Are Mobile Homes a Bad idea?

Question

1. As someone who's grown up in a state where mobile homes aren't a thing I'm just curious:

2. What are the pros and cons of owning and renting out a mobile home?

3. Do most mobile homes require you to rent the land as well or could you own both? (Depending on the area?)

4. What should I look out for, and what should I be interested in when it comes to this market?( Or field of homes I should say.)

5. Is this an investment that's worth it or am I getting ahead of myself?

6. Lastly what's the main difference between trailers, mobile homes, and manufactured homes? And are they the same when it comes to renting or buying or should I focus on one over the other?

Aloha,

I'm a soon-to-be grad student at the University of Michigan trying to figure out her housing options, but also trying to start building generational wealth. Why now you may ask?

Why not now? The only way to start my real estate journey is to get in the field, and I feel now is the best opportunity for myself to do so.

(Feel free to look at my previous post for more information and background :) )

I'm open to all suggestions, advice, opinions, and opportunities!

Mahalo BiggerPockets Community 🤙🏾

Drago Stanimirovic · Answer

You're asking the right questions, Kenya. Mobile homes can be a great low-cost way to start investing, especially if you own the land. They can cash flow well, but financing is tougher and land ownership matters for long-term value.

Focus on manufactured homes (built after 1976). They're more standardized and easier to work with than older “mobile homes” or trailers.

You’re not ahead of yourself, just getting started smart.

Jaron Walling · Answer

@Kenya Glenn Trailers, Mobile homes, and manufactured are all unique. Each come with pros and cons.

A trailer is dwelling or glorified tent on wheels (depending on the quality) which is more closely related to RV. It's a motor vehicle or trailer that includes living quarters. People do not buy these as investments. Historically speaking they lose value really fast, require maintenance like a car or truck, and are not easy to rent to other people. Adventure vans fall into this category. You can live anywhere, make connects to utilities if necessary, and drive around.

Mobil homes manufactured off site (usually half's) and can be portable or have fixed foundations. It's pulled by a truck and set in place on a lot. It has wheels underneath and could be moved again in the future. The biggest pro is the cost. It's very cheap to buy, and live in a mobile home. The biggest con is lot rent. UNLESS YOU OWN the land you're paying another investor lot rent. Sometimes they own the mobile home and land. Mobile home investing is challenging to get into. Mobile home parks sell for hundreds if not millions of dollars because the land (and total lot rents) collected has value. The trailers are hardly worth anything, but that depends on the how the park is operated, location, and local economy.

I'm not a mobile home expert but I experienced owning a mobile home through a close friend. He bought one for $15k cash, invested $4k into remodeling the interior, rented it for 3 years (his rent - lot rent), and then sold it for $15k. He lost money. On a small scale it's a bad investment. On large scale like owning/managing a park it's a great investment. Which one should you invest in?

It depends on your situation, finances, and understanding of REI. Trailers or adventure vans are really fun! My friend has one (also owns a primary) but it lacks the appreciation, tax benefits, and stability that real homes comes with. She's constantly working on it to keep it road worthy. A mobile home could be place you rent for a few years, pay lot rent, save your $$$, and move onto something better. My former boss and his wife lived in a mobile for 3 years, saved every dime, and then bought a house. It was a big sacrifice because the location sucked but financially it really paid off! You're young so ask yourself what can you sacrifice to move the needle, follow a budget, and chase your dreams. Cheers.

Bruce Woodruff · Answer

Any plan can be a good plan if done right. I would just be aware that with a mobile/manufactured home, you will not have the ROI regarding appreciation that you would have with a standard house. Appreciation is how many investors make a lot of their money.

Michael Smythe · Answer

Mobile homes statistically have a lower entry cost than regular homes.

As others have pointed out, you'll need to educate yourself on the different types.

Also note that if one is on land, it'll be worth more money than a home on a lot in a park.

Are Mobile Homes a Bad idea?

Most Popular Reply

Contact Us