Portable Buildings Buyer's Guide - Pricing & Purchasing Tips

Buyer's Guide

Introduction to Portable Buildings

By Dylan Mazeika

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There are two main types of modular construction, also known as prefabricated construction, available: mobile offices and modular buildings. Mobile offices consist primarily of pre-made stock buildings that are typically used by construction companies for temporary office space. Modular buildings, in contrast, are custom-built to a user's specifications.

With both types of buildings, construction of the building takes place in a factory-controlled environment using the same materials utilized for traditional construction. The entire building is not built in one piece; instead, the floor plan is broken up into individual modules that can be shipped on the road. Each module ranges in size from 10 to 18 feet wide to 36 to 76 feet long, with the module width depending on state shipping regulations.

Up to 90% of a building is normally constructed at the factory. Each module is built out with walls, ceilings, carpeting, and wiring. Building modules are then assembled to form a seamless building when they reach the destination site.

Most modular buildings consist of one to two modules and occupy one floor, for a total of one to two thousand square feet. Modular buildings can also be used for much larger spaces ranging in the tens and even hundreds of thousands of square feet and can be three or four stories tall.

This BuyerZone Modular Buildings Buyer's Guide will help you learn how to plan for a building project, what to look for in a seller, and how much you can expect to pay. Then, when you're ready, we can put you in touch with several qualified portable building sellers in your area - for free!

Your grounds, environment, and intended use will have a huge impact on the portable building design you select. As you begin your research, take a few minutes to familiarize yourself with the types available, and how each includes features that enable it to serve a specific purpose.

Portable Building Designs

As with traditional buildings, modular buildings can be used for many different purposes. They can range from portable classrooms to research lab facilities to a medical clinic. Companies in the healthcare, government, education and retail industries often turn to modular buildings for their construction needs.

Unlike traditional buildings however, modular buildings have design constraints. Since the building will be shipped via the road, there are maximum height constraints. Typical ceiling heights are around 8 feet vs. 9 to 10 feet for traditional construction. Companies looking for a building to enclose a much large overhead space (e.g. prefab warehouse, riding arena) will likely fare better with steel buildings.

There are a variety of finishes you can choose for your modular building exterior. They include wood, steel, brick, stucco, aggregate and other exterior siding. You can also customize your exterior with windows, multiple doors, and various roof treatments. Numerous options exist for finishing the interior as well.

As with conventional buildings, you can have your modular building erected so it is flush to the ground or set above ground. To have the building entrance set flush to the ground, you will need a pit-set foundation. You should also consult with a local geotechnical firm to ensure the soil conditions are appropriate for a below-ground foundation. Above-ground foundations will require that your building has ramps and steps to all entrances.

To provide a more custom look, there has been a recent trend to constructing "permanent modular" buildings that require more on-site construction. This translates to having as little as 50 percent of the construction occurring at the factory.

Your next step is to consider the pros and cons of a modular building. Far cheaper and more efficient than a permanent structure, there are a number of additional cost advantages to this form of construction.

Portable Buildings Pros & Cons

The most compelling reason why companies turn to modular buildings is the speed of construction. A standard five thousand square foot building like a medical clinic can be erected in as little as 45 days vs. the 6-month timeframe for traditionally built buildings. Faster construction means that a company can generate revenue more quickly and start paying for overhead costs sooner.

Lower cost

Modular buildings are also less expensive than conventionally built buildings. Where you might pay $100 to $130 per square foot for a site-built medical clinic, modular building pricing can range from $55 to $60 per square foot, including installation. The actual price you will pay for your specific building can be dramatically higher or lower than these ranges. However, you can always expect to pay less than you would for a traditionally built building.

Movable

Prefab modular buildings can also be relocated. This can certainly work to your advantage if you anticipate having to move sites. That way, you do not have to re-invest in constructing another building from scratch, with all its related costs.

Tax benefits

There are also tax savings related to modular buildings. Even if you choose to purchase a modular building, you can benefit from a more favorable depreciation schedule. Traditional building costs are usually amortized over 35 years. Modular buildings can be recognized under an accelerated depreciation schedule of 7 or 12 years, which can be a real unheralded benefit. Make sure to consult your accountant about your specific situation before making a final decision.

