Today’s real estate market can be tough when making investing into an uncertain market; a bit of a hit or miss situation. Real estate investors will often scoop up single-family homes in an effort to cement their profits while newer real estate investors will seek out a cheaper fixer up units and smaller multifamily units that often leave no middle ground for experienced investors seeking a solid real estate package. Which then forces us to wonder, are manufactured home a good investment?
There has been a misconception about manufactured homes for several years paired with clichés ranging from them being tornado magnets to attaching lower class people. However, it’s important to understand mobile home investing makes great financial sense. Understand that investing in or building a trailer park creates opportunities for a solid monthly financial benefit. Mobile home park investing gives good options for increasing an investor’s financial portfolio, so whether you’re seeking to lease land in a mobile home park or own it outright read on to discover why mobile home investing makes good business sense and answer the question, are manufactured home a good investment?
So, why are mobile homes a good investment?
The first reason is that tenants in mobile parks offer the consistency that provides great security to an investor. There are several reasons for this and the first is that there is always solid demand for lower-cost housing and secondly, the cost and fees involved to move a manufactured home to another location is generally quite high and slightly out of reach for tenants that rely on such housing. This would allow an investment increase of possibly 20 percent that could be absorbed by residents who don’t want or can’t afford to move their home.
Building a trailer park or investing in mobile homes allows an investor to jump in and purchase mobile home units for less money. Often a mobile home investor purchases the land in the park making the investment much less than in comparison to the number of units owned.
Mobile homes offer a large tenant market
So, are manufactured home a good investment? With the high cost of affording housing seemly always on the climb, there is always a demand from different age groups for lower cost housing that mobile homes can offer. Baby boomers are continuing to enter their retirement years at a rate of approximately 10,000 each day and many of the 74 million above 60 that are projected to retire in the next 15 years may have little to no savings which means they will have a need for lower cost housing making investing in mobile homes important. But, it’s not just boomers that need lower cost housing. Many American workers don’t earn above $20, 000 annually meaning that they also need to choose between a lower cost apartment rentals or mobile home units.
Investing in mobile homes means lower costs for maintenance
Because a mobile home is owned by the tenant the cost to maintain it is the responsibly of the owner and cuts out the impact plus cost of working with contractors for repairs that often comes with owning a single-family housing rental. A tenant’s outright ownership means that a manufactured mobile home park owner can focus on the care and upkeep of the park grounds without additional costs of unit repair meaning more cash in pocket for an investor.
Competition in Mobile Park investing is light
Still not convinced mobile home park investing makes great financial sense? Then, you’ll be happy to see that building a trailer park or mobile home park investing means that competition from other owners will be light and with so many looking for affordable housing, a mobile home investor is well placed to capitalize on the market due to the unavailable of new mobile home park builds making investing in mobile homes the right move.
The reason why less new mobile home parks aren’t being built is due to some regional difficulty in overcoming legal hurdles for permits and zoning that some states impose leaving several regions wide open for a savvy mobile home investor to come in. Mobile home investing makes sense because of this and with less new parks being built demand will continue to be high while supply will remain level ensuring that investing in mobile homes will not cause the investment worries that would come from newer mobile home park builds.
Build a Portfolio
When seeking to answer the question are manufactured home a good investment, be sure to create a portfolio of properties for maximum financial impact from your investing in mobile homes. But, also understand that when starting out that the more units owned means less financial impact if a portfolio is hit with unexpected costs.
Now that you understand some of the reasons that mobile home park investing make great business sense, consider that a good understanding of mobile home investing market will give you a leg up on the competition. If as an investor you are planning on building a trailer park, be sure to understand the following to get you started getting your mobile home park up and running smoothly:
Have a target home style – purchase a clean mobile home that doesn’t need a lot of repairs and study which mobile home bedroom units sell the best and then plan accordingly to get the best benefits for your budget.
Understand where potential tenants and mobile home owner come from – Most mobile home tenants discover mobile home units through advertisements and can’t afford to pay out in cash for a unit. So, be sure to understand that a great bet for continual cash through your mobile home investing is sure to come from payment buyers paying a fixed amount each month.
Work with sellers to get a great home for the price – A savvy mobile home investor understands that building a trailer park homes means working with a seller or potential tenant to gain the best out each and every transaction. So, keep this in mean during a hunt for great mobile home park investing opportunities.
With so much to offer a savvy investor investing in mobile homes ensures an honest return on an investment that will continue to pay off for years to come. So there is no need to question are manufactured home a good investment because the answer is if the opportunity to invest in mobile homes comes, take it and see an investment take flight.