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If A Googler Lives In A Mobile Home, Why Complain About Living Costs?

Updated: 01/20/2022 by Financial Samurai 74 Comments

Only 10% of the population makes more than ~$113,000 a year, but if you live in the San Francisco Bay Area, it seems as if everybody is making six figures or more due to sky high housing prices. Let’s hear from my friend Chris, who so happens to make a healthy income working at one of the world’s most valuable companies. He also owns a mobile home!

Sam recently dropped by for a visit to Google, where I’ve been working for the past 4½ years, and we got to talking about the cost of living in Silicon Valley. All of my friends who live in other parts of the country are buying their first starter homes, and I earn good money at Google.

My wife and I really wanted to buy a house, a nice place with room for our growing family, but the thought of putting everything we’d saved into a million dollar fixer upper just didn’t make much sense to either of us.

Ownership Economics Of A Mobile Home

dropping off mobile home
Half a mobile home being delivered

When we found out that we were expecting our second child in 2013, our 1100 sq ft apartment ($2400 per month) in Mountain View started to feel too small. But 3 bedroom apartments in Silicon Valley were $3500 or more per month ($42K+ per year after tax) and that would require us to save less while building no equity.

The choice was more space, but a significant hit to our finances or less space with an infant and toddler. Or, maybe we should move farther away from the office so that we could get something cheaper, but my commute time would go up, which would mean less time with the kids.

We started doing research and arrived at a non-traditional solution to the problem, which got us a bigger single family house with a yard, saved us money, and allowed us to build equity while not increasing my commute time. How?

We bought a trailer, AKA a mobile home, AKA a double wide.

Our house was delivered to a little plot of land in a mobile home park in North San Jose, direct from the factory in Sacramento, on the back of two semi-trucks. Each half was put on stilts, pushed together, and then the seams covered up and patched.

Are we nuts? Maybe, but here is the logic behind our non-traditional decision.

Why We Bought A Mobile Home

First Day In Mobile Home
Chris and family in their new home

1) Our home is brand new, no one else has ever lived in it, and it came with an 18 month new home warranty. It’s also bigger, 1604 sq ft, with 3 bedrooms and 2 bathrooms.

2) We spent $225,000, which seems like a lot when compared with the home values across the country, but in Silicon Valley, $225,000 is cheap. It’s hard to even find a studio for $500,000 these days. And we don’t need to do anything to it beyond the normal maintenance that any home requires.

3) We still have to rent the land, which at around $1000 per month is not cheap. But, when you combine our mortgage and rent payments (including utilities), we are still paying less than we were in Mountain View for a two bedroom rental for $2,400. And we are earning equity. Oh, and because we live in San Jose, we have rent control so we know how much our rent will increase each year.

4) Rising home values in Silicon Valley are also raising the values of mobile homes. We didn’t buy the home as an investment, but our realtor tells me that our home would list at $325,000 now, a gain of $100,000 in just 18 months.

Living room in a mobile home

5) When you walk into the house, you don’t know you are in a trailer. We have flat 9 ft ceilings, modern appliances, granite counters in the kitchen and both bathrooms, and the same plumbing, insulation, and windows that you find in a normal modern home. And, for the first time in our married life, we have laundry in our house which makes a huge difference when you have little kids.

6) We aren’t going to be here forever. Both my wife and I don’t want to permanently settle in California. If we were going to be here for another 10+ years it would probably make more sense to establish more permanent roots. But we don’t expect to be here longer than another 5 years, and probably even less than that. We plan to move to a cheaper part of America where we grew up.

Yard in a mobile home

7) And finally, we get to do whatever we want to our home. Want a different color paint on the walls? How about running some wires for surround sound up through the floor? Can we have a gas or charcoal BBQ grill on the patio?

We don’t need to ask anyone for permission to do these things anymore and we don’t have to worry about the kids making too much noise for the neighbors. Freedom is a great feeling.

Sam wasn’t convinced until I walked him through the logic. Most people I talk to about it still think I am crazy, but we are happy with our non-conventional solution. And we are spending a lot less per square foot than anyone I know.

