Have you been renting an apartment for what feels like far too long? Have you been thinking lately, about pursuing the American dream – owning your own home? It would be great to have your own yard, too. You may have been very excited about owning your own home until you realized what the prices of today’s brick-and-mortar houses were. Now what?
Don’t despair. Buying a manufactured home could be the answer to your dilemma. Prices for these homes are a fraction of the enormous price tags on brick-and-mortar houses.
Possibly you are in the market for making an investment, rather than purchasing a home in which to live. Would the purchase of a manufactured home be a smart investment? You could rent it out, after all, just like you would rent out an apartment building you might buy.
Let’s take a look at both buying a manufactured home in which to live and purchasing one as an investment.
Purchasing a Place to Live
If you’re buying a new manufactured home, and you plan on living in it, it’s a great value. Where mobile home purchases are concerned, there are numerous benefits besides the affordable price tag.
Decide on whether you’re going to place your new mobile home in a mobile home community – on leased land – or if you’re going to own both the land and the newly purchased home it will sit on. Additionally, make sure that whatever land you’re going to place the home on, the deal is signed and secure.
Though purchasing one of today’s new manufactured homes is affordable, some individuals may choose to save even more money by purchasing an older home that is pre-owned. Just make sure it has a HUD tag affixed to the rear exterior. This means it meets certain safety criteria set forth by the United States Department of Housing and Urban Development. Also, have it professionally inspected.
So you have no regrets, consider any and all home sizes, floor plans, and numerous customizable options. You might be surprised at how many specifications you can have customized to your wants and needs.
Remember: Compared to renting an apartment, there are a lot more responsibilities where maintenance is concerned now that you own your manufactured home. If the roof leaks, you have to get it fixed. If the dishwasher breaks down, you have to replace it. What’s more, it’s up to you to make sure your new rental property is insured.
Purchasing As an Investment
If buying a manufactured home is a good investment as a residence, is it an equally good investment as simply a rental property? That depends.
The following factors should be considered if you’re wondering whether or not a manufactured home is a smart rental property investment:
- Are you prepared to see to all the maintenance needs where a mobile home is concerned? Failure to do so will mean the life expectancy of the manufactured home will decrease significantly.
- Will you be able to insure it against damage from storms, bad tenants, etc.?
Reselling your mobile home may present problems. Additionally, just like when you drive your new car off the lot, mobile homes drop in value:
- Though the word “mobile” makes it sound like you can just pick up and move the home anytime you want to, it’s not that easy to do. If you’re in a community, you’re hooked up to utilities. If you’re on private land, that home may be secured to a foundation. The buyer might not want to live in the community the trailer is in. Moving them can run upwards of thousands of dollars.
- What about devaluation? If you are putting your mobile home on private property, the value of the property will probably go up over time – but not so much the value of the home itself. If you’re simply selling a mobile home outright after owning it for a while, the chances of you getting what you paid for are slim to none. Unless, of course, you have invested significantly in upgrades that offer a positive ROI.
So, should you purchase one of today’s new manufactured homes? You should. You have to decide whether it will be a straight-up investment or your new proudly owned home. You also will need to decide if you should buy used or new. But that’s a different topic for another day.