Making Money on your Mobile Home Investment
Manufactured homes might be the best-kept investment secret in real estate. While many investors struggle to raise funds and pay taxes for a single high-end property, manufactured home investors can make simple money and acquire swift equity on a collection of homes. It’s also easier to plan ahead with manufactured homes since they’re less affected by changes in the economy than other real estate markets.
Investing in manufactured homes is relatively simple if you’ve got cash flow. The first step is overcoming any negative assumptions you might have about manufactured housing, whether you view it as poorly built, or simply too generic to warrant a long-term purchase. The fact is there is a huge market for these homes, with buyers and renters inactivity to enjoy the affordable, flexible lifestyle they afford. Manufactured and mobile homes also look a lot different than they used to – many have features like spacious patios and sun rooms areas that add style to regular living.
Many people also adopt manufactured homes decrease in value over time, but this generally isn’t the case. A manufactured home might double in value over a decade like any other piece of real estate, especially if it comes with property. This brings us to another advantage: investors can maintain a valuable manufactured home property without the high costs and mortgages of a regular home. These homes can also be moved offsite or disassembled at a fraction of the cost of a regular house.
There are a variety of investment scenarios that can generate a high return in the manufactured home market. The easiest and fastest is to simply purchase stock in a publicly traded manufactured housing company, or get involved in a real estate investment trust that specializes in manufactured homes. Another profitable option is to purchase a manufactured home and rent it out. You won’t be healthy to charge as much to rent your mobile home as you would a regular home of the same size, but it won’t be that much less. For example, a $50K mobile home might rent for $600 a month while a $200K regular home rents at about $750 – you’ll be making a comparable return on investment for much less money up front, and smaller monthly mortgage payments. An obvious third investment scenario might be to purchase a mobile home, live in it until the mortgage is paid off, and then sell it – in this scenario you’ll spend much less money on fixes and upgrades before the understanding than you would with a regular home.
Another pleasant surprise of mobile home investing is how swiftly the houses can be paid off. Smaller loans mean smaller interest charges, and faster equity in the home. That also means you can move on to your next real estate investment faster.
