Manufacture home sale or rent?

Question

Hello, My name is Johana and I pretty new to biggerpuckets, looking for build some wealth trough real state, I a Tax preparer and Bookkeeper have my firm running all year, Tax season is great for mo to get my money for invest.

I own couple family rentals and 2 fourplex, , but I have this is the situation which hopefully I can have some advice.

I own a 3 acre property not mortgage, and i just divided in 2 lots, one already has a manufacture home and producing cash flow, but the other is empty and I planning on buy a brand new manufacture home to put in the land and rent it.

Do not find lot of info on manufacture homes about rental but just want to know for people with experience about buying this kind homes and rented.

I really appreciate any kind of advice.

Isaac Pepper · Answer

@Johana Balderrama in my market area I cant see where buying a new manufactured home would make sense. My first purchase for my own residence was a 1977 double wide and I quickly learned that while it was the right move for me at the time (very very low housing costs), it would be horrible to maintain with people who dont take care of things. Water damage was a huge problem when I bought it. Everything is made cheap, it had 1x2s instead of 1x4s, the floors are press board not real plywood, the walls are secured with staples, there is very little insulation.....the list goes on and on.

However I know repossessed homes are sold at a local toter/mover company. It would make sense to buy a used home, have it moved to and touched up and place tenants in it. This way you avoid the huge initial depreciation! Something to consider.

Rachel H. · Answer

@Johana Balderrama It can definitely work like any other niche in real estate investing. I think the key is finding the right tenants and buying in the right areas. It'll be the neighborhood that will attract the type of clientele who live there and those who want to live there in the future.

If you're interested in cash flow, it's a great route to go as long as you put the right tenants in the unit and the home is maintained on a regular basis. For me personally, I've been in the mobile home investing business for over a decade. I've had my ups and downs just like any other business. But overall, it's been quite profitable.

Hope that helps!

Account Closed · Answer

Great question! In my experience, manufactured housing typically sells for quite a bit less. However, for a cash flowing property, it can be a cheap way to get housing up quick and making money. Just keep in mind, when you go to sell that you may not get what you would like.

Jared Garrison · Answer

@Johana Balderrama

I wouldn’t recommend buying a new manufactured home. Why dump $100k into a house that will be worth $10k in 10 years? When you could take that same $100k and buy a small single family house that would probably be worth $150-180k in 10 years

Johana Balderrama · Answer

Thank you for all your advice really appreciate it,

Mark Brogan · Answer

Mobiles are one of the best way to cash flow either by renting or selling, like with other realestate they can and will go up in value if you take care of them, if you treat any home like lots of slumlords do they will go down in value, should be tons of opportunity in your area, good luck

Johana Balderrama · Answer

Trying to figure out, construction is very expensive right know here in Phoenix, and definitely a manufacture home will be less cheaper, which will add value is the land where it will be placed (if I decide to sell,), is paid off and will rent about 1500 a month at least, I have that empty lot ready to go with electricity and septic already and I feel is like waste of land I feel and want to make some cash flow from it.

Nam Trang · Answer

@Johana Balderrama If you want to start investing in mobile homes for cash flow, you'll first want to understand the local market for mobile homes in your area. Contact property managers of local mobile home parks to see how they handle rental situations, or if the park rules even allow them at all. You'll also want to get a good understanding of what typical lot rents are in the area.

Johana Balderrama · Answer

Thank you for your response, since I not planing on sell just keep it like the other one, With the prices now so high to build I think my best option is buy and rent.

Manufacture home sale or rent?

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