Investing in mobile homes

[Calvin Penn]

Hello.. Are mobile homes a good investment?

[Logan M.]

Quote from @Randall Alan:

@Calvin Penn

Mobile homes are considered depreciating assets... just like a car.  They generally don't increase in value like brick and mortar homes.  Banks also won't lend on them as easily.  When real estate doubled and tripled in the past 2-3 years... mobile homes didn't.

That doesn't mean that owning a mobile home park won't make money though.  But the homes themselves... not so much.  

The biggest problem with the mobile home 'equation' (if you will)... is the 'lot fee'.  Once you add the lot fee to the price of a mobile home, the numbers don't add up as well, because so much of your money is going to person who owns the park.  With both traditional homes and mobile homes, you have principle, interest, property taxes, and insurance.  But with mobile homes you then tack on $500-700/month to have a place to put the mobile home.  So instead of way more money going to principal and equity, it goes out the door to the lot fee.  

Otherwise, they are difficult to move, and are frequently built very cheaply.

I don't know the ins and outs of buying and selling them (arbitrage).. but as an investment you will be better off in traditional brick and mortar homes.

All the best!

Randy

 I would add a caveat to Manufactured home appreciation, they are nearly 100% dependent upon location. In our area, just outside Salt Lake, we had a huge amount of appreciation for these homes.

Now if you are in Mississippi I am not sure they would even retain value.