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Get Rich With Mobile Homes
Does the myth that mobile homes depreciate in value keep you from investing in them? Well, they do lose value in a park, on a rented lot. Mobile homes with real estate, however, are an entirely different investment. My mobile home doubled in value in the twelve years I lived in it. The home deteriorated a little (don't all houses?), but the value of the land continued to rise. Also, by renting rooms, I took in far more money from my home than it originally cost, and I was living in it! Forget your prejudices and look at the numbers. In this town, for example, a two bedroom house rents for $800/month, and costs about $120,000. A mobile home gets $500/month, but you can buy one on real estate for $50,000 or less. The cash-on-cash return on investment is obviously higher with mobile homes. What about the long term return from appreciation? House rentals here typically have negative cash flow, while mobile home rentals at least break even. Investors prefer houses anyhow, believing they'll build equity faster, but is that true? Faster Equity With Mobile Homes Buy a house for $120,00. Put $20,000 down, and you'll have a $100,000 mortgage loan. Amortised over 30 years at 6% interest, you'll have a payment of $599.60. Of the first payment, $500 will go towards interest, $99.60 towards principal. In other words, you only built equity of $99.60. I'm ignoring appreciation, but only for the moment. Second scenario: Find a nice mobile home for sale, and borrow only $30,000, at 8% interest, amortised over 10 years. Note the higher interest - this is always the case with "factory built home mortgages." The shorter term is normal too, so you'll be done with payments in 10 years instead of 30. Now, despite higher interest and a shorter term, the payment will be only $363.99. The first month, $200 will go towards interest. That means the other $163.99 goes towards principal. You bought more house (built more equity) in this scenario. A mobile home on land might appreciate more slowly than the "regular" house, but faster loan pay-down covers this factor. Pay less per month and build more equity! Don't expect your real estate agent to tell you this. Don't expect him to even agree with me after you explain it. I sold real estate years ago, and math skills were not part of the licensing requirements. Cash Flow With Mobile Homes In the example given, you'd initially lose about $150/month on the house, after your payment, taxes, insurance repairs and other expenses. You'd break even or better with the mobile home, and after the loan is paid (ten years), you'd have a lot of cash flow, of course. Mobile homes are cheap to maintain. The furnace died in rental I owned, the most expensive repair you'll have in a mobile. I replaced it for $1,200, much less than a furnace for a larger home. For $200 you can have a mobile home roof tarred, instead of $5,000 to re-shingle a traditional roof. Windows, plumbing, doors - they're all cheaper. Property taxes cost less, because they're based on value, and mobile homes have a lower value than stick-built houses. Insurance will cost less too, because you are insuring less value. The only precaution to remember here is to be sure you can get insurance. Very old mobiles may be uninsurable in some areas. The Bottom Line Mobiles have their own problems. Renters who have to rent for less sometimes pay late, for example. These issues are minor compared to the advantages. Your twenty thousand could buy you two mobile home rentals, with ten thousand down on each, instead of one negative-cash-flow house, for example. Take an honest look at the numbers. The two investors in my town that own most of the mobile home rentals always have cash flow, and have millions in equity now. Other investors, following their prejudices, struggle to make money with their "nice" rental homes. So don't automatically pass on those mobile homes for sale when you're looking for a good investment. Steve Gillman has invested in mobile homes and other real estate for years. To learn more, and to see a photo of a beautiful house (not a mobile) he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
MORE RESOURCES: Posthaste: Cottage real estate rush slows to a 'standstill' as remote-living honeymoon ends Yahoo Canada Finance Signature Bank's New York Real-Estate Problem National Review South side hotel headed for start near downtown Fort Worth The Dallas Morning News 8 Best Places to Live in Texas, According to Real Estate Experts Travel + Leisure $6.29M estate hits market as most expensive home listing in Concord - Charlotte Business Journal The Business Journals Michael Saunders makes top 500 real estate ranking Your Observer Here Are NYC's Biggest Real Estate Loans in February The Real Deal Next Dor: From Fashion to Real Estate | Detroit Jewish News The Jewish News Crescent Real Estate exec heads to West Dallas investor The Dallas Morning News The Top Real Estate Companies in Georgia Real Estate GFP Real Estate Signs Eight New Leases Totaling 13291 SF at 209 ... Real Estate Weekly How do real estate agents get paid? Stephanie Jones tells us what we need to know when buying a home WLUC Real Estate Transfers (Week of March 27) Times Bulletin SVN | J. Beard Real Estate Arranges Sale of Retail Portfolio in ... REBusinessOnline Plan B Investments Buys 70 Property Portfolio from Trei Real Estate Sovereign Wealth Fund Institute Foreigners Check Out Greek Real Estate Online GreekCityTimes.com New York Real Estate Journal's 2023 Women in Construction ... New York Real Estate Journal Online Commercial real estate firm, agents and staff recognized by parent ... Greater Wilmington Business Journal Real estate market hits seasonal slowdown in Capital Region The Saratogian Market Turmoil Slows Momentum for Real Estate Interval Funds Wealth Management