Standard designs

The primary drawback of modular buildings concerns its look and feel. If you want a more custom, architectural look to your building, modular buildings are probably not well suited for you. However, it should be noted, that there has been an increasing trend to permanent modular buildings where a portion of the construction is done on site.

Basic modular construction elements like the elevated entrance and somewhat shorter ceilings can make the buildings look less stylish. While there are certainly ways to address these design elements, doing so can increase your overall building costs.

Preassembled

For those who expect to see their building constructed piece by piece, the modular building process can be somewhat disconcerting. Rest assured that modular buildings use the same building materials as conventional construction and must meet all the same federal, state, and local building codes.

It's crucial to find the best seller suited to your specific needs to ensure you get the ideal combination of quality and cost. Be sure to compare the products and services of a number of different sellers.

Choosing a Portable Building Seller

When it comes time to buy or lease a modular building, you can turn to modular building sellers or manufacturers.

Modular building sellers broker most of the buildings sold and leased today. These companies do not build the buildings themselves, but instead lease already-constructed buildings that they hold in inventory or turn to modular builders for their construction.

Building manufacturers known as "integrated seller manufacturers" also sell directly to end-users. While many building manufacturers previously relied on modular building sellers to sell their construction services to end users, some have recently turned to selling to customers directly in an effort to better control their revenues.

It can be difficult to determine whether a company that sells modular buildings is a seller or a manufacturer. Modular building sellers do not readily disclose this information because of the perception that potential customers would prefer working directly with the manufacturer. This concern should not be relevant as long as the seller works with a reputable manufacturer and can properly manage your project.

Both sellers and manufacturers will cite reasons why they are a better fit for end-users. Sellers assert that it is more effective to work with them as they can wield more clout with a manufacturer.

Since a seller will purchase many more buildings from the company than a typical end customer, if a problem were to arise, you would have better representation. In turn, manufacturers claim that working directly with them can reduce the risk of miscommunication, gives you increased control over quality and cuts out the middleman seller, leading to reduced pricing.

In the end, your decision about which type of company you turn to should be based on finding a company that can provide a quality building at a fair price and offer a high level of customer service throughout the buying process.

Portable Building Purchasing Process

Despite the complexity of the final product, buying a modular building is a fairly straightforward process.

Step #1

It starts with an initial call where you describe what your needs to a project manager or estimator. The builder will learn about your desired modular building application (e.g. portable classroom, day care center, medical clinic etc.), the ideal size building you want, and any specific requirements you have for the building. This conversation should help you both understand whether a modular building is the appropriate type of construction for your needs.

Step #2

After this initial conversation, the next step is for the building supplier to develop your building specifications. It can start with a hand-drawn sketch of the building with a rough floor plan. The floor plan then gets fleshed out over the next few days, with details like the placement of windows, cabling, and electrical outlets ironed out.

Step #3

A proposal based on this specification is then developed. If you work with an integrated seller manufacturer, your project manager will turn to the estimating department to prepare a quote for you. Sellers will request quotes from one or multiple modular building manufacturers, depending on whether they have exclusive arrangements, and then choose one to present to you.

Step #4

After you have signed off on a proposal, you will approve the deal by making a down payment. Your project manager will then visit your site to square away details about the site location and building that are needed to draft engineering documents. These engineering documents define the structural requirements for construction. Manufacturers may use in-house engineers or outsource the document creation to an engineering firm.

Step #5

With the engineering documents created and then reviewed by third-party inspectors, actual construction can begin. The building process can take one to three days for a five thousand square foot building. Since the building is created in a climate-controlled environment, factors like sunlight and inclement weather do not restrict the available hours to work.

Step #6

Third-party inspectors will then inspect the completed building modules before they can be shipped to you. Most buildings have a frame, axle and tires attached directly to the module so it can be shipped directly to you by truck.

