Ever thought about a mobile home investment, but had some reluctance? I have heard it said that mobile homes aren’t worth it, they’ll go down in value over time, blah blah blah. What I have found though, is when I invest in mobile homes, I win big. The truth of the matter is this: mobile homes are cheaper, and renters have an expectation of paying a certain price (it may be lower than renting a house, but it is usually still higher than what your payments will be after working out a good buy on a mobile home). So let me address some of these common fears and questions you may have.
Q. I’m afraid that if I invest in a mobile home, that it will lose value over time. Is this true?
A. In many cases it is true. Mobile homes do tend to decrease in value over time. But the point of investing in mobile homes is to create an income stream. Look at it this way - if you can charge $600 in rent, while only paying $400 on a mortgage, taxes and insurance, aren’t you making money, while letting the tenants pay for all of your equity? Over time, you might just see that the principle on the mortgage is less than what the property is worth - all the while, you are collecting a monthly check.
Q. I’ve heard that you will end up with nothing but bad tenants in a mobile home. Is this true?
A. This is no more true than getting a bad tenant in a house. Getting good tenants is a matter of screening and experience. Checking rental history and following up with past land lords is great place to start qualifying a tenant. I’ve had good tenants and bad tenants, but as you move forward, you begin to see what kinds of tenants have tend to be bad, and which ones tend to be good. If you are uncomfortable working with tenants in the beginning, or you simply don’t ever want to deal with them, hire a management company. It just means you will have to find a little bit sweeter buy in order to have the money to pay the management company, and still make your desired money.
Q. Mobile homes are cheaply built houses. Won’t they have more repair issues than normal houses?
A. No. In fact - I have had more trouble with some of my older on site built homes than I have had with mobile homes. Though they may be built with lesser materials - age and abuse are the major factors in the frequency of repair needs. So just be mindful if you are buying a 15 year old mobile home, as it may be in need of significant repairs. Just do your homework, and evaluate the costs before jumping in to a deal. It has to make money, or it just isn’t worth doing for me.
The bottom line is as long as you do your homework on the properties you are looking to invest in, you should be well prepared not only to manage the investment well, but also to make a good deal of money. But the specific advantage of mobile home investing is the significantly lower risks, and ability to leverage your money into more deals. This spreads your assets, while creating multiple streams of income. So compare that to tying up all your money in one nice house, and depending on one tenant to make your money.
