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Is a Manufactured Home a Good Investment? Learn All About It

Manufactured homes are becoming increasingly popular, both for investors and homeowners. As resource scarcity continues and with our ever-changing economy, you don’t want to sleep on investing in manufactured homes — Just check out our short video about the benefits of manufactured home investing.

Continuing, we’ll discuss why manufactured homes can make excellent investments and their seven benefits over other real estate assets.

Related: Are Condos a Good Investment?

Are Manufactured Homes a Good Investment?

One of the biggest concerns many investors express about mobile homes is that their values are known to depreciate. However, depreciation isn’t necessarily a bad thing for an investor.

Why? Because depreciation allows manufactured home investors to deduct part of the home’s value yearly against their operating profits.

If you plan on renting out the manufactured home, another concern you might have is occupancy rates. Fortunately, manufactured housing typically has higher tenant retention rates than similar assets.

In addition, fewer maintenance costs, high cap rates, and relatively low per-unit pricing make manufactured homes attractive to many investors — with average cap rates of 7-12% and the lowest cost-per-unit out of every real estate asset class, manufactured homes keep looking better and better.

Curious about mobile home investing? Chat with us — let’s discuss your options.

7 Reasons to Invest In a Mobile Home

Buying a mobile home, whether to rent long-term or live in, comes with several advantages over other types of real estate. See why manufactured homes can be a fantastic investment:

  1. Affordability

Manufactured homes and their parts are cheaper than typical site-built homes for various reasons. Mainly, because they are made in a factory setting, labor and material costs are far cheaper than traditional homes.

Plus, most mobile homes are extremely energy efficient, lowering utility costs.

Finally, maintenance costs are more affordable for manufactured homes. For example, if you or your tenant experience a plumbing issue, it will be much less of a setback than if the same problem occurred in a site-built property.

  1. Structural Strength

Many people look at manufactured homes and worry about the quality of materials, building practices, etc.

Ever since 1976, manufactured homes must follow the HUD code, which dictates the quality to which standard mobile homes must be built.

These standards include ensuring proper practice for structural design and construction, energy efficiency, fire safety, and the transportation of manufactured homes from the factory to the lot where they will sit.

Every manufactured home in the US will have a permanent red seal showing all of the requirements outlined in the HUD code were met.

  1. Versatility

Manufactured homes are highly versatile, both for long-term and short-term purposes. If the home sits on a suitable long-term site and not in a park, you can often add additional modules onto the home, altering it to fit your needs for a much more reasonable price than adding onto a stick-built property.

Prefab homes are excellent as a “starter home;” you can build bigger in the future and turn a single home into multiple rentals.

Even though it can be a logistical challenge and expensive, you can also have manufactured homes moved if it sits on a short-term lot or rented property.

Related: How to Start Renting Out a House

  1. Eco-Friendly and Energy-Efficient
 Manufactured homes with solar panels on their roofs

A huge advantage of manufactured homes is that they are energy-efficient and eco-friendly. You can thank the HUD code for this; it ensures a high degree of efficiency.

For example, insulated skirting, wall insulation, under-home insulation, on-demand water heaters, and energy-efficient windows are mostly standard for all mobile homes. You’ve probably seen appliances that are Energy Star certified, but did you know that an entire manufactured home can receive that certification?

Plus, many manufactured homes have state-of-the-art bathrooms and kitchens with water-saving plumbing fixtures and energy-saving appliances. And adding things like energy-efficient lighting are relatively simple, affordable upgrades you can make.

  1. Customization

From small starter homes to large, luxurious retirement manufactured homes, you can make just about any customizations and personalizations that you can dream of, whether you buy a new mobile home and make changes from the beginning or you buy an older manufactured home and add on to it, the possibilities are endless.

As a bonus, updating or repairing fixtures, flooring, appliances, etc., is often cheaper, easier, and faster for manufactured homes than traditional houses.

  1. Low Cost for High Luxury

A manufactured home does not mean a run-down trailer home. There are options for high-quality finishes and distinctive floor plans as complex and luxurious as site-built homes.

You can add pretty much any luxury amenities to manufactured homes to increase their value — hardwood floors, fireplaces, granite countertops, vaulted ceilings, kitchen islands, etc.

Outdoors manufactured homes can also have garages, decks, sunrooms, patios, high-end landscaping, and any other feature that a traditional residence could have. And while all of these additions won’t be cheap, they will cost less than installing the same amenities in a site-built house.

  1. Financing

Buying a mobile home, whether as an investor or a homeowner, is as easy (or easier) than buying a stick-built home. You just have to approach the loan process slightly differently.

At Mares Mortgage, we help potential buyers navigate the manufactured home financing process and offer various loans to get you the best deal.

As with buying any property, your employment, creditworthiness, debt-to-income ratio, etc., all play a part in your ability to purchase a manufactured home.

Worried about getting financing to purchase a manufactured home? See how we can help, or reach out to us at 949-536-9551.

Should You Invest In a Manufactured Home?

A man on a laptop wondering if he should invest in a manufactured home

Whether you’re making a long-term investment, planning on renting out a manufactured home, or looking for a more affordable way to live, investing in a manufactured home can be an excellent idea.

Manufactured homes offer the same amenities as traditional housing at a more affordable cost and are often even more customizable than other stick-built houses. 

If you’re curious about investing in a mobile home or have questions about the financing process, give us a call at 949-536-9551 or apply online here.

Related: Comparing Home Loan Programs


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