Free Mobile Home Info

Mobile Home Investing
What you need to know

Mobile Home Investing is very similar to other types of investing in rental property, with of course a few differences! 

The first, and main consideration is if the Mobile Home is located in a managed park.  If so, you MUST contact the management before buying the home.  Why?  Well some Mobile Home Parks do not allow any of their residents to rent out their homes.

The managers and owners want the people who live in the park to be of a certain caliber, they want people who care about their homes and keep them up to a certain standard. Your tenants will not have too much at stake and therefore may not care for your property like you would.

Make sure that you follow these rules and do your homework!

However, once you determine that it is ok to rent the home out, or if you own the land the home sits on, then Mobile Homes investing makes perfect sense.

This is due to their low cost.  Mobile Homes typically will cost much less than other single family residences of comparable size, rooms, and bathrooms.

Watch this video on MH investing

Drawbacks to Mobile Home Investing

Mobile and Manufactured Homes are considered Personal Property - not Real Property.  Therefore, they will fall under personal property laws, however, the habitability laws are also in effect.  So, do your homework in this area.  As a landlord, you must comply with all habitability laws and codes: heat, water, leaks, safety issues, etc. are of the utmost importance - do not expect to provide sub-par living conditions and get away with it.  The Personal Property laws put the responsibility on the owner much more than Real Property laws.  You must provide a home that meets all the health and safety codes in place when it was built, with other upgrades to safety, such as smoke detectors in every room.

Another drawback is financing - Mobile Home financing is hard enough without adding the issue of non-owner occupancy. Finding a lender to finance a Mobile or Manufactured Home that will be rented out is near to impossible.  We are researching this now, so check back if you need financing.

Basics of being a landlord

Hopefully if you are interested in Mobile Home Investing you have already explored how to go about buying a property to rent out, areas that would be good for a rental, what your budget is, and what contract you would need.  But if you need the basics covered, check out this link for more information.

Mobile Home Investing using Lease Options

One way to buy or sell a Mobile Home is with a Lease Option (also known as a Lease Purchase or Rent to Own).  This site is not set up to go into the exact process of how to do this, why, how to protect yourself, and how to profit using this technique, so for more information on this topic check out this professional source.  But here is a simple break down of the process and why it is beneficial in a lot of cases:

Lease purchase as an owner

If you own a property and you want to sell it, consider a lease purchase - you agree with the buyer to lease the property to them for a specific period of time for a certain amount of rent. Normally this amout is slightly higher than market rent with the extra (some or all) going towards the purchase price when they buy.  There is also an option to buy agreed on, which pre-determines the purchase price ahead of time.  There may or may not be extra money paid for this option (called option consideration).  Then, between now and the end of the lease term the buyer has the right to buy at the agreed on price, or walk away at the end of the lease period.  Why this is good for you as an owner:  You get higher than market rent, and hopefully option consideration.  If the buyer buys, then you profited while leasing and when you sold.  If the buyer walks, then you profited while leasing and you keep the option considation, and now you get to do it all over again!

Lease purchase as a buyer
If you are looking to buy a property (or Mobile Home Investing), consider a Lease purchase - you agree with the seller of a home to lease the home for a specific period of time for a certain amount of rent.  This amount could be higher or the same as market rent.  Try to get the seller to agree to apply all or most of the rent to the purchase price if you end up buying the home.  Try to get the longest period of time on the lease that they will allow.  

Now, you will also be optioning the home to buy it in the future - you could exercise this option right away, or at the end of the lease period (if you find a buyer for higher than what you agreed to, this might work out well!).  Try to get the option consideration as low as possible, but if you have to pay some, the make sure the seller will apply it to your purchase price.

Finally, you don't have to buy at all, you can walk if you don't like the place for any reason.  This makes the risk on your side so much less - you get to live in the property and completely check out the neighborhood and the home before fully committing to buying it.

Successful Mobile Home Investing will require you to be flexible in your buying and selling methods.  Using a Lease Purchase is just one more way to get this done with a lot of flexibility. By Will Cunningham

Additional Manufactured Home Info

Here are some related topics, click on the underlined words for more information.

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