Like most West Ashley rental property investors, you must be always on the lookout for good deals on properties. You might have been wondering if manufactured homes are a good investment. On the surface, it would seem like it is the ideal option as an addition to your rental properties. You can see many manufactured homes in different parts of the country. However, you have to look into the pros and cons before deciding to buy a manufactured home as your next investment property.
An advantage of buying a manufactured home is its lower price compared to other types of single-family homes. It is because of the way they are built and installed that their cost per square foot can go much lower compared to properties of similar size or age. When you are an investor with a limited budget, a new manufactured home will be a much more affordable option. They are also faster to build than traditional homes. For roughly the same amount you would spend on a fixer-upper that would take months to get ready, you could buy and immediately rent out a brand new home to your first tenant.
Other benefits of investing in manufactured homes include good quality and eco-friendly design. Present-day manufactured homes are made with the same or better quality than traditionally-built homes. Because factory standards for manufactured homes are very strict, chances are you will be buying one that is structurally sound, attractively designed, and energy-efficient too! Most will also come with upgraded insulation under the foundation and in the walls. They also offer on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. These eco-friendly features will help in reducing your utility and maintenance costs.
On the other hand, there are also some disadvantages to investing in manufactured homes. One of the biggest challenges about buying a manufactured home to use as a rental is finding a location good enough to build it on. While the home’s cost tends to be relatively low, the cost of the land must also be taken into account when coming up with the investment property’s overall price. The cost, zoning, and land availability can prove to be great challenges, especially in urban and suburban areas.
Buying a pre-existing manufactured home could help overcome this challenge but will certainly bring up the second disadvantage of manufactured homes: long-term value. However, there is still some debate about whether manufactured homes retain enough value to make them worthy of purchase as rental properties. Some areas still hold a stigma about manufactured homes that can limit their future value.
Finally, you may find it hard to finance a manufactured home compared to other types of property. 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 might not persist in the future, it still presents additional burdens for rental property investors in the present time.
So are manufactured homes a good investment? Well, they can be, depending on the location quality, and ability to secure financing.
Are you looking for your next West Ashley investment property? Your local team at Real Property Management Distinguished Care can help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 828-342-9683 to learn more!
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