Step #7

Even though a building may be ready for shipping as soon as a week after you have ordered it, it can take several weeks for the appropriate permits to be issued. Once the permit-related hurdles are crossed, the foundation can be built and the building modules can be delivered and assembled. Most often, you would hire a local work crew to build the foundation and turn to your building partner to handle the building installation.

As with many large purchases, modular buildings may have pricing elements that are negotiable. So we've compiled the price range below based on what BuyerZone customers have recently paid for portable buildings throughout the United States. Plan accordingly.

If you are looking for more details, kindly visit Custom Prefab Buildings.

Portable Building Pricing

As you might imagine, costs for modular buildings can vary quite dramatically from $35 to $200 per square foot. The primary factors that affect price include the building size, material quality and complexity of the buildout.

Portable classrooms and offices, which typically do not have very complex buildout requirements, will fall on the low to mid- end of the scale. Basic medical offices are typically more costly than these types of buildings. On the high end, sophisticated buildings with extensive HVAC, wiring and/or high-end building material quality will result in building costs that fall on the high end of the spectrum.

Pricing also varies according to the region of the country. It can be difficult to take advantage of regional differences however as the shipping costs can be prohibitive.

See what other BuyerZone users paid for their modular buildings.

If you receive multiple bids, be wary of choosing the lowest priced bid. It is critical that you ensure that bids are truly comparable before choosing solely based on price. Compare specifications carefully as one bid can be significantly lower than another as a result of skimping on construction materials. Check that the quality of fixtures, doors, walls, carpeting, electrical and HVAC are comparable. In addition, make sure to include all costs such as installation when comparing bids.

In terms of financing, you can choose to buy or lease your modular building. Consult your accountant about the tax implications of either leasing or purchasing a building before making a final purchasing decision.

A few of our leading national portable building sellers have offered some pro tips on finding the best prefab building - not to mention finding a seller that will meet your needs efficiently and cost-effectively.

Portable Building Buying Tips

• Find out whether the seller will be constructing your prefab buildings or outsourcing construction.


• If you are working with an integrated prefab buildings dealer manufacturer, check how long the company has been selling directly to end- users. Be sure that the company has had a strong track record of handling end users directly to ensure a smooth building process.


• If you work with a seller, make sure to find out which manufacturer will be creating the prefab buildings.


• Do not purchase prefab buildings without a complete set of specifications and defined scope of work agreed upon.


• Read the contract carefully. Make sure the contract does not allow the manufacturer to substitute materials without specifying that they be the same or higher quality than the materials included in the specification.


• Check a builder's reputation. Shoddy prefab buildings construction can be hard to identify, even if you are an expert. Speak with references that have had prefab buildings for multiple years to see how they have lasted.


• Check the seller's experience in building the type and size building you want. You do not want them to learn at your expense.


• Ask about the building quality control and inspection process. Knowing what steps builders take to ensure that the finished product meets expectations will help you minimize the risk of disappointment when the final product is delivered.


• If you are leasing an already-made building, ask for digital photos and inquire about its last refurbishment.

A guide to buying your first modular home

In this modular home buyer’s guide we’re going to show you the 3 most important things you need to consider when making your modular home purchase: Price, Time, & Customization. Read on to see how these factors can make the choice to buy a modular or manufactured home an easy one.

Why buy a prefab home?

Simply put, the decision to buy a custom home built in a factory as opposed to an onsite home makes sense on several fronts. Prefab homes are constructed inside a climate-controlled factory by a team of trained craftsmen with a lifetime of experience bringing each design to life. In every building facility, strict quality assurance, inspection, and supervision at every step of the building process ensures an extremely well-constructed product that meets high code standards for quality, safety, durability, and energy efficiency. Overall quality, design, and appeal are guaranteed to be equal or superior to the traditional site-built home. The bottom line for homebuyers is this: your prefab home will be built exactly as expected and ready for occupancy within weeks, instead of months, and the cost will be considerably lower.

Why is factory-built housing less expensive?

