Stick build vs manufactured new build

[Cody Cabral]

Looking for pros and cons.

I have a 5 acre lot in Arizona that I have now subdivided into 3 lots. The middle lot has the original 2,000 sq ft manufactured home on it and stays rented.

My question is... on my now open two lots should I build stick homes or go with manufactured? These will be intended to stay as rentals for my personal portfolio. Sell as needed in the future.

[Chris Davidson]

@Cody Cabral I would go with Stick build. Manufactured decrease in value.

I would leave the one rented now. Start building a stick build on one lot. If you can't get the other built put a trailer on it for time being. then as money become available remove trailer put stick built in place.

Cons I see could be less desirable to rent a home beside a trailer really just depends on area and what is expected.

Pros I see trailers are quicker to getting a renter in and making money

Hope that helps!

[Mark Brogan]

@Cody Cabral, I vote manufactured homes, the demand for affordable housing is huge in this country, cost to build will be much cheaper and will rent for the same price, good luck

[Brenden Mitchum]

Hey @Cody Cabral, welcome to the BP community!

You're going to get two camps of people answering this question as has already been demonstrated: 1. Manufactured homes depreciate in value so stick built is better. 2. Manufactured homes are cheaper so allow for better ROI.

The "right" answer to this question really just depends on where you live and what the tenant base is. Is there more demand for mobile homes or stick built in your area? Are there already a ton of mobile homes in your area? Does your market need more? If there is demand for affordable housing, you could definitely go that route, but understand that if there aren't a ton of them, you will almost definitely fetch lower rent in one than you would in a stick built. If there is not much demand for affordable housing, stick built may be a better option. Either way, best thing to do is to analyze your market and run your numbers accordingly - make it as much of a "science" as you can. 

Hope that helps a bit and please, feel free to reach out anytime if you have other questions or just want to chat!

[Justin Apple]

@Cody Cabral I just bought 5 acres in Texas and was wanting to do something very similar. I’m wanting to divide into 5 lots but may only be able to get two out of it due to deed restrictions. My opinion is stick built is better in the long run, however manufacturered homes don’t necessarily scare me as long as they cash flow. It’s a much cheaper alternative to building new not to mention much faster time frame to cash coming in. Let us know how it goes!