In the paragraphs that follow, a brief explanation on how to invest in mobile homes has been provided. To know more about the investment options for mobile homes, read on.
Often, investing in mobile homes proves to be a better idea than investing in permanent homes. Mobile homes, which were quite similar to ‘trailers’ are basically a great investment opportunity in the post recession era. A mobile home is basically a prefabricated home, or rather a home, which is built or assembled in the factory and is then towed to the location where it is to be used. The towing is usually done by trucks or open top trailers. The subprime mortgage crisis which has left a significant portion of the economy of the United States in shambles, has led people to opt for the unlikely option of mobile homes. Anyway, as an investor, you, can always count on mobile homes as an excellent business opportunity.
1. How does the System Work?
The mobile home which is prefabricated in factories is considerably light in weight and can be towed to certain locations where it is set up as a permanent or temporary dwelling. The land underneath usually does not belong to the home owner but is leased or rather rented for use. In some cases however the land can also be owned by the owner or lessee of the mobile home. A mobile home park or a barren piece of land are usually used for the purpose.
One of the best ways to invest in a mobile home is in fact living in one. A mobile home is considerably cheap, with a second-hand one costing about $2,000 to $5,000 and a completely new one costing anything between, $8500 to $12,000 and larger ones ranging from $15,000 to $20,000. The land rent amounts to anything between, $150 to $500, depending upon the location of the mobile home park. Now, living in one is a great investment as it saves money, but there are a lot more ways to invest.
2. Mobile Home Park
This is the most comprehensive set up that you can provide. Buy a barren piece of land, develop it a little bit on your own. Then you can easily get a water and electricity connection and build a sewer system on your own. This way your trailer/mobile home park is ready. You can of course advertise about the park and keep on developing it further more, by planting lush green trees, providing free Internet facilities, etc. Mobile home owners would be able to use allocated spaces along with electricity and water connections. The pros of such a system is that you can easily finance it with the help of loan such as a mobile home loan and a relatively low down payment. You can obtain a mortgage or secured loan to buy and develop the land.
3. Renting out Mobile Homes
Another great way is to have a tie up with a person who already owns some land or has a completely developed trailer/mobile home park. You can simply buy mobile homes and rent them out either directly to the park owner or to the people who want such a home.
4. Partnership and Enterprise
Partnering with a person in order to open up either a trailer/mobile home park or own mobile homes, is another great option. In fact with more people in the action, the loan amount that you would get, would be much bigger. A bigger loan amount means more mobile homes. In fact, in such a situation you can try to get as many mobile homes as possible, or you can even rent them or take them on lease. Now, in such a scenario, it’s better to get old mobile homes and then refurbish them, it costs less on the whole. The last option that you can use is being a dormant or sleeping partner, that is just pool in the money and enjoy the returns.
In this kind of business you will have a substantially large rate of return and it will go well over 20 to 30%. If you own, both the mobile homes and the park, then you can have an income of about $500 per home per month. If you own only the park then it will be about $150 – 250 per home per month and if you own only the mobile home then again you will have an income of about $150 – 250 per home per month. Make it a point to research your market really well and also the needs of people. It often happens that people may demand smaller mobile homes as they are living away from their families or are single. Here you can push in more homes in smaller spaces and earn a greater revenue.