Is renting a mobile homes a good start?

Question

I have a 4 arces of  land I plan on spliting the lot. i can only have one house/ moblie home for 2 acres or more. I like to put a moblie home in 2 arces and the do the same with the other two acres and rent it out. i like to know the pros and cons of doing this?

Paul Ewing · Answer

I'm surprised you are limited to one home per two acres.  Most places it is one per acre.  Anyway, I have done what you would like to do and think it worked out well.  These are the key things to think about from my experience putting in two doublewides last Summer:

• Cost of the MH and delivery  What is included in the setup?  I purchased two fully refurbished used doublewides 8 and 12 years old.  The price included delivery,  and all blocks and tie down system.  It did not include hookup of utilities or AC condenser. It did include trimout which is sealing the connection, covering the seams with sheetrock or trim and touchup painting and 60 days habitability on the systems.
• Site preparation  It is much easier to install a MH on a relatively level area.  I had about four hours of dozer work done to create two level pads and a common driveway which cost $400.
• Driveway and parking  As I said above I had the dozer smooth a driveway and also had him bring four dump truck loads of roadbase (gravel and clay mixture).  The roadbase was $225 a load.
• Water I had to get two water line taps and meters into the community water system.  These were $1050 each.  I then dug the trench for the water lines to each house and ran 3/4" PVC lines that I hooked up myself.  This is a relatively easy thing.  Materials were under $100 each and the trencher was $150.
• Electric I had to have the local electric co-op run set in a new line to supply the two houses.  Luckily they do it on a cost share setup and a certain distance is included free for the first new hookup on a property.  The two MHs are about 100 feet apart so the second line was under $200.  I had to set two meter poles and build the meter loops and run the main power line from the main breaker on the meter poles to the subpanel inside the mobile home.  This was about $800 in materials each and a weekend of labor.  I have done this several times before so know what to do and have the equipment to do it myself including tractor with hole auger to dig the six foot hole and front end loader to help set the 25 foot poles (not exactly fun or really safe to balance and tip up, but it works). This whole step is probably something that most people will want to contract out and I would expect to pay $2000 or so to have it done.
• Sewer We use septic systems here for rural sewer which requires a site inspection and prec test and plan by a licensed professional ($10-$200 each).  This is then submitted to the county for a license ($360).  The actual work is then done by an installer that digs the holes and places the tanks, digs and sets the lateral lines, and usually hooks up the MH to the system.  Be sure to ask because some charge extra depending on the number of sewer drops from the house since some MH have one common line inside the floor and one drop and some MHs have a separate drop for each drain and must be connected to a newly built line under the house.  The materials and installation is around here is usually around $2800 to $3500 for a standard system and up to $5000 if an aerobic system is needed because of ground conditions.  I was able to get a discount because he put two in at the same time.  We also tied the two fields together which meant that in reality we only have one system which saves a extra permit fee for the second house.  
• Stairs and decks The mobiles we bought came with simple wooden stairs for one door.  These are ok for temporary use while getting the house ready, but do not meet either renters or insurance requirements because they do not have hand rails.  Most people in the country want a deck so I built small 8x12 foot decks on one door either front or back depending on expected use and a smaller porch and stair on the other.  The larger decks cost $400-$600 in materials and the porches about half that.  Expect at least a days labor for two people to build a deck and porch.
• Skirting Mobile homes need good skirting for looks, climate control, and protection from animal damage.  I used metal R-Panel which is commonly used for roofing and metal buildings.  It has the advantage of not being easily damaged like the more common vinyl siding used by most skirting contractors.  Cost were about $750 in materials for each MH plus figure one to two days of labor for two to three guys installing.  You can also use Hardieboard, vinyl, concrete blocks, and several other materials at various costs and pros and cons.
• Yard Prep Face it no one wants to move into a construction zone at least not one that will be that way for long.  You need to do something to the bare dirt around the place.  I was semi lucky that I have a lot of sand and just starting the winter planting season so I was able to hand broadcast winter grass seed right before a rain and have nice green yards quickly.  I am going to broadcast Bermuda again in the spring.  Cost about $50 in seed.

I am sure I missed a couple things but over all despite a lot of work ( see my thread from August called Passive Income Phewy) because I was doing much of the work myself to keep costs down it has been a very good experience and will be very profitable in the future.  I had the first one rented before I got the water line in and the second one two days after I advertised it on Craigslist.

Bogdan Cirlig · Answer

tl;dr; on the above (all great info) one thing to keep in mind: In general, Mobile homes don't appreciate :) so you will have to rent to cover all expenses and have a positive NOI by a mile to make it worthwhile and make sure you make more than minimum hourly wage vs your invested time in the whole operation.