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Can You Buy a Mobile Home as an Income Property?


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Categories
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One interesting idea related to rental property investing is the concept of mobile home investing. It sounds appealing because a mobile home definitely costs less than a traditional multi family income property. But just like any long term investment strategy, this one also has its share of pros and cons.

The advantages and benefits of this type of investment are as follows. First, as previously mentioned they cost less than a regular investment property, and thus your financial risk is lower. Similarly, you will also have lower building insurance, utility, and property tax expenses, and repairs and property maintenance expenses will be lower. Another benefit is that there is less competition in this market. Therefore when you are looking to buy, you will be in a better negotiating position.

On the flipside, the asset itself is less valuable than a rental property. While this will reduce your acquisition costs, it will also reduce the amount of cash you will receive when you sell the unit. Additionally, the mobile home investment market is relatively unknown. Thus, finding a buyer when you are ready to sell could be a challenge. Finally, you may find it difficult to get a property mortgage on this type of investment. Because the market is underpenetrated, lenders tag investments within the market as being higher risk.

All in all, I think this type of investment is probably worthy of consideration. Although each unit is less valuable than a regular income property, you could make up for this with volume. I think the main thing you need to have for this is cash on hand, as the banks probably won’t finance you. If you can pay cash for these units, it probably makes sense as a solid, long term investment strategy.



One Response to Can You Buy a Mobile Home as an Income Property?

  1. donald whitten says:

    I have 1.12 ac with a woodframe home amd a ground set 89 double wide with a ext . My son wants to buy the property, who lends on these types of investments?

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