The Benefits and Drawbacks of Prefab Homes

Guest Author:  Andrew Reichek 

If you can’t find a house you like, you may be tempted to build one yourself. In that case, you’ll have to choose between a stick-built home and a prefabricated home. Stick-built means that your home is built the old-fashioned way, with a crew of workers on site for months raising the home and wiring it. A prefab home, on the other hand, is made up of pre-assembled parts.

Manufactured homes: These homes are built in sections and assembled on-site by professionals and heavy machinery. However, these must adhere to HUD guidelines. 

Kit homes: These homes are much simpler than manufactured homes but share a similar construction and piecing style. In fact, the majority of homebuyers can construct a kit home themselves. 

Modular homes: These homes allow for much more customization; companies will frequently allow you to customize the floor plan of your purchase. Modular homes, on the other hand, have an immovable foundation, as opposed to manufactured and kit homes.

The Benefits of Prefab Homes 

Prefab homes will certainly have a litany of advantages that appeal to many buyers. 

Outstanding Energy Efficiency 

One of the advantages of prefab homes is that they are typically very energy efficient. Their tight seams and cutting-edge windows keep heat in while lowering your energy bills. As an added bonus, the tight construction of modular homes has earned them a reputation for being able to withstand natural disasters. 

Many people will mistake a prefab house for a mobile home. Prefabricated (or modular) homes, like any other, are built on a foundation. They can be high-quality, modern, and elegant homes that are ideal for those seeking a lower carbon footprint than the typical American suburban home.

Fast Construction

Fast construction is one of the big advantages of prefab homes. Because the parts of a prefab home come pre-made, all you have to do is assemble them and hook up the home to the needed utilities. Hence the name “modular.” The prefab goes up much faster because it arrives partially constructed. That means fewer days with laborers on-site and less vulnerability to weather delays and illnesses that can extend the construction process by days and weeks. Still, there’s more to consider than just the construction time. Site preparation, including obtaining permits, can be a lengthy process.

Cost to Build

A prefab home is typically less expensive to build than a comparable stick-built home. Labor savings account for a portion of the savings. A prefab move-in ready home requires fewer laborers working over a shorter period of time. You’ll save money as a result. Furthermore, as previously stated, heating and cooling costs are less in prefab homes than in stick-built homes. If you’re considering purchasing an existing home, compare the costs of what’s on the market to the cost of building a prefab. Also, keep in mind that different levels of fittings and customization can raise or lower the cost of your prefab. Inquire with the manufacturer about the cost-cutting options available to you.

The Drawbacks of Prefab Homes 

As there are benefits to buying a prefab house, there are also disadvantages. 

Costs of Land

If you want to build a prefab home, you must own the land beneath it. If you don’t already own land, you’ll have to purchase it. You’ll also need to make sure that you’re allowed to build a prefab home on that property and that you can connect it to electricity, water, and sewer. 

Don’t forget to conduct soil testing on the property you intend to call home. Land acquisition, inspections, and permits can all add up in terms of cost, time, and trouble. Some prefab home companies will assist you with this process, obtaining permits on your behalf and incorporating their costs into the cost of your modular home.

More Money Paid Up Front 

If you buy an existing home, you can put down around 20% and pay off the rest of your mortgage over time. While many prefab homes are eligible for financing and construction loans, you must pay for the home’s construction before moving in. Your contract will include a payment schedule for you to follow while your home is being built. 

Because prefab homes are pay-as-you-go, you must be certain that you can afford the prefab before committing to purchasing and erecting it. Paying more upfront, on the other hand, saves you money in interest.

Connection to Utilities 

One disadvantage of prefabricated houses is the difficulty in arranging utilities and other facility details. If your site is uneven, it will need to be leveled. Then you’ll have to lay the foundation and arrange for sewer strikes and electrical connections, not to mention connect to city water or find well water. 

If all of this sounds a little overwhelming, look for a prefab home that includes the option to have the prefab home company handle these details for you.

Final Takeaways 

The cost of a prefabricated home will change based on how much you want to do yourself and how much you want to outsource to others. Some intrepid homebuyers prefer to purchase a prefab home as a kit and assemble it themselves with the assistance of a few friends.

 Others are willing to pay a premium to have the details of construction and permitting handled for them. Before you go the prefab route, regardless of where you fall on the gamut, make sure you understand what you’re getting into.

About the Author:  Andrew Reichek is a real estate broker in the state of Texas. His areas of expertise include commercial leases and wholesaling. He writes about related real estate topics that appeal to consumers and professionals in the industry.