As a Greensboro rental property investor, you are oftentimes on the lookout for a good deal on a property. You may be asking if manufactured homes are a good investment. On the surface, it may really seem like the ideal option for your next rental property. Manufactured homes are popular in a lot of different parts of the country. But, in fact, there are quite a lot of pros and cons that you should think of before ever deciding if a manufactured home is the right choice for your next investment property.
Part of the major advantages of acquiring a manufactured home is that they are often lower in price than other sorts of single-family homes. As to how manufactured homes are built and installed, their cost per square foot could be significantly lower than that of other properties, even those of similar age and size. And where new construction may be out of your price range as an investor, a new manufactured home will probably be so much more affordable. They are equally more quick to build, frequently cutting the time of construction to half of the traditional homes. That suggests that you could potentially buy and immediately rent a brand new home for roughly the same cost as a fixer-upper that will take months to have ready for your first tenant.
The obvious benefits of investing in manufactured homes involve quality and eco-friendly design. Far from previous years, today’s manufactured homes are generally the same or better than traditionally-built homes in quality. Factory standards for manufactured homes are very precise, which increases the possibility that the one you have will be structurally sound, attractively designed, and energy-efficient. Various kinds come complete with upgraded insulation both under the foundation and in the walls. They additionally give on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. All of these eco-friendly features can assist in reducing utility and maintenance costs.
At the same time, there are several drawbacks to investing in manufactured homes. Among the top hurdles to procuring a manufactured home to take advantage of as a rental is finding a good location to build it. Despite that the home’s cost might be relatively low, the cost of land must also be factored into the investment property’s overall price. The cost, zoning, and land availability may prove to be insurmountable challenges, especially in urban or suburban areas.
Going after and getting a pre-existing manufactured home may enable you to overcome this dilemma, although it also brings up a second common disadvantage of manufactured homes: long-term value. There is some debate pertaining to whether manufactured homes appreciate enough to make them worth buying as rental properties. In many locations, there is a lingering stigma in relation to manufactured homes that can severely limit their future value.
On a final note, it may be tougher to finance a manufactured home than other types of property. It has something to do with the fact that quite a lot of mortgage lenders don’t consider manufactured homes as “real property.” The perceived impermanence of a manufactured home may induce various lenders to refuse to loan you sufficiently enough to cover both the land and the home itself. Even though this objection may be overcome with time, it presents additional hoops that rental property investors must jump through.
So are manufactured homes a good investment? The most ideal answer is that they can be, depending on the location, quality, and ability to secure financing.
While doing research on every potential income property is a lot of work, Real Property Management of the Triad can help lighten your load. We offer free rental property analyses for investors, which can help you more easily identify whether the income property you want to buy is a profitable option. Contact us online or call us at 336-355-6677 or 336-777-7444 to learn more!
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