A good deal on a property is probably something you look for constantly as a Elgin rental property investor. You may be unsure as to whether manufactured homes are a wise investment. It can appear to be the best choice for your next rental property at first glance. Especially as the popularity of manufactured homes is widespread across the nation. But before choosing a manufactured home as your next investment property, there are a number of benefits and drawbacks to take into account.
The fact that manufactured homes are frequently more affordable than other single-family home types is one of the main benefits of buying one. Their cost per square foot can be significantly lower than that of other properties, even those of similar age and size, because of how manufactured homes are constructed and installed. And where new construction may be out of your price range as an investor, a new manufactured home will probably be significantly less expensive. They are also easier to construct, frequently taking half as long as conventional homes. That implies that for roughly the same price as a fixer-upper that would take months to prepare for your first renter, you could buy and instantly rent a brand-new property.
Design that is high-quality and environmentally friendly is another advantage of purchasing manufactured homes. Today’s manufactured homes are usually of comparable quality to traditionally built homes, if not superior to them. You have a better chance of getting a manufactured home that is structurally sound, attractively constructed, and energy efficient because of the strict factory standards for manufactured homes. The majority already have upgraded insulation in the walls and beneath the foundation. In addition, they offer energy-efficient windows, energy-saving fixtures and appliances, and on-demand water heaters. All of these eco-friendly features can reduce utility and upkeep costs.
Investing in manufactured homes does have certain disadvantages, though. Finding a suitable location to build a manufactured home is one of the most difficult challenges in purchasing one to use as a rental. The price of the land must also be taken into account even though the home’s price may be relatively low. Cost, zoning, and land availability issues could be too difficult to overcome, particularly in urban or suburban areas.
This problem might be solved by locating and purchasing an existing manufactured home, but this also raises a second typical drawback of prefabricated homes: long-term value. The question of whether manufactured homes appreciate sufficiently to make them worthwhile investments for rental properties is one that is up for debate. In some areas, the value of manufactured homes is severely hampered by an enduring stigma.
Finally, a manufactured home may be more difficult to finance than other types of real estate. Numerous mortgage lenders do not consider manufactured homes to be “real property.” The perception of a manufactured home’s ephemeral nature may lead some lenders to deny you a loan sufficient to cover both the land and the home. While this objection might eventually be overcome, there are yet additional hurdles for rental property investors to clear. Are manufactured homes, then, a wise investment? The best response is that they might be, based on factors like quality, location, and financing availability.
Do you need a new investment property? Our Elgin property managers help connect rental property investors with off-market deals you can’t find elsewhere. Contact us online to learn more!
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