A good Bixby rental property investor is always on the lookout for a good deal on a property. The thought of manufactured homes as a good investment might have crossed your mind. At the onset, it looks like the ideal option for your next rental property. Manufactured homes are a popular choice in different places around the country. Although, there are a number of pros and cons that you should consider before you finally decide on getting a manufactured home as an investment property.
One advantage of buying a manufactured home is that they often cost a lot less than other kinds of single-family homes. Manufactured homes typically cost less per square foot because of the manner that they are built and installed. A new manufactured home would be an affordable option for an investor who does not have a budget yet for new construction. Manufactured homes are also much faster to build compared to traditional homes. Comparing that to getting a fixer-upper, you can buy a brand new home and rent it out immediately to your first tenant!
Other benefits of investing in manufactured homes include the quality and eco-friendly design. Unlike before, today’s manufactured homes usually have the same or better quality than traditionally built homes. Because of very strict factory standards, manufactured homes are structurally sound, attractively designed, and also energy-efficient. Most also have upgraded insulation both under the foundation and inside the walls. They also offer on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. With these eco-friendly features, you can save a lot in utility and maintenance costs.
However, there are also drawbacks 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. Even if the home’s cost is low, the cost of land will still need to be factored into the investment property’s overall price. Cost, zoning, and land availability may become big challenges, especially in heavily populated areas.
Acquiring a pre-existing manufactured home may help overcome this challenge, but it brings to light the second disadvantage of manufactured homes: long-term value. It is still debatable if manufactured homes appreciate enough for them to be worth buying as a rental property. There is still a lingering stigma about manufactured homes in some areas and this can greatly 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. Though it may not matter that much in the future, rental property investors must still contend with this at the present time.
So are manufactured homes a good investment? The best answer is that it will all depend on the location, quality, and ability to secure financing.
Are you looking for your next Bixby investment property? Your local team at Real Property Management Tulsa can help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 918-532-7020 to learn more!
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