ARE MANUFACTURED HOMES GOOD RENTALS?
This going to be a relatively short blog. The answer is YES, manufactured homes make good rentals! Alright, think about this. Site built homes are just plain expensive. If you can find one that isn't then it usually requires so much work and money to fix it up that it ends up being expensive in the long run anyway. Mobile homes are inexpensive and you can generally find a good used one that has already been fixed up and is ready to rent. At the end of the day, anybody who owns rent houses is looking for one thing: Return on Investment (ROI).
GOOD RENTALS? LET'S COMPARE
Obviously, rent is different throughout the country so you would have to put you own figures in here but for now I am going to use the standard going rate for rent in the Southern Oklahoma region.
It will probably cost you $50,000 or more for an older 1,200 to 1,500 sq.ft. site built house that most likely still needs work, but lets assume that it is ready to rent. You may be able to get $650 or even $700 for a house in this price range. If you borrow the money from a relative that charges you 0% interest (which is highly doubtful), then it would take you approximately 6 years to pay off $50,000 at 0% interest (if you apply all of the rent to paying it back) before you start making any money from your investment.
You can buy a 1,200 sq. ft. Refurbished singlewide for around $20,000 so let's buy 2 of them for $40,000! and put them on a cheap lot in town with utilities and have them hooked up and ready to rent. Let's say it costs another $10,000 for all of that to be done. Now you have 2 - 1,200 sq. ft homes for a total investment of $50,000. 3 Bedroom Single-wide homes will easily rent for $550 a month EACH! So now you have two homes bringing in a total of $1,100 a month. Using the same example as above with 0% interest, you could pay both of these homes off in 3.78 years. What does that mean? While you would still be trying to pay off that site-built home for the next two years (years 5 and 6), the mobile homes would be bringing in $1,100 a month profit...which in turn figures to be over $27,000 profit in those couple of years!
With that $27,000 profit you can turn right around and buy another mobile home, without having to get a loan. Then you have three homes that are completely paid off bringing in $1,650/month ($19,800/year!) with a lot less upfront investment and now no loan to pay back! When it comes to rentals...Mobile Homes are the only way to go if you want to make good money and make it fast!
Contact us today to find out about used manufactured homes.