Advantages of Investing in Manufactured Homes
By: Rusty Tweed
Have you ever thought of investing in a manufactured home? If not, you should.
We know the stereotypes by now, but honestly that is just not the case. These homes can actually be very high end. Manufactured homes also have the potential to be wise long-term investments, and here are five reasons why.
Lower Cost
With investing in larger properties or single-family homes, the cost per home unit is much higher. A mobile home park allows an investor to acquire more home units, for less money. Which is a lot more home for the dollar.
Most park owners own the land, not the housing units themselves, so the investment cost is a lot less. You could easily pay over $100,000 per each home or apartment unit. And pay only as much as $10,000 for each lot in a mobile home park.
High Demand
There is a huge demand for affordable housing these days more than ever. The United States has experienced one of its biggest rises in poverty rates in more than 50 years.
If you think about it simply, get yourself in the right area with the right economy, and you will have no shortage of applicants interested in renting. Even a waiting list would not be out of the question.
Manufactured homes are also becoming easier and easier to sell. Priced reasonably coupled with the huge demand makes these an absolute gem of an investment.
Lot Rent Increases
The costs to rent a mobile lot will increase annually. You could expect to see annual increases of around 4 to 15 percent for annual lot rent.
There will be times you might need to raise your rent to exceed well over 20 percent, depending on the market rates.
Even if you only raise these rents minimally each year, you can still earn respectable profits.
Less Operating Costs
Usually with manufactured housing leases, the residents themselves are responsible for maintaining their own homes as well as the land.
This means less cost and responsibility for you, making this a wise investment. The housing community owners will typically incur expenses for common areas and any amenities.
Recession Resistant
Honestly, mobile home parks hold a unique place all of their own in real estate sector. There are one the most affordable types of housing available. Depending on where you live, the average lot rental rates vary, but they typically range from $400 to $900.
Individual parks have different amenities such as a pool, clubhouse or gym. The better amenities, the more likely people are to pay this for a package deal. A recession proof package deal. But these are constants. Owning an affordable rental property will always pay for itself.
Conclusion
Throw any preconceived notions or stereotypes aside. This is a truly wise investment to make.
Rusty Tweed is the President and Owner of TFS Properties, Inc. TFS Properties are real estate professionals that specialize in finding off-market investment properties for their clients.
