Benefits of Mobile Home Investing
Many advantages come with investing in mobile home properties, starting with the higher overall occupancy rates. Mobile homes are much more affordable than apartments and single-family homes, drawing in more people who can’t afford the more expensive options.
Mobile home investing is also less risky overall. Because they’re not as expensive as other real estate, you can invest more. This helps you spread your risk out over a wider area. If one person cannot pay rent, you have other units to fall back on.
Speaking of cost, mobile homes are incredibly affordable. This makes them a good idea for first-time real estate investors who don’t have much cash flow yet. The next benefit is that your mobile home will depreciate over time.
This could sound like a bad thing, but it’s good. You can get a tax deduction on a portion of your depreciated real estate value.
That means less money owed when tax season rolls around. Lastly, the construction process on mobile homes is fast and easy. Compared to traditional homes, years, mobile homes can usually be set up in under three months.
Drawbacks of Mobile Home Investing
Sadly, there are some drawbacks to mobile home investing as well. For starters, land can take a lot of work to come by when building a mobile home park. Ultimately, this depends on where you’re situated.
But if you want to set up in an urban area, you’ll likely encounter expensive land prices. What’s more, some states prohibit mobile home construction in certain areas. So, you should research to see if this applies to you.
Next, you might have a more challenging time finding suitable financing. Banks tend only to give mortgages to permanent structures. So getting a loan might be a challenge. Next, mobile homes don’t have much long-term value.
And while this is fine for taxes, you shouldn’t expect it to increase in value over time. Lastly, there’s a limited selection of designs. You can still do a lot to make a mobile home look unique. But, for the most part, you’ll be working with many of the same frames.
Is Mobile Home Investing Right for You?
Whether or not mobile home investing is right for you depends on a few factors. For starters, you should have enough capital to get started. We mentioned that mobile home investing isn’t as expensive as on-site homes.
That said, it will still take a lot of funds if you want multiple units. Don’t bite off more than you can choose. You might be in trouble if you rely on tenants to make loan payments. You should also look around where you’re living to see any good options.
Remember that creating mobile homes in an urban area will be a lot harder and more expensive than in rural parts. Lastly, decide whether or not you want to be interacting with your tenants.
If you don’t want to work as a landlord, you will need to find a property management company that can take over the day-to-day operations.
Mobile Home Investing Myths...
What do you genuinely know about mobile home living? Most people only know about the tired, insulting, and inaccurate tropes and stereotypes about mobile home parks unless you live in one.
There is a pervasive and unfair stigma attached to mobile homes and mobile home parks.
But there are many benefits to living in a mobile home. But the best benefit may be living in one.
Mobile home parks are as safe as suburban communities or multi-unit apartment complexes relative to management efficiency. A mobile home community can be a great place to live and raise a family.
Many mobile home parks are strategically marketed as safe and affordable communities for raising children.
There are currently over 332 million Americans living in the United States. However, over 17 million Americans live in mobile home parks. That is the equivalent of around 5% of the American population. That is a lot of Americans living in mobile homes. Some mobile home industry experts believe that as many as 22 million Americans live in mobile home parks.
And mobile home rentals are projected to increase in the future. Many industry insiders believe that mobile home rentals could become the new affordable housing in the near future. In other words, more people will be renting mobile homes in the future.
But what if you have no plans to ever live in a mobile park, no matter these positive statistics? Well, you could start investing in mobile homes.
Mobile home investment is one of the most criminally underrated and unknown investment opportunities in the United States. Mobile homes are probably the least volatile, most profitable, and stable of the various asset classes.
You are more likely to generate a reliable and stable passive income revenue and quicker returns with mobile home investments than with other forms of real estate.
There are numerous advantages to investing in mobile homes.
There is a much lower entry price for investment relative to traditional and commercial real estate. And a mobile home investment is an easy way to begin strategic diversification of your financial portfolio.
You can start learning about mobile home investment by consulting a real estate agent, gaining access to Multiple Listing Services via cooperation with real estate professionals, or consulting with mobile home construction professionals.
So, let’s talk about the primary advantages of investing in mobile homes. Firstly, let’s talk about the mobile home and what it is – after all, you should have a comprehensive understanding of the things you invest in.
Contact Home Nation today to learn more about our mobile, modular, and site-built homes.
What is a Mobile Home?
You should have a comprehensive understanding of whatever you invest in. So, what exactly is a mobile home?
Legally speaking, mobile homes are technically known as “manufactured homes,” but the name “mobile home” has just stuck in the lexicon since about 1953. Before 1953 mobile homes were referred to as “travel trailers.”
So, why is this information important to you as an investor in mobile homes? There were absolutely no federal standards for the construction of mobile homes until 1976 with the ratification of the HUD code.
In other words, there were no uniform construction standards or codes for the manufacturing of mobile homes. Before 1976, mobile home construction safety standards were iffy at best and criminally negligent at worst.
So, with the 1976 passage of the HUD code, all mobile homes, now legally called “manufactured homes,” must be constructed to federally uniform standards. Mobile homes must be durable, built on top of a permanent chassis, fire-resistant, designed for use as habitation with or without a permanent foundation, energy-efficient, fire-resistant, and contain at least 320 square feet, amongst some of the most basic standards.
And the typical mobile home must be at least eight feet wide by 40 feet in length. The mobile home must be built to regional safety codes if it resides in a natural disaster area.
The point here is that every mobile home constructed after 1976 has a white, pink, but usually, a red HUD tag affixed to its exterior, denoting that it was built to exact federal safety standards. So, if you invest in mobile homes, you want to ensure that there is a visible HUD tag somewhere on the exterior.
If the mobile home does not have a HUD tag, then its construction quality standards are iffy at best.
Now, what are the myriad benefits of investing in mobile homes?
Investing in Mobile Homes
Mobile homes are recession-resistant and are always in demand. No one should wish for an economic downturn, but more people will be moving in mobile homes than other types of real estate properties if there is one.
The average rent for a mobile home is $568. And the average income of a mobile home inhabitant is only about $34,000. The point here is that there will always be people willing to live in mobile homes. And as previously mentioned, the market for mobile home renting is set to grow.
You don’t have to pay property taxes since they will own the mobile home and not the land under it. The repairs and physical maintenance costs for mobile homes are also relatively low compared to traditional homes. And depending on the management policies of the mobile home park, while you are responsible for paying for upkeep and repairs, the management could take care of it for you.
The average cost of a mobile home is about $88,000, while the average cost of a house ranges between $300,000 to $400,000. You could buy one or several mobile dwellings relative to the average price of one traditional home and profit more in passive income.
And the typical mobile home is designed to last at least 55 years or longer. So, you are not making a short-term investment.
And while there is high demand for mobile home rental, there is always a low risk for you as an investor. There is absolutely no comparison to the financial market volatility of the traditional real estate market with the mobile home market.
Contact Home Nation today to learn more about mobile homeownership.