Accountant · CO · Member since 2018 · 195 posts · 23 votes
Hi BPers, Need help to analyze a mobile home purchase. I found some available lands for sale that allows single and double wide mobile home, for $48k-53k. Park HOA required putting down foundation. Also water and sewer tap need to be purchased separately, prob 7k each. The realtor said it will be 80K except thr foundation. I am thinking of rent it out. Will this be worth the return? Thank you for all the advice! Thank you all!
Hello Ashley. There are pros and cons to mobile homes. Pros. They cost less than regular homes. Many people are looking for affordable accommodations. You will have less competition as a mobile home investor as those are few and far between. Statistically, I am a numbers nerd, there is a lower tenant turnover rate in mobile homes than in other homes and apartments.
Cons. I don't know if you have gone for financing yet, but they tend to be harder to finance especially if you are not buying the land along with it. This means land outside of a park. Some people have a negative stigma to them and could make finding good tenants difficult. What troubles me the most about them is how quick the depreciation is on them and that you can't do much to change that. So if it turns out to be a nightmare, it is hard to get money back out of the deal.
There are homes with good bones that you could invest in that may be more worth your while. You could move in, fix up, and use the BRRR method to turn that into a winning strategy and move out when ready to rent. I am not an expert on mobile homes but have friends that have started mobile home parks. Someone else may give you better advice on that, but I think for the money I would rehab a place a use the BRRR method. Thats me though.
I'd only consider it if you owned the land and were in an area where land values were going up. Move a mobile home on, get it connected and rent it out. Look into insurance as rates are different than for a regular home.
Hello Ashley. There are pros and cons to mobile homes. Pros. They cost less than regular homes. Many people are looking for affordable accommodations. You will have less competition as a mobile home investor as those are few and far between. Statistically, I am a numbers nerd, there is a lower tenant turnover rate in mobile homes than in other homes and apartments.
Cons. I don't know if you have gone for financing yet, but they tend to be harder to finance especially if you are not buying the land along with it. This means land outside of a park. Some people have a negative stigma to them and could make finding good tenants difficult. What troubles me the most about them is how quick the depreciation is on them and that you can't do much to change that. So if it turns out to be a nightmare, it is hard to get money back out of the deal.
There are homes with good bones that you could invest in that may be more worth your while. You could move in, fix up, and use the BRRR method to turn that into a winning strategy and move out when ready to rent. I am not an expert on mobile homes but have friends that have started mobile home parks. Someone else may give you better advice on that, but I think for the money I would rehab a place a use the BRRR method. Thats me though.
Hi Ben, thank you for the advice! you made a good point, the depreciation of the mobile home is my main concern. In this newly developed park, I am looking at, the owner will need to buy the land and mobile home. it's in a highly desired location, honestly, I don't know how the developer persuaded the city to agree to do this. The land value is very high. I will need to think about it for sure. thank you so much!
I'd only consider it if you owned the land and were in an area where land values were going up. Move a mobile home on, get it connected and rent it out. Look into insurance as rates are different than for a regular home.
Hi Teresa, thank you for your advice. In this newly developed park, the owner will need to buy the land and mobile home. I will check the insurance. that's a good point! thank you!