RECALIBRATE YOUR EXPECTATIONS (Sam)

Double Wide mobile home
Connecting two halves of the double wide together

I first started this article with the approach that if a Google employee can only afford a mobile home, then everybody else is kind of SOL. But what I realize now is that life is about choices.

Perhaps the real reason why people can’t afford to buy real estate in expensive areas is because people are shooting way too high. After only 5 – 10 years of work, some think they deserve the 2,300 square foot, 4 bedroom, three bathroom home on a quarter acre lot. Unfortunately, if you don’t have at least $400,000 for the downpayment, you just can’t afford a $2 million+ home in Palo Alto, CA. Shoot lower!

I admire Chris and his wife for choosing to keep lifestyle inflation under control. They bought a mobile home they could comfortably afford while shunning the trappings of a richer lifestyle. Surely, many of his colleagues are multi-millionaires living in multi-million dollar homes driving Teslas into the office every day. It’s hard not to get influenced by others.

Related: Why The Housing Market Won’t Crash Any Time Soon

Invest In Real Estate Wisely

If you don’t have the downpayment to buy a property, don’t want to deal with the hassle of managing real estate, or don’t want to tie up your liquidity in physical real estate, take a look at Fundrise, one of the largest real estate crowdsourcing companies today.

Real estate is a key component of a diversified portfolio. Real estate crowdsourcing allows you to be more flexible in your real estate investments by investing beyond just where you live for the best returns possible. For example, cap rates are around 3% in San Francisco and New York City, but over 10% in the Midwest if you’re looking for strictly investing income returns.

Sign up and take a look at all the residential and commercial investment opportunities around the country Fundrise has to offer. It’s free to look.

I also really like CrowdStreet, because it focuses on individual properties in 18-hour cities. 18-hour cities have lower valuations and higher growth rates. You can use CrowdStreet to build your own select real estate portfolio.

Fundrise Due Diligence Funnel
Less than 5% of the real estate deals shown gets through the Fundrise funnel

Shop Around For A Mortgage

Check the latest mortgage rates online through Credible. Credible has one of the largest networks of lenders that compete for your business. You can get free, no-obligation quotes in minutes. The more lenders compete for your business, the lower your rate. Mortgage rates continue to be near all-time lows. Take advantage before they go up further.

Living costs are going up, partly thanks to inflation and growing demand. Therefore, to keep living costs down, everybody needs to invest and keep their debt levels manageable.

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Filed Under: Budgeting & Savings, Real Estate

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

Order a hardcopy of my new WSJ bestselling book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. Not only will you build more wealth by reading my book, you’ll also make better choices when faced with some of life’s biggest decisions.

Current Recommendations:

1) Check out Fundrise, my favorite real estate investing platform. I’ve personally invested $810,000 in private real estate to take advantage of lower valuations and higher cap rates in the Sunbelt. Roughly $160,000 of my annual passive income comes from real estate. And passive income is the key to being free.

2) If you have debt and/or children, life insurance is a must. PolicyGenius is the easiest way to find affordable life insurance in minutes. My wife was able to double her life insurance coverage for less with PolicyGenius. I also just got a new affordable 20-year term policy with them.

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Comments

  1. Clyde says

    January 20, 2022 at 10:32 am

    I’m 65 and retired with more or less 12 million dollars (the market gos up and down). I did this with only a high school education. Before I bought my first house, I lived in the cheapest rentals to save money for a down payment. Live cheap and save for that first house! Then I did the move up to a nicer house (the American dream), over the years. Then about 30 years ago I realized that every house I had sold in the past to move up, was now worth much more. So I never sold another house and just used reasonable financing on my current home to buy more homes without ever selling. I bought 4 separate properties after the 2008 melt down! the I bought things and traveled with my money, but I always separated my money into a fun money pile and and an investment pile. You need both ! I hit it big buying Nividia stock 15 years ago. I have about 6 million in stocks and 6 million in real estate. It’s not that hard to make money in America, but it does take time and effort.

