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pros & cons of buying and renting double wide trailor

niceperson77 3,451 498 July 19, 2012 at 04:32 AM
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I've been seeing some of these selling for 20-30k with land. Most of them are less than 12 yrs old and outside the city limit so low taxes. From my understanding, it's hard to finance them so only cash buyers.

I have thought about buying a few of them and renting for around $700/month with a $800 deposit. Another possibility would be doing owner financing. I could probably do a $55k purchase price with say $3500 down and finance the rest at say 7%.

Has anyone done this or decided not to?

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#2
I heard with insurance, they treat the home as a "vechicle". The unit will depecriate over time and if destroyed by fire, earthquake etc. they give you the "blue book value" of the home.

Most of the mobile home parks in CA that were destroyed in the wildfires were given like $5000 to rebuild.

I dont believe you own the land at a mobile home park. You lease it from the park owner.
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#3
A mobile home won't appreciate in value like a home will. If a home appreciates in value 100% over 10 years like the real estate market used to, a mobile home might appreciate 25%.
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#4
Mobile homes will only depreciate in value

you buy the dealers mobile home on their land (you're buying their land), if you ever have to move for a job, it's almost impossible as they won't let you! If they do let you sell your land with home, they have to approve the next owners. Some places won't let you rent the home out which also can be a headache if someone messes up and destroys your home that you owe money on
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Last edited by cavan July 19, 2012 at 08:16 PM
#5
Quote from flee View Post :
A mobile home won't appreciate in value like a home will. If a home appreciates in value 100% over 10 years like the real estate market used to, a mobile home might appreciate 25%.
I agree that insurance might be an issue. Especially in places like Florida I shudder to think what a PITA getting mobile home insurance for anything like a decent price must be. Heck, or getting it at all outside of the sate program. God knows I had a hard enough time on my older stick built home like 30+ miles from the water. They will also depreciate. That said, I'll bet that there are plenty of people holding mortgages on regular homes that know depreciation well.
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#6
I cant argue that they wont depreciate but @ less than $30k how much lower can it go? If it is rentable for the next 15 yrs it seems like it would more than pay for itself. As long as it doesnt blow up, seems like it would be worth at least 20k after 15 yrs, no? Assuming its in liveable condition of course.
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#7
I'd base my decision in large part on the type of tenants that inhabit mobile homes in your area as well. When I lived in WV, there were a ton of middle class people living in trailers as it was socially accepted there. On the other hand, in NJ where I grew up, trailer parks were full of lowlifes, and the same holds true for the area of PA that I live now. Now as for trailers on private land, it's a mixed bag where I live now, largely dependent on where the land is located. Basically, I'm just saying that you don't want your tenants trashing the place and devaluing your property in short order.
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#8
Very dependent on area and type of property.
A couple of situations:
A:
Mobile home park with the trailers 10'-20' apart all lined up, ie like trailer park boys style
Probably not the best tenants to actually get paid.
B:
Double wide on 5-10 acres of land.
Tenants could afford a house, but chose to live in a double wide for simple country life.

Here in central TX you have both setups and I would only recommend going with option B.
Much less headaches and you will have better renters in most cases.
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#9
Quote from eddiehaskell View Post :
I cant argue that they wont depreciate but @ less than $30k how much lower can it go? If it is rentable for the next 15 yrs it seems like it would more than pay for itself. As long as it doesnt blow up, seems like it would be worth at least 20k after 15 yrs, no? Assuming its in liveable condition of course.
Around here that's a major concern. It seems that there is a stigma that comes along with living in a trailer. They seem to attract meth makers.

