property. Manufactured homes by nature are personal property, and must be permanently “affixed” to the land in order to be appraised as real estate (or real property). Manufactured homes not permanently “affixed” to the land are typically appraised as personal property.

Some manufactured homes are only anchored to the ground, with no underlying slab, and could be removed from the site relatively easily. It is debatable among real estate appraisers and users of appraisals as to whether or not the manufactured home becomes real estate by simply anchoring it to the ground (and therefore, becoming “affixed” to the property). However, when determining as to whether or not a mobile/manufactured home is real estate or personal property, there is yet another factor to consider. When the manufactured home on the site becomes an integrated component of the property in regards to income generating potential, it is considered reasonable by some appraisers to treat it as real estate. For example, I recently appraised a five-acre tract with a manufactured home that was only anchored to the ground, with no slab. The subject property was leased to a tenant who lived in the manufactured home. Of course, the underlying land was considered a valid component of the rent being generated; especially since the tenant had free use of the land. However, without the dwelling, it is possible (and probably likely) that the property may have had very limited income generating potential. For this reason, it was my opinion that the manufactured home on site should be treated as real estate instead of personal property. Nevertheless, for those users of my appraisal who may argue that the home should be treated as personal property, the contribution of the manufactured home’s value was separated from the total value. That way, it’s left up to the client to determine if the manufactured home should be treated like personal property or real estate.