As a Lebanon rental property investor, you are constantly on the lookout for a good deal on a property. You may be thinking if manufactured homes are a good investment. On the surface, it may look like the ideal option for your next rental property. Manufactured homes are popular in countless different parts of the country. But really, there are various pros and cons that you should take into consideration prior to deciding if a manufactured home is the right choice for your next investment property.
Classified among the greatest advantages of obtaining a manufactured home are that they are often lower in price than other kinds of single-family homes. Considering how manufactured homes are built and installed, their cost per square foot may be significantly lower than that of other properties, even those of similar age and size. And where new construction could be out of your price range as an investor, a new manufactured home will possibly be far more affordable. They are likewise quicker to build, usually cutting the time of construction to half of the traditional homes. That denotes 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.
Other clear benefits of investing in manufactured homes are the quality and eco-friendly design. Not like in past years, today’s manufactured homes are mostly the same or better than traditionally-built homes in quality. Factory standards for manufactured homes are very rigorous, which increases the probability that the one you obtain will be structurally sound, attractively designed, and energy-efficient, too. Several of those come complete with upgraded insulation both under the foundation and in the walls. They, as well, come with on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. All of these eco-friendly features can aid reduce utility and maintenance costs.
But however, there are some drawbacks to investing in manufactured homes. Among the principal hurdles to purchasing a manufactured home to make use of as a rental is finding a good location to build it. Even if the home’s cost could 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.
Locating and acquiring a pre-existing manufactured home may help subdue this issue, though it raises a second common disadvantage of manufactured homes: long-term value. There is some debate related to whether manufactured homes appreciate enough to make them worth buying for rental properties. In certain locations, there is a lingering stigma regarding manufactured homes that can severely limit their future value.
One last note, it may be more difficult to finance a manufactured home compared to other types of property. The reason for this is that various mortgage lenders don’t consider manufactured homes as “real property.” The perceived impermanence of a manufactured home may cause several lenders to refuse to loan you adequately enough to cover both the land and the home itself. Although 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 excellent answer is that they can be, depending on the location, quality, and ability to secure financing.
Are you looking for your next Lebanon investment property? Your local team at Real Property Management Indianapolis Edge can definitely help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 317-420-8500 to learn more!
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