New here! Are mobile homes/ manufactured homes good idea?

Question

Are mobile homes and manufactured homes a good idea to buy and rent out to others?  They seem like a fairly cheap way to start? Or am i wron

Where is a good starting point ?

what potential dangers i may  run into while trying this?

Working on fixing my credit since my credit is trash. But i know of some mobile homes that aren't to expensive i can put my name on and rent out to others.

Rachel H. · Answer

@Phil Walters Mobile home investing definitely works. It's a niche many investors don't pursue. To get into it, it's best to learn the market first. Then create a plan. And build a network to help you to achieve your goals. Regarding potential dangers, mobile homes are different than single-family homes so it's important to have a network of contractors (if you plan to hire out the fix-up work) familiar with working on mobile homes to help you with the fix-up work when the need arises. Hope that helps!

Derrick Dill · Answer

Welcome to BP!

Mobile homes/manufactured homes often stay in mobile home parks. Here in California, the cheapest in my area is 700$/mo to rent the land to place your mobile home/manufactured home on.

There is a wealth of information here on bigger pockets, start researching what you're interested in. Type in the search box "mobile homes" and start reading up on the different threads. If it's something that fits you, pursue it. I'm a buy and hold long term rental kind of guy. There's people who do auctions, notes, tax-liens, commercial, residential, BRRRR, short term-rentals, college town rentals etc. Find what you're interested in that works for you

William Watt · Answer

I am in Alabama which is not the highest level of real estate investing, how ever I do have 13 trailer LOTS.  I find that owning older mobile homes is always an on going repair issue.  If you can do it your self then go for it.  Other wise stay out of it as you will loose your a__ big time.

But, owing the lot is different.  You do not own the mobile home, just the lot and things like septic tanks  / water wells if applicable.  I only purchase lots with city water system, I will put in a septic if required.

Don't get to far out in the county away from a city.  Don't go over board, look and see what the rent is at the parks.  All of my lots are 1/2 acre and i find people really enjoy a little room and not stacked up in park. I price my rent for the long run but if I am not doing 20% return on my investment I don't do them.  It takes a lot of looking but the property is out there.  Remember it cost the tenant about $5k to move their mobile home on to a lot, so they are there for the long haul also.  Closer to a city the more desirable the lot, which means money.

I have one lot that are for RV's in a small Florida Panhandle town.  I purchased the small lot for $12,000 and charge $500/ month per spot (2). The lot has water and city sewage. The entire lot is landscaped with rocks /shrubs and I can turn the power on or off remotely via my phone.  This one has been a gold mine.  I have a landscaper go over when the tenant leaves and rakes out the pretty white rocks and looks after the palms.  This little town is on the coast and a lot of my clients are either snow birds in the winter time or families out of Atlanta in the summer.

There are a lot of things to be careful of and below are a few

1) Most all of your tenants will be lower income.

2) You have to be tough as nails, if they cant pay they have to leave and i suspect you will be left with a problem on your hands. Now it is your cost to remove the trailer and there goes your investment returns. Know what the cost are and get that in a deposit.

3) Don't become involved with the tenants life, this is business.

I suggest on your first outing you look at renting out camper / travel trailer spots.  This will require a lot of physical work to put in the water and septic systems, but cost can be controlled if you do it your self.  The first thing again is to look at the local market in the parks and see what you can expect for rent.  You are now dealing with the lowest of the low income generally.  You will find some exception, retired folks, divorce people, part time residence who work in the area during the week and go home on the weeks, construction guys.  If you are near a military base then you have a gold mine and no issues.

In closing I offer this;

1) is the property clear or if grown up what will it cost to clear leaving only a few trees

2) Is there water, power and sewage available to the lot if not already there.  What are the cost to get services on the property

3) Can I get multiple campers on the lot and how close will that be including access for all campers to be pulled out in case of evictions (you will have these)

4) CHECK your local city, county, health dept. codes before investing

I love mine and keep adding, hoping to do one more this year.

Bill

David Martin · Answer

@Phil Walters When it comes to mobile, I tend towards mobile on unrestricted land, specifically for two reasons. First is, if it meets some basic conditions, you can actually finance it out on a 30yr amort... second, it's a great way to leverage traditional housing finance to access land that has tons more options, particularly if it has other value, such as on or near a corner of two major roads, adjacent to desirable features like waterfront or views.

Jo-Ann Lapin · Answer

Owning the land is one of the biggest parts . In California this alternative investment lends itself to affordable housing and can be very profitable . Many counties and cities have not been to keen on them  but the trend for last 10 years has been growing and will continue as land prices keep increasing .

Aaron Poling · Answer

It can be lucrative, with a lower up front investment but there are lots of downsides. First if you are purchasing a mobile home on a rented lot, you are purchasing a depreciating asset. Unlike the land, mobile homes will keep depreciating over time, and there aren't many tax advantages to owning them (that I am aware of). Second they can be lots of maintenance, especially older ones that you are buying on the cheap end. Third be sure to check in with the park rules, some limit non resident owners, and some require older mobile homes to be removed between owners. On the positive side, they can be great cash flow, with an easy point of entry for investors. I currently own one mobile home on a rented lot, in the process of remodeling and will net me about 500 per month. It isn't a business I focus on but had the opportunity and decided it was a good deal.

Good Luck! Aaron

Whitney Hutten · Answer

@Phil Walters I know people who purchase and rent the homes.  However, the side of the business you want to be on is owing the land.  Think about how you can there!

Leo Chun · Answer

Hey @Phil Walters,

Welcome to BiggerPockets! You have definitely come to the right place to learn about this. I found a good article about mobile homes which I thought was very interesting:

https://www.biggerpockets.com/blog/invest-mobile-homes-less-than-25k

Or just go straight for them all: https://www.biggerpockets.com/blog/category/mobile-homes

Good luck!

New here! Are mobile homes/ manufactured homes good idea?

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