As a Mira Mesa rental property investor, you are probably searching for a good deal on a property constantly. You may wonder whether manufactured homes are a wise investment. At first, It may appear to be the optimal option for your next rental property. In numerous regions of the country, manufactured homes are prevalent. But before deciding whether a manufactured home is the best option for your next investment property, you should weigh many advantages and disadvantages.
One of the biggest benefits of purchasing a manufactured home is that they are frequently less expensive than other single-family home types. Due to the manner in which manufactured homes are constructed and installed, their cost per square foot can be significantly lower than that of other properties, even those of comparable age and size. Additionally, a new manufactured home will probably be far less expensive than new construction, which may be out of your budget range as an investor. In many cases, the construction time is halved compared to traditional houses, making them quicker to build. That implies that for roughly the same price as a fixer-upper that would take months to prepare for your first renter, you could buy and instantly rent a brand-new property.
Quality and environmentally friendly design are additional advantages of purchasing manufactured homes. Nowadays, unlike in the past, the quality of manufactured homes is usually on par with or higher than that of traditionally constructed homes. The stringent factory standards for prefabricated houses increase the likelihood that the home you purchase will be structurally solid, tastefully built, and energy efficient. Most have upgraded insulation in the walls and under the foundation. Additionally, they provide energy-efficient windows, on-demand water heaters, and fixtures and appliances that conserve energy. All of these eco-friendly features can reduce utility and upkeep costs.
However, investing in manufactured homes has a few disadvantages. Finding a suitable location to build a manufactured home is one of the biggest obstacles to buying one to use as a rental. The price of the land must also be taken into account even though the home’s price may be relatively low. Cost, zoning, and land availability may provide insurmountable obstacles, particularly in urban or suburban settings.
Finding and purchasing a pre-existing manufactured home may help with this issue, but it also raises a second common drawback of these homes: long-term value. Manufactured homes may increase in value to the point where purchasing one makes sense for rental properties, but this is up for debate. In some communities, the future value of manufactured homes may be severely constrained by an ongoing stigma.
Lastly, financing a manufactured house may be more difficult than financing other property types. The term “real property” is not often used to describe manufactured homes by mortgage lenders. Some lenders might decline to provide you with a loan large enough to pay for the land and the home itself because they feel that a manufactured home is temporary. Although this objection might eventually be overcome, it adds to the challenges facing investors in rental properties. Therefore, are manufactured homes a worthwhile investment? The best response is that, depending on the setting, level of quality, and availability of financing, they might be.
Do you need a new investment property? Our Mira Mesa property managers help connect rental property investors with off-market deals you can’t find elsewhere. Contact us online to learn more!
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