Mobile homes get a bad rap, but they could really be a good place to invest money. Investing in real estate is a good way to diversify your portfolio. Mobile, or manufactured homes, could be a good little niche in that sector. Should you invest in mobile homes?
What is a mobile home?
Mobile homes, also known as manufactured homes, are residential structures built in a factory or separate location and moved to the desired location. These homes are built according to HUD guidelines.
Those guidelines are as follows:
- Design and construction
- Strength and durability
- Transportability
- Fire resistance
- Energy efficiency
- Overall quality
Why invest in mobile homes?
Social stigma around mobile home parks prevent people from investing in them
Investing in individual mobile homes is difficult because the people that rent them are a (and I’m making a big generalization here) a challenging bunch to deal with. Invest in the grounds and infrastructure where the mobile/manufactured homes are.
There are several benefits to investing in mobile home parks:
- Recession-resistant (held up through the GFC)
- Tenants rarely leave, but sometimes, evictions are necessary (as they are with any real estate endeavor)
- Supply is waning, demand is increasing
- Predictable maintenance costs
- Stigma reduces competition with other investors
- Great financing options
- Limited need for contractors
- They’re inexpensive (you can buy individual units to rent on your property for less than $10,000 – depending on the area and demand)
(List provided by BiggerPockets)
Conclusion
As I mentioned in the beginning, investing in real estate is a great way to diversify your portfolio. It can also be a good way to get a return on your money.
Within the real estate sector, mobile home parks can be a very good niche, for the reasons I mentioned above. Should you invest in mobile homes?
Related reading:
Why Financial Literacy is Important
How to Invest in Real Estate without Getting your Hands Dirty
Hard Money Loans: Benefits for Real Estate Investors
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