Edit: If they ask if you can get them some Pseudophedrine along with lots of matches and cold packs you probably shouldn't rent to them.
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#10
Quote from flee View Post :
A mobile home won't appreciate in value like a home will. If a home appreciates in value 100% over 10 years like the real estate market used to, a mobile home might appreciate 25%.
In general, houses don't appreciate; land does.
Houses only appreciate if you ignore inflation and/or upkeep expenses (aka depreciation), or if you are in a rapidly inflating bubble.
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#11
Quote from nonlnear View Post :
In general, houses don't appreciate; land does.
Houses only appreciate if you ignore inflation and/or upkeep expenses (aka depreciation), or if you are in a rapidly inflating bubble.
Correct. Houses only tend to appreciate when there is a lack of available homes for sale.
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#12
Quote from nizzy1115 View Post :
Correct. Houses only tend to appreciate when there is a lack of available homes for sale.
Even then it is usually the location (i.e. land) that is appreciating, not so much the structure. If there is a super squeeze on construction labor or materials you might sxee hosues appreciate, but that's not all that common. Of course, this is entirely academic right now, as there are plenty of houses for sale almost everywhere, and construction labor isn't hard to find.
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#13
Manufactured Home = Factory built housing constructed on a steel frame to the National HUD code on or after June 15, 1976. Axles and wheels are attached to the frame for transport from the factory to the homesite. The axles, wheels and tow hitch are removed once the home is set up. The steel frame is set on concrete blocks or metal jackstands which rest on concrete footings or a full concrete slab. Government financing requires these homes to be "tied down" to the foundation with metal straps so they don't go flying off to Oz with Dorothy. Once placed the gap between the bottom of the home and the top of the ground is covered with "skirting" such as metal, vinyl, treated wood, concrete blocks or a full stemwall. Note the this skirting (even the concrete) does not support the home.

Multi section units are eligible for conventional FHA, USDA, VA loans. Single wides are usually only eligible for FHA, VA or private money financing. Once set up the home can be moved again, however doing so disqualifies the home from FHA financing.

Mobile Home = Factory built housing constructed before June 15, 1976. Built on frame with axles and wheels as above. Eligible for VA or private money loans.

Modular home = Factory built housing without a steel frame underneath, designed and constructed to a state or national model code. The sections are transported from the factory on a large flat bed truck for installation on a permanent foundation at its final location. This is usually done with a large crane. The concrete perimeter foundation and a center strip support the home. Modular houses are treated like conventional construction homes by lenders, so long as they conform to the neighborhood.

Trailer = 5th wheel or narrow tenement designed for continuous transport.
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#14
Quote from RHCCapri View Post :
Manufactured Home = Factory built housing constructed on a steel frame to the National HUD code on or after June 15, 1976. Axles and wheels are attached to the frame for transport from the factory to the homesite. The axles, wheels and tow hitch are removed once the home is set up. The steel frame is set on concrete blocks or metal jackstands which rest on concrete footings or a full concrete slab. Government financing requires these homes to be "tied down" to the foundation with metal straps so they don't go flying off to Oz with Dorothy. Once placed the gap between the bottom of the home and the top of the ground is covered with "skirting" such as metal, vinyl, treated wood, concrete blocks or a full stemwall. Note the this skirting (even the concrete) does not support the home.

Multi section units are eligible for conventional FHA, USDA, VA loans. Single wides are usually only eligible for FHA, VA or private money financing. Once set up the home can be moved again, however doing so disqualifies the home from FHA financing.

Mobile Home = Factory built housing constructed before June 15, 1976. Built on frame with axles and wheels as above. Eligible for VA or private money loans.

Modular home = Factory built housing without a steel frame underneath, designed and constructed to a state or national model code. The sections are transported from the factory on a large flat bed truck for installation on a permanent foundation at its final location. This is usually done with a large crane. The concrete perimeter foundation and a center strip support the home. Modular houses are treated like conventional construction homes by lenders, so long as they conform to the neighborhood.

Trailer = 5th wheel or narrow tenement designed for continuous transport.

Finally, someone with a brain.

It is perfectly easy for someone with good credit to get a loan. They are not considered a "vehicle" like some idiot said before.

You can get a lot of square footage for little money, think 50K for 3000 feet. They are built to code and perfectly safe. However, they do not appreciate at all and they will need more general maitenance then a stick built house. Horrible investments.


I live in the south. These are as common as idiots on this forum. What you will find is lots of family members living in them (parents, kids, grandparents, etc..) because of the size.
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#15
Quote from eddiehaskell View Post :
I've been seeing some of these selling for 20-30k with land. Most of them are less than 12 yrs old and outside the city limit so low taxes. From my understanding, it's hard to finance them so only cash buyers.

I have thought about buying a few of them and renting for around $700/month with a $800 deposit. Another possibility would be doing owner financing. I could probably do a $55k purchase price with say $3500 down and finance the rest at say 7%.

Has anyone done this or decided not to?

You do not know the difference between a trailer a modular home or manufactured one. You should stick to investing in CD's.
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