You are probably constantly searching for a great deal on a property if you are a Newport rental property investor. You might be wondering whether manufactured homes are a wise financial decision. It may appear to be the best option for your next rental property at first glance. In many different areas of the U.S.A., manufactured homes are very common. Before deciding if a manufactured home is the best option for your next investment property, you must weigh a number of pros and cons.
One of the biggest benefits of purchasing a manufactured home is that they are frequently less expensive than other single-family home types. The way manufactured homes are constructed and installed can result in a significantly lower cost per square foot than other types of properties, even those that are similar in size and age. And where new construction may be out of reach for you as an investor, a new manufactured home will likely be considerably more affordable. In many cases, the construction time is cut in half compared to conventional houses. So for about the same price as a fixer-upper that would take months to get ready for your first tenant, you could buy and rent a brand-new home right away.
Quality and eco-friendly design are additional advantages of purchasing manufactured homes. Today’s manufactured homes are often on par with or superior to traditionally-built homes in terms of quality. It is more likely that a manufactured home you purchase will be structurally sound, attractively designed, and energy efficient due to the stringent factory standards. The foundation and walls of the majority already have upgraded insulation. On-demand water heaters, energy-efficient windows, and energy-saving fixtures and appliances are also available. Costs associated with utility and maintenance can be decreased by all of these eco-friendly features.
But investing in manufactured homes has some disadvantages as well. 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. Although the cost of the home may be relatively low, the cost of land must also be factored into the overall price of the investment property. Particularly in urban or suburban areas, the costs, zoning, and land availability may prove to be insurmountable obstacles.
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. The future value of manufactured homes may be severely constrained in some places 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. Despite the fact that this objection might eventually be overcome, it adds to the challenges facing investors in rental properties. Are manufactured homes a wise investment, then? The most appropriate answer is that they potentially could be, subject to factors like quality, location, and financing availability.
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