| Whether you call them trailers, mobile homes, or | | | | Finding and Investing in Manufactured Homes |
| more accurately, manufactured homes, they're worth | | | | The opportunities for mobile/manufactured home |
| incorporating into your real estate investing plan. | | | | investing are greatest in younger, smaller cities, the |
| Manufactured homes are the most affordable type | | | | suburbs, and rural areas. While you're not likely to find |
| of housing available and there is a tremendous | | | | mobile homes in New York City or downtown |
| demand for affordable housing in the United States | | | | Boston, chances are you won't have to go too far |
| today. Consider that in December 2004, the median | | | | out to find a market for this type of affordable |
| price of a site-built home was $187,000 and the | | | | housing. |
| median price of a new manufactured home was | | | | Study your market and test the waters by buying a |
| $50,000. With stricter building codes and new | | | | few units. Look for pre-owned homes that might |
| technologies, the quality of manufactured housing | | | | need a little fix-up; they can be bought for a fraction |
| continues to improve. | | | | of the cost of a comparable new unit. Once you're |
| For the investor, manufactured homes generate the | | | | familiar with this aspect of real estate investing, |
| highest cash flow of almost any investment. The | | | | consider moving up to park ownership. |
| reason is logical: the market rents for manufactured | | | | If you're interested in multi-unit residential, |
| homes are only slightly lower than for comparable | | | | manufactured home parks are a great alternative to |
| site-built homes, but manufactured homes cost | | | | small and even medium-sized apartment buildings. Not |
| substantially less to buy. | | | | all parks are created equal. They vary tremendously |
| Let's clarify the terms of this business. Though mobile | | | | in size and amenities. The three basic types of parks |
| home and manufactured home are often used | | | | are family, retirement, and RV parks. |
| interchangeably and both refer to factory-built | | | | Family parks allow tenants of any age and are the |
| housing units, mobile homes are mobile housing units | | | | easiest to find tenants for. However, they tend to |
| built before June 15, 1976 and manufactured homes | | | | have greater tenant turnover and are more |
| are mobile homes built after that date. Though most | | | | management-intensive. The over-55 retirement |
| mobile and manufactured homes are technically | | | | communities have lower tenant turnover and are |
| mobile because they have wheels and can be | | | | easier to manage, but it's more difficult to find |
| moved, the majority of them are installed on a site | | | | tenants because of the age restrictions. RV parks |
| and never relocated. | | | | have the greatest turnover with large seasonal |
| Mobile homes can be located in parks or on private | | | | variations and high management intensity. Unless your |
| land. In parks, homeowners typically lease their lots | | | | location is superior, this type of park is the most |
| from the park owner, who sets rules and regulations | | | | difficult to find tenants for. |
| for the park, maintains the common areas, and may | | | | One strategy for investing in mobile home parks is to |
| offer various amenities. In most cases, when a | | | | buy a park with a high vacancy rate, great income |
| mobile home is located on private land, the owner of | | | | potential, and poor management. Get the |
| the home also owns the land. | | | | management straightened out, fix up the park, and fill |
| If you are not familiar with the mobile home market | | | | vacant units. Then put the park on the market at its |
| and have some negative preconceived notions about | | | | new value and make a quick profit. Or keep the park |
| it, let's deal with those right now. Yes, there are | | | | and enjoy its increased income. |
| mobile home parks out there that fit the negative | | | | Essentially any proven real estate investment |
| stereotypes you may have heard with problematic | | | | strategy (wholesale, foreclosure, lease option, and so |
| occupants and run-down facilities. But there are | | | | on) will work as well with manufactured homes as it |
| substantially more middle-income families and retirees | | | | does with site-built homes and will usually generate |
| choosing to live in manufactured homes, and these | | | | greater cash flow. Because manufactured homes |
| are people who take pride in and care of their homes | | | | cost less to buy, they are great opportunities for a |
| and neighborhoods. Manufactured homes have never | | | | beginner without much cash even as they are |
| been more respectable and desirable than they are | | | | tremendously attractive to seasoned investors who |
| today, and that trend is likely to continue as on-site | | | | want strong returns. Chances are, they're perfect for |
| building costs continue to rise. | | | | your own wealth-building plan. |