A good deal on a property is probably something you look for constantly as a Lynchburg rental property investor. You may be considering 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. However, there are a number of advantages and disadvantages to consider before deciding whether a manufactured home is the best option for your next investment property.
One of the greatest benefits of purchasing a manufactured home is that they are frequently less expensive than other types of single-family homes. 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. And where new construction may be unaffordable for you as an investor, a new manufactured home will likely be considerably more affordable. They are also built more quickly, frequently in half the time of conventional homes. That implies you could purchase a brand-new home and rent it out immediately for roughly the same price as a fixer-upper that would take months to prepare for its first renter.
Design that is high-quality and environmentally friendly is another advantage of purchasing manufactured homes. Unlike in the past, the quality of manufactured homes today is typically comparable to or even superior to that of traditionally-built homes. The likelihood that the manufactured home you purchase will be structurally sound, attractively designed, and energy efficient is increased by the strict factory standards for manufactured homes. The majority already have upgraded insulation in the walls and beneath the foundation. On-demand water heaters, energy-efficient windows, and energy-saving fixtures and appliances are also available. All of these eco-friendly features can reduce utility and upkeep costs.
Investing in manufactured homes does have certain disadvantages, though. Finding a good location to construct a manufactured home for rental purposes is one of the greatest challenges associated with the purchase of a manufactured home. Even though the residence may be inexpensive, the cost of the land must also be taken into account when calculating the total cost of the investment property. Especially in urban or suburban communities, the cost, zoning, and availability of property may provide insurmountable problems.
Finding and purchasing a pre-existing manufactured home may help overcome this obstacle, but it brings up a second common disadvantage of manufactured homes: their depreciating value over time. It is debatable whether manufactured homes appreciate sufficiently to make them worthwhile investments as rental properties. In some areas, the future value of manufactured homes may be severely constrained by an ongoing stigma.
And finally, compared to other kinds of property, a manufactured home could be more difficult to finance. Not all mortgage lenders view manufactured homes as “real property.” Some lenders might decline to provide you with a loan large enough to pay for the land and the home itself because they believe that a manufactured home is temporary. While this objection might eventually be overcome, there are still additional requirements for rental property investors to meet. So, are mobile homes a wise investment? The best response is that they might be, based on factors like quality, location, and financing availability.
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