Perhaps the buzzword in the housing industry has already reached your ears. Manufactured or mobile homes have had a fairly growing demand over the past several years. The factors for this increasing popularity are the need for more affordable housing, the interest in smaller houses, and the tight competition in the traditional housing market.

For people who want to invest in manufactured homes, the common question is whether they can include this type of housing to diversify their investment portfolio. It’s crucial to put this query because many people are unfamiliar with manufactured houses.

This blog post will tackle all you need to learn about manufactured homes and how it will impact your investment by including them in your portfolio.

A Brief History of Manufactured or Mobile Homes

Long history, but we’ll make it short. While the popularity of mobile houses just boomed in recent times, the concept is nothing new. If you know about covered wagons, camper vans, and tiny houses, all these have some influence on the manufactured or mobile homes of today.

The Federal Mobile Home Construction and Safety Act of 1974 made formal mobile housing in the United States. Around this time, the term “mobile homes” was changed into “manufactured homes” because many people preferred this term.

The interest in this type of housing is like a love-hate relationship. There came a time when the demand for manufactured homes dwindled. In the 2000 economic crash, people were looking for affordable housing, which led to the popularity of this type of housing. In recent years, folks prefer manufactured homes because of their lifestyle choices.

Things to Know When Investing in Manufactured Homes

If you buy a single-family house, the average cost will range from about $375,000 to $400,000. The price range for manufactured homes is between $150,000 to $170,000, which is lower than for single-family houses.

The only catch with the price point mentioned for manufactured homes is that the land isn’t included. It means you have to purchase or lease the lot to set up your new dwelling. Typically, you have the option to lease land in a mobile home park, which comes with a monthly fee.

The park owner will be responsible for the maintenance of infrastructure, utilities, amenities, common areas, and roads in the park. Meanwhile, your mobile home and lot are your responsibility.

You should make sure that the neighborhood or area where you buy land allows for the setting up of manufactured homes. It’s also crucial to consider the placement, moving, and construction needed in erecting a house on a vacant lot.

The total cost of a manufactured home may include installation and delivery. However, there’s an additional cost to the purchase price if you buy one unit and relocate it. Still, if you calculate and make a comparison in terms of cost, your investment is more affordable in a manufactured home than a single-family house.

Financing and Insurance Options for Manufactured Homes

Consider the financing options when investing in a manufactured home, especially since mortgage interest rates are high nowadays. Remember that it can be difficult to avail of traditional home loans for manufactured houses because some lenders don’t consider this type of housing as real property.

Still, never lose hope because you can find lenders that will approve borrowers who are investing in manufactured homes. You can look online for such lenders, but be wary of scammers and predatory lenders.

When it comes to insuring a manufactured home, you can find insurance companies that can approve your application. However, you might be paying a bit higher premium because of the vulnerability of manufactured homes to weather conditions. Make sure to look for the best insurance policy for your financial situation.

Another consideration is the difference in appreciation rate between manufactured homes and single-family houses. The former doesn’t increase in value as quickly as the latter. However, you can do maintenance and a few updates to a manufactured home to appreciate its value.

Renting Out a Manufactured House

Since the price of a manufactured home is affordable, the amount you can charge to anyone who wants to rent it is also lower. However, if you have other rental properties, this option is an excellent way to diversify your real estate investment. After all, you can find many tenants looking for the least expensive and low-maintenance rental properties like mobile homes.

Final Thoughts

Yes, you can include manufactured homes in your real estate investment portfolio. The price range for this type of housing is more affordable than single-family units, and there are many tenants looking for mobile homes due to necessity and lifestyle choices. However, you might find it tricky to find better financing and insurance options for manufactured homes. Just make sure to research more on this type of housing before you invest.