Thinking about buying mobile home for rental

[Brian Mathews]

I've run into a situation where I might be able to buy 1-3 mobile homes. 1 single wide for around $20K and doublewides for $24K. You have to leave them on space which is $320 month and single rent for $825 and double $925, that is lot included. I might be able to get them a little less if I buy 2 or 3. They are 1998 and newer. I don't know a lot about mobile homes. But $500 and $600 month after lot rental and before repairs seems pretty good. I will assume there will be no property taxes since on somebody else's lot. What does insurance typically cost on one of these? Can you depreciate these like you would a normal stick built rental home? I know these are different guidelines, more similiar to buying a car than a house. I think they even have a blue book for them.

Thanks.

[John Fedro]

Hi Brian and group,

The homes sound quite nice and newer at 1998 and later models. The concern in our opinion is the cost. Even purchasing at $20,000-$24,000 you will not make your money back for 2.5+ years. I always aim to make all my invested capital back in less than 12 months, if I'm paying with all cash versus seller carry back.

I know your area well and can tell you those are about retail prices. Additionally many parks will not allow renting in their parks, but you may already know this fact.

Are you considering renting these homes? Renting leads to filing your homes with renters, with renter's mentalities. Renters do not take care of a mobile home like an owner will. With that said mobile homes can be damaged quickly so it is important to stay on top of your homes and renters if you decide to rent.

To answer your other questions 1. they do depreciate tax-wise like SFRs. 2. There is a Blue Book value to these homes but unless you are getting in appraised or refinanced this value is unimportant as an investor. 3. Insurance runs approx $40-$70 per month.

Hope this helps and keep us posted on how you decide to move forward.

Best,
John Fedro