As a Leland rental property investor, you are continuously on the lookout for a good deal on a property. You may be puzzling about whether or not manufactured homes are a good investment. On the surface, it may definitely be the ideal option for your next rental property. Manufactured homes are popular in various different parts of the country. However, there are some pros and cons that you should ponder on before ever deciding if a manufactured home is the right choice for your next investment property.
One huge advantage of getting a manufactured home is that they are often lower in price than other classifications of single-family homes. Simply because of how manufactured homes are built and installed, their cost per square foot could be significantly lower than that of other properties, even those of similar age and size. And where new construction can be perhaps out of your price range as an investor, a new manufactured home will potentially be way more affordable. They are, furthermore, so fast to build, commonly cutting the time of construction to half of the traditional homes. That actually means that you could potentially buy and immediately rent a brand new home for roughly the same cost as a fixer-upper that will usually take months to make it completely ready for your first tenant.
One other unmistakable benefit of investing in manufactured homes points to the quality and eco-friendly design. Greatly different from the last few years, today’s manufactured homes are generally the same or better than traditionally-built homes in quality. Factory standards for manufactured homes are very meticulous, which increases the likelihood that the one you may get will be structurally sound, attractively designed, and energy-efficient, as well. A lot of these come complete with upgraded insulation both under the foundation and in the walls. They similarly provide on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. All of these eco-friendly features can further reduce utility and maintenance costs.
But truth be told, there are a few drawbacks to investing in manufactured homes. One main hurdle to investing in a manufactured home to put into service as a rental is finding a good location to build it. Conceding that the home’s cost can be relatively low, the cost of land must also be factored into the investment property’s overall price. The cost, zoning, and land availability may, unfortunately, prove to be insurmountable challenges, especially in urban or suburban areas.
Looking for and procuring a pre-existing manufactured home may help you overcome this complication, but as it happens, it gives rise to a second common disadvantage of manufactured homes: long-term value. There is some debate with regards to whether manufactured homes appreciate enough to make them worth buying for rental properties. In quite a lot of locales, there is a lingering stigma in connection with manufactured homes that can severely limit their future value.
One last thing, it may be more tedious to finance a manufactured home than other types of property. This is because of the fact that numerous mortgage lenders don’t consider manufactured homes as “real property.” The perceived impermanence of a manufactured home may result in numerous lenders to refuse to loan you the appropriate amount enough to cover both the land and the home itself. Even supposing this objection may be overcome with time, it presents additional hoops that rental property investors must jump through.
So, really, are manufactured homes a good investment? The ideal answer is that they can be, depending on the location, quality, and ability to secure financing.
Are you looking for your next Leland investment property? Your local team at Real Property Management Champion can assuredly help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 910-782-4488 to learn more!
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