Like a lot of Doral rental property investors, you are likely to be waiting and watching for good deals on a property. You might have considered acquiring a manufactured home as a good investment. It might appear to be an ideal option as a rental property at first thought. You will find manufactured homes in different places all over the country. But you should consider some pros and cons first before deciding on getting a manufactured home as your next investment property.
One advantage of buying a manufactured home is that they often cost a lot less than other kinds of single-family homes. The way manufactured homes are built and installed makes it possible for its cost per square foot to be significantly lower than that of other properties. A new manufactured home would be an affordable option for an investor who does not have a budget yet for new construction. They are also faster to build –often taking only half the time it takes to construct a traditional home. This means it would be possible for you to buy and immediately rent a brand new home for nearly the same cost as a fixer-upper that would take much longer to have ready for your first tenant.
Other benefits of investing in manufactured homes include the quality and eco-friendly design. Compared to years ago, modern manufactured homes usually have better quality than traditionally-built ones. Because of very strict factory standards, manufactured homes are structurally sound, attractively designed, and also energy-efficient. They also typically come with upgraded insulation both under the foundation and in the walls. They also offer on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. With these eco-friendly features, you can save a lot in utility and maintenance costs.
There are also a number of disadvantages to investing in manufactured homes. One of the greatest hurdles to buying a manufactured home for use as a rental is finding a good location for it. Even if the home’s cost is low, the cost of land will still need to be factored into the investment property’s overall price. Cost, zoning, and land availability may become big challenges, especially in heavily populated areas.
You could acquire a pre-existing manufactured home instead, but this will bring up another common disadvantage of manufactured homes: long-term value. It is still debatable if manufactured homes appreciate enough for them to be worth buying as a rental property. In a lot of areas, manufactured homes still carry a stigma that greatly limits their future value.
Finally, it can be more difficult to finance a manufactured home than other property types. This is because many mortgage lenders don’t consider manufactured homes as “real property.” The perceived impermanence of a manufactured home may cause some lenders to refuse to loan you enough to cover both the land and the home itself. Although this objection could be overcome with time, it still presents additional problems rental property investors must face.
So are manufactured homes a good investment? They could certainly be, depending on the location, quality, and ability to secure financing.
Are you looking for your next Doral investment property? Your local team at Real Property Management Dade can help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 305-501-1511 to learn more!
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