Investing in mobile homes? You are probably thinking, yeah, I would never do that. But the honest truth is, you can make a lot of money investing in mobile homes, especially with today’s market. Today, I just want to give you some key points as to why investing in mobile homes is good, and how it can make you money.
- Mobile Homes are Cheap
Duh! I know you already know this, but think about it for a second. If you can rent a mobile home for say, $500, and your total PITI is $250, then that is double the money every month!
- Because Mobile Homes are Cheap, You can Rent them Cheap
People are always looking for cheap places to live. If you work a deal for a trailer in a good area of town, it will only take minimal advertising to get it rented. I have a 1 bedroom 1 bathroom duplex in a good area of town right now, and I get many calls every week!
- Your Risk is Low
This is especially attractive for the investor who is just starting out or who doesn’t have much cash. You can buy these deals cheap, fix them up for little to nothing, and have just a small monthly payment to contend with. Just imagine the difference between the mobile home that sits vacant for two months at $250/month, vs a mid-sized house that sits vacant for two months at $650/month. Big difference.
- Often, You will get Cash or a Money Order/Cashier’s Check
I have a couple of renters right now (one is in a double wide trailer) that often pay with this method. It just ensures that you get your money, and don’t have to hassle with processing a check (which could be a returned check, 🙁 ).
Now for the downside. Many investors would contend that a mobile home depreciates over time, and thus is not a good investment. While this may be true in the long run, any mobile home with land that is in good condition will sell fairly well. But even if it doesn’t, you can always work an owner financing arrangement with a good tenant, and get at or more than market value for the property. Further, don’t buy new mobile homes, go for ones that are a few years old and get them at a significant discount.
Also, some investors would say that mobile home tenants are “trailer trash” or a hassle to work with. My answer to this is simply to screen your tenants before signing a contract. They probably don’t know as much as a middle class renter will know, but you can teach them. Screen them, rent to them, then educate them on what you expect as an owner and the importance of paying on time. Most tenants that pass the screening will do their best to work with you.
So there you have it. Low risk, high margin, maybe a little bit more TLC, but overall, I put my stamp of approval on investing in mobile homes. I have one myself, and I would do it again in a heart beat. My payment is about $350, and I am charging $600 in rent. And this is on a10 year note!