New to Real Estate · San Antonio, TX · Member since 2021 · 3 posts · 2 votes
I'm in San Antonio and have seen a few Manufactured Homes for a low price. But manufactured homes seem to be categorized under Mobile Homes,
and I always thought of mobile homes as something similar to an RV
where you plop down on a piece of land and can drive away whenever you
decided to do so. Doing a rent analysis on a few of them, I realized they could potentially be a decent start in REI. But being that this
feels too good to be true, I wanted to ask here about them because I feel like there's a catch with these prices lol.
Are
manufactured homes a good buy? Are manufactured homes the same as
mobile homes? Is there any additional cost I should be aware of? I ask
this because as stated when I think of mobile homes, I think of renting
the land the home sits on while someone lives in it.
I believe anything manufactured after 1978 is a "manufactured home" though they are often called a mobile home as well. As far as "additional costs" of course you have to pay to move one and hook it up if it's not in place. You will have some repairs after moving, which is usual depending on the unit.
Renting land to a mobile home owner is an option for rental income, however as with any rental there can be complications.
Are they a good buy, well it depends on if they fit your need. You can live in them or rent them, just like a stick built house. We have found they are not as sturdy as a house, but if someone is not rough on them they hold up fine. They will decrease in value over the years, not increase as a house might. And financing to sell one is not possible unless you do owner financing if they have been moved.
I believe anything manufactured after 1978 is a "manufactured home" though they are often called a mobile home as well. As far as "additional costs" of course you have to pay to move one and hook it up if it's not in place. You will have some repairs after moving, which is usual depending on the unit.
Renting land to a mobile home owner is an option for rental income, however as with any rental there can be complications.
Are they a good buy, well it depends on if they fit your need. You can live in them or rent them, just like a stick built house. We have found they are not as sturdy as a house, but if someone is not rough on them they hold up fine. They will decrease in value over the years, not increase as a house might. And financing to sell one is not possible unless you do owner financing if they have been moved.
The manufactured homes I've been looking at don't seem to be the movable kind. At least they look as if they are permanent as they don't have wheels.
I've read one or two articles about them since I've written this post, and one thing that kinda made me say ok, this might not be for me is this. One article compared it to buying a car rather than buying a house.
Movers can come look at any unit and give you an estimate on moving costs and tell you how difficult it would be to move one. Wheels are not on mobile homes.
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
5y
A manufactured home is a mobile home. They can be double wide. They don't appreciate in value and are not eligible for conventional mortgages. These are different than modular homes, which can appreciate in value.
Rental Property Investor · San Diego, CA · Member since 2019 · 48 posts · 40 votes
5y
@Karim Dallas-Newell I looked at some mobile homes too and at first I was kind of excited about it, but the more I read the more I understood why most people are not excited about it. The biggest thing is no appreciation. Without appreciation it just doesn't make sense to buy real estate. The other thing is you're buying very low end properties which will attract low end renters which will be more likely to damage your property and just not treat it well. Since mobile homes are not as sturdy anyway it's just a recipe for disaster in my opinion.
We have 4 mobile homes we have rented for 8 years. You can get good tenants and they have good cash flow. So I would consider them if if a good deal overall. For financing, they can't qualify for conventional financing if they have been moved of if they are single wides.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
5y
@Karim Dallas-Newell Yes, investing in mobile homes definitely works. Though like anything, it's a niche. As in all real estate, you really have to get to know the asset class and area(s) that you work. The most successful people I know have mastered a niche.
The key is to learn your market and build up a good network of people that can help you. I've been investing in mobile homes for over a decade and it works. Though, there are ups and downs like any other business. It's important to take the time to learn from your mistakes and get through the hard times when obstacles get in the way. This separates those who are successful versus those who are not so successful.
Regarding costs, it will depend on the area and the type of neighborhood and clientele you work with. Personally, I work in high-end mobile home parks so the costs are higher than working in lower-end types of parks. Also, the clientele is different and the expectations are higher in the types of parks that I work with. Though, there's nothing wrong with working in lower-end types of parks. I know many investors who work in these types of parks and have been very successful.
If you're looking to get started in mobile home investing, it's best to read a few books on the subject. Do a search online and see what comes up. Start there. Then, take the time to learn your market and see if it's something that you want to do.