Mobile Home Investing: Clearing up the Misconceptions
Whether you call it a mobile home, wobbly box, tin can, trailer, or simply manufactured home, factory built homes offer convenience, affordability and even luxury to many Americans. As I talk to more and more seasoned real estate investors at my local REIA meetings, I realize just how truly secretive mobile home investing has become. Like many investors you may not be aware that mobile homes, as a source of prosperity, are available to you for residual everyday profit.
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This niche has been kept quiet for too long. Let us look deeper into a few of the biggest misconceptions about mobile homes and the mobile home investing business today.
“I thought demand has gone down for mobile homes?” Between 2001 and 2007 mobile home construction averaged 300,000 new homes built each year. This number doesn’t take into account the hundreds of thousands of buyers every year that make up the mobile home re-sales market around the country.
“Isn’t property insurance through the roof?” Property insurance for mobile homes is typically priced by the cost to purchase a new mobile home if the one being insured is destroyed. Mobile homes typically cost less their site built counterpart, and therefore insurance rates are usually substantially cheaper than premiums for block or frame homes. Factors such as crime, flooding, etc, are uncontrollable factors to determining insurance premiums.
“Aren’t mobile homes always moving locations?” In fact only %5 of all double-wide (+20’ Wide) mobile homes will ever move locations. All mobile homes must be safely secured to a solid base and attached to the Earth in a process known as “setting” the mobile home. Stricter laws passed in 1976 and 2006 make this “setting” process safer and more secure today than ever.
“You can’t make as much money with mobile homes compared to traditional housing.” Price is relative. A mobile home will typically sell for a fraction of the cost of a comparable site built home. As investors we capitalize on this and buy them for tens of thousands less dollars than we would investing in a block home. Ensuring a hefty profit can be made on any property boils down to whether or not it can be purchased by you at a low enough price and/or favorable terms. Do your diligence before investing in any property.
When did it become a bad thing to invest in affordable housing? With a few tweaks to your investing paperwork, proper education and determination, anyone can become a success in the buy, hold and selling world of mobile home investing.
– J. Fed