The market for manufactured or mobile houses is increasing faster than ever. Nowadays, people want more flexibility in life, rejecting the concept of living in a house for 20 to 30 years. Fortunately, mobile homes meet all the requirements of modern life.
If you’re looking for a relatively new and profitable real estate niche, you should consider investing in a manufactured or mobile homes.
Everything You Need to Know about Mobile or Manufactured Houses
What is a Mobile or Manufactured House?
Usually, to build a house, you’ll have to buy land, store necessary materials and then build a house on that land. But it’s different for mobile or manufactured houses.
Manufactured or mobile homes are built at a factory and then moved to your land. Homeowners can build this manufactured home on either a permanent or semi-permanent foundation. One of the biggest benefits of manufactured homes is that you can take your home wherever you want. You won’t have to sell your property to move to another area or state.
Other Pros of the Manufactured Homes
Low Cost
When you buy a traditional single-family house, you’ll have to spend a significant amount of money. On the other hand, manufactured or mobile homes come cheap. As manufactured homes are built in factories, companies can produce these homes in bulk. That’s why they come so cheap. You can basically buy mobile homes at least 30% to 40% cheaper than traditional homes.
High-Quality Materials & Flexibility in Customization
According to the HUD Code, companies will have to build all the manufactured homes according to standards such as high material quality, fire resistance, strength, transportability, etc. As a result, these homes become more durable and sustainable than on-site homes. Apart from it, homeowners can easily modify mobile homes according to their choices and preferences.
Cons of Mobile Homes
Permission
There are many places in the US that don’t allow mobile or manufactured homes. That’s why before buying a manufactured home, make sure that you have permits for this type of house.
Requires Owning a Land for Traditional Mortgage
If you’re planning to apply for a mortgage for mobile homes, you’ll have to own land first.
Financing Options for Mobile Homes
You can finance your manufactured home in two ways; traditional mortgages and chattel loans. As I mentioned above, to get a mortgage, you’ll have to own land first.
On the other hand, chattel loans are usually used to purchase expensive items like airplanes or manufactures houses.
Again, if you have a bad credit score, there is no better option than the chattel loan. However, the chattel loan has a high-interest rate, and the repayment time is also less compared to the traditional mortgage loans. But if you’re looking for a quick closing, there is no better option than the chattel loan.
No Guaranteed Appreciation
One of the biggest concerns for most real estate investors is appreciation. Unfortunately, with mobile homes, there is no guaranteed appreciation. You’ll only get real estate appreciation when you place it on your own land.
