Question: Hi Luise: Unique name! I’m considering buying a Breckenridge den model 40′ park model trailer, fully furnished including a large screen room (sunroom without windows), a small shed all appliances, a furnace, and a/c. I was wondering how to calculate depreciation value on such a home and if there is a strong or weak market for these units. Thanks, M.
Answer: Dear Mike: there’s a story that goes with that name! 🙂
OK, a great deal depends on where you are going to locate and how popular the units are there. Park models depreciate like vehicles instead of appreciating like stick construction. I’m sure you know that. So your first consideration would need to be having it surrounded by like units in a desirable area…preferably a highly rated park of some kind.
Where I live, Washington State, a good unit like you are considering (that is well-maintained) often holds its value despite the Blue Book for several reasons. First of all, new units continue to cost more each year and that’s helpful when looking at resale because the price you paid for it new can become the “used” price as time goes by. Also, they seem to do well in any economy. When things are going well, they sell as vacation homes and when the economy takes a hit, they do well as more frugal primary residences, if that is legal at the location selected. (In my favorite camping club, people buy two memberships to cover this issue, so that needs to come under consideration.)
Calculating depreciation can be pretty creative under such circumstances where supply and demand may be a better measure. Talk to people who own one and those who have bought and sold. Also talk to park managers and staff. Talk to banks and accountants. Blessings, Luise