Manufactured homes and modular homes are truly the only form of single family housing that can serve the needs and desires of almost all Americans without sacrificing construction quality or amenities, and at an affordable price that assures value unmatched by any other form of housing. Factory-built housing is less expensive than homes built on site due to the multitude of efficiencies and economies granted by the assembly line building systems that manufactured home and modular home producers utilize. Homes that are engineered by skilled craftsmen within a controlled factory environment result in less material waste and volume building material purchasing discounts. Some of the larger manufactured home building companies may produce up to 4 or 5 homes per day. There are no weather delays and other perils common with site built construction. In short, the savings of building houses in a factory are passed along to the homebuyer.

What is the true cost of building modular?

A modular home shopper will need to secure a lot of information from the manufacturer, the on-site contractors, and building officials in order to determine the actual cost of building modular. The amounts that are most easily attainable will be the manufacturer’s base price for the model chosen and the cost of the land where the home will be built. There are considerable cost differences based on the type of modular home you purchase, primarily dependent on whether the home is built by a traditional manufactured home builder or a modular home only producer. Where you build will also have an effect on your bottom line cost. We will estimate the cost for both types of modular units using a mid-priced, 1,800 square foot modular home with 3 bedrooms and 2 baths as an example. Our theoretical home will be located somewhere in Middle America, where average site-built home prices will be in the neighborhood of $225,000-$260,000.

Price

Land: $10,000 (both modular only builder and traditional manufactured builder) – This price would probably buy you a building-sized lot on the outskirts of a small town in the Midwest, South, or Southeast. This price may buy you 5 acres in a rural area.

Base Home Price: $90,000 (modular only builder) or $65,000 (traditional manufactured builder) – Base prices of both types do not include a garage. A two car garage would add about $25,000 to both total costs.

Customization & Upgrades: $30,000 (modular only builder) or $7,000 (traditional manufactured builder) – Typically, customization and upgrades add about 25% to the sales price of modular only builders’ prices. Modulars built by traditional manufactured builders have a much wider choice of pre-engineered floor plans that will meet homebuyer requirements without additional modifications. Common upgrade options include deluxe appliances, floor coverings, integrating covered porch decks, luxury baths, etc.

Site Preparation: $5,000 (both modular only builder and traditional manufactured builder) – This price assumes a level lot with proper drainage and utilities at the street. A septic system and drilling could add $10,000-20,000 to the total price.

Foundation: $12,000 (modular only builder) or $7,000 (traditional manufactured builder) – This cost estimates a block perimeter system with interim supports above grade with a crawl space and no basement.

Delivery/Assembly/Installation: $20,000 (modular only builder) or $5,000 (traditional manufactured builder) – Modular only builders will require a crane service to lift modules onto the foundation, where they will be positioned and connected by a construction crew to complete the home building process (including electrical, plumbing, and final finish). With the traditional manufactured builder, the home is installed on the foundation, sections are mated together, drywall closed up, and carpet installed. Neither of these prices will include any other site exterior accessories or services such as porch concrete walkways, patios, landscaping, etc.

Fees & Permits: $2,000 (both modular only builder and traditional manufactured builder) – Some state and local housing jurisdictions will have fees that are considerably higher. California has a permit fee structure that is considered to be the most outrageous in the nation. In most California locations, expect building permit fees and requirements as high as $10,000. These fees can include developer fees, school fees, an earthquake foundation system, full house fire sprinklers, and more.

Total Minimum Cost: $169,000 or $94/sq ft (modular only builder) and $99,000 or $55/sq ft (traditional manufactured builder) – Additional features and upgrades such as a garage or covered porch deck, as well as optional interior amenities, will still keep your total investment well below the average price of a comparable site-built home.

Customization

How can I customize my modular home?

Home shoppers are attracted to manufactured and modular homes because of three main advantages over site-built homes. These are:

• Price
• Time to occupancy (weeks as opposed to months)
• Customization that allows their home to be built to their exact desires and needs

The key word in this modular home buyer’s guide is customization. To some, this means having a home built entirely from scratch to match their dreams, while others think of taking an existing floor plan and personalizing it with features that correspond to their vision and lifestyle. The extent of customization has an effect on the total price and often extends the turnaround time from production to move in. Let’s expand on this.