    Reply
  2. roy stacey says

    November 9, 2015 at 3:31 pm

    Q 1. Voted OTHER. First off in a HIGH COL areal I would believe I am a ‘temporary worker only’ and would not settle there. As such, I would rent the cheapest hovel I could find, bank the rest until such time as I could accumulate enough o’FU’ money to leave, and relocate, or retire to do as I see fit. When I worked in Chicago (a high COL area to me) that is exactly what I did. L:after on, circumstances changed, a relocation 1st to Detroit, then Buffalo, and finally to Madison, WI. There, enough cash allowed for purchase of a nice ranch home until we moved further north but what we wanted worked from the home until retirement.
    Certainly, everybody’s mileage will vary as their aspirations and expectations may not be in line with mine.
    No question CASH power gives one more choices that is all, but often that is all one needs!

    Reply
  3. Larry says

    October 24, 2015 at 8:56 am

    I never considered a trailer. In my mind, mobile homes and trailer parks are still associated with low-lifes and crime. We have a trailer community in my middle-class Long Island town and it’s not even marked with a sign from the main road that feeds it; it’s as if they don’t want people from the outside to know it exists. Obviously from the article and comments, there is a wide diversity of mobile home communities and some may be highly desirable. I chose instead to buy a condo in what’s called a converted garden apartment complex; I live alone and bought 800 sq. ft. for under $100K some 27 years ago. It’s fine for my needs, it’s kept its value, and while others are busting their humps trying to making $3K mortgage payments or more each month, I am paying just a few hundred a month plus maintenance and could retire my adjustable mortgage in a month or two if I were so minded. But why bother when interest rates are so low?

    Reply
  4. Randy says

    October 22, 2015 at 9:15 pm

    12 yrs ago we were really restless for a different house and went shopping. We found buying that buying a new home would double our mortgage with a proportional property tax increase. While thinking it through we realized we could spend 20% of our current home’s value on a full remodel (roof, exterior paint and every surface and fixture in the house) and be 80% satisfied. In twelve years the property tax savings offset the the total remodel cost and the windfall savings was not having twice the mortgage. Bottom line–retiring in December with our home paid off and housing is less than 5% of our net worth.

    Reply
  5. Eric Shun says

    October 22, 2015 at 3:19 pm

    “We bought a trailer, AKA a mobile home, AKA a double wide.”

    I think what they bought is called a pre-fabricated home. My Dad bought 950 sq. ft. pre-fab and put it on a quarter acre in southwest FL in 1995 for a total of $80K including the land. He turned down an offer of $250K in ’05 and ended up selling it in 2010 for $125K.

    Reply
  6. andy says

    October 22, 2015 at 11:45 am

    I make enough money that I make more than 95% of the people in my town. The only way i see fit to go into a 1.2 million dollar home is to put down at least 700k cash.. i wouldnt be happy knowing i have a million dollar mortgage. One slip and the fall is a hard one. My mortgage is about 3k and i want to lower it down to 1800 if not less. If you make 20k a month but have a mortgage of 8k or more you are house poor.

    Reply
  7. The DeLeon says

    October 21, 2015 at 5:10 pm

    I have talked many times with my significant other about how much space we need. We have both come back that 1200-1500 sqft is all we need. The area we live in is somewhat affordable with a starter home in the $350-$400k. For us though we are in no rush and we have been talking about moving into a tiny a house for a while or even a mobile home like Sam did.

    It is all about choices. I can live 20 minutes from work and spend $1200 a month for a 1 bedroom apartment or 5 minutes from work and spend $1800. One sacrifices time but sometimes that is okay. So many other friends I have complain about the cost of living and how expensive the area is, but they are also out every night for happy hour and every weekend going to concerts. It all comes down to trade offs.

    Reply
  8. Todd Guthrie says

    October 21, 2015 at 10:10 am

    Now I know how much it costs to buy a trailer in San Jose.
    I wonder how much someone would pay to rent one.

    I think renters are typically much less snobbish about construction type than owners, and they would probably assign a smaller discount to the trailer lifestyle.

    What sort of investment return could one achieve buying trailers in high-cost metro areas and then renting them out to people?

    Maybe if I become the President of the HOA, and also consult a Structural Engineer, then I could even stack the trailers and create a low-cost modular apartment building for exceptional ROI?

    Reply
    • Chris Johnson says

      October 21, 2015 at 1:36 pm

      You aren’t the first to think this, but unfortunately this is not allowed, at least in California. The people living in the home must be on the lease (and on the title) with the mobile home park directly.

      Reply
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