If you are like most Greenwich rental property investors, you are probably always looking for good property deals. You may have wondered if manufactured homes are a good investment. On the surface, it would seem like it is the ideal option as an addition to your rental properties. Manufactured homes are popular all over the country. However, you have to look into the pros and cons before deciding to buy a manufactured home as your next investment property.
Perhaps one of the biggest advantages of purchasing a manufactured home is the price. They are often priced much lower than other types of single-family homes. The way manufactured homes are built and installed makes it possible for its cost per square foot to be significantly lower than that of other properties. And if you’re an investor who is not in the market for new construction, a manufactured home will likely be more affordable. They are also faster to build –often taking only half the time it takes to construct a traditional home. This means it would be possible for you to buy and immediately rent a brand new home for nearly the same cost as a fixer-upper that would take much longer to have ready for your first tenant.
Other benefits of investing in manufactured homes include the quality and eco-friendly design. Compared to years ago, modern manufactured homes usually have better quality than traditionally-built ones. Because factory standards for manufactured homes are very strict, chances are you will be buying one that is structurally sound, attractively designed, and energy-efficient too! They also typically come with upgraded insulation both under the foundation and in the walls. They also offer on-demand water heaters, energy-saving fixtures and appliances, and energy-efficient windows. All these eco-friendly features help lower utility and maintenance costs.
There are also a number of disadvantages to investing in manufactured homes. Finding a good location to build a manufactured home to use as a rental can be a challenge. You must remember that the cost of the land has to be factored into the investment property’s overall price on top of the home’s low cost. The cost, zoning, and land availability can prove to be great challenges, especially in urban and suburban areas.
Buying a pre-existing manufactured home could help overcome this challenge but will certainly bring up the second disadvantage of manufactured homes: long-term value. There is still some debate as to whether manufactured homes hold value enough to make them into rental properties. Some areas still hold a stigma about manufactured homes that can limit their future value.
Lastly, getting financing for a manufactured home can be harder than other property types. This is because many mortgage lenders don’t consider manufactured homes as “real property.” The perceived impermanence of a manufactured home may cause some lenders to refuse to loan you enough to cover both the land and the home itself. Although this objection might not persist in the future, it still presents additional burdens for rental property investors in the present time.
So are manufactured homes a good investment? It would really depend on the location, quality, and ability to secure financing.
Are you looking for your next Greenwich investment property? Your local team at Real Property Management Southern Connecticut can help! We help connect rental property investors with off-market deals that you can’t find elsewhere. Give us a call today at 203-821-7303 to learn more!
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