Manufactured and modular homes are examples of system home production using a synchronized construction process. Those systems automate the home building to achieve higher levels of quality and efficiency. Wholesale customization to the basic structure of the home will result in delays and expenses that will not necessarily add value to the home. Most manufactured and modular home builders offer a selection of pre-approved floor plans, sizes, and designs that will match the needs of a home shopper. They also have many customization options and upgrades to suit virtually any taste. These include everything from attached garages, converting a guest bedroom into a study or family room, upgraded floor coverings, state of the art appliances, luxury bath options, exterior designs, gourmet kitchens, integrated covered porch decks…in other words, just about any feature that could appeal to a home shopper.

Where can I get more tips on buying a modular or manufactured home?

Buying a home is perhaps the most important, life-changing decision any of us will make. Understanding the key factors that go into buying a modular or manufactured home will help make it a pleasant and rewarding undertaking. Your journey beings here, at ModularHomes.com! The first step is exploring our Resources section and obtaining the knowledge that will help you find the ideal home based on your needs, desires, and expectations. Read on to see a few practical tips that should be helpful in navigating your journey to homeownership.

Time

Pick the right placement site

The home you purchase or build will likely be dictated by the regulations and restrictions of the town/county in which your property will be located. The first step to picking the right placement site is to go to your county courthouse or city hall and obtain a copy of the zoning ordinances that apply to the area in which you plan to locate your property.

Know which type of factory-built home you want

Here at ModularHomes.com, you will find a wealth of comprehensive information, including floor plans, styles, and construction specifications for almost all builders of HUD manufactured homes, modular homes built by traditional manufactured builders, and modular homes built by modular-only builders. All manufactured and modular homes are built to stringent federal and state building codes that ensure quality construction, durability, and safety. It is important to refer to our article explaining these differences – What Are the Differences Between Manufactured Homes and Modular Homes?

From whom you buy your home is just as important as the home itself

Contacting a manufacturer directly is an excellent way to receive information about the products they build. However, it is unlikely that they will quote a base price. Instead, you will be referred to either an authorized retailer or builder in your local area. There are some manufacturers that will contract directly with the buyer to complete the total building process. It is important that you not only shop the best price for your home but also for the contractor. You can do this by viewing previous similar job sites and testimonials from satisfied customers. Make sure to reference the “What is the true cost of building modular?” section above.

What do I need to know about financing my nem modular or manufactured home?

A completed modular home becomes real estate; in other words, it has all the advantages of a traditional site-built home and more. There are three important advantages that equal or trump site-built homes. First, your modular or manufactured home will be equal and often superior in quality to a comparably sized site-built home. Second, modular and manufactured homes are move-in ready in a fraction of the time compared to site-built. And third, the big plus is that your modular or manufactured home will qualify for financing with the same terms, conditions, appraisals, and low-interest rates as a site-built home. A traditional loan is a mortgage on an existing home, generally for a 30-year term. These mortgages are plentifully available from conventional lenders, mortgage companies, banks, savings & loans, credit unions, etc. Also, they’re available through special government programs like those offered by the FHA (Federal Housing Administration) and the VA (veterans Administration).

A traditional loan does not commence until the home construction project has been completed. You will need a second loan, a construction loan, to pay for contractors as the home completion process continues. These incremental payments are called construction draws. The draw schedule will be determined by agreement with your building contractor. The first draw is usually to the manufacturer to cover the cost of the home incurred prior to delivery to the site. The term of a construction loan is for the predetermined length of time it takes to complete the home setup process. You only pay interest on the monies advanced as you go. When the home is completed and ready for occupancy, your primary lender will payoff (take out) the construction loan which will automatically activate your permanent mortgage. Your construction loan and permanent loans do not have to necessarily be with the same lender.

To learn more about the different types of loans available for prefab homes, and to get a quick rate quote for financing, check out our page on modular home financing.

Still have questions?

If you’re still not sure about the buying process or have additional concerns not covered in this article, get in touch with us! We’d be more than happy to answer any questions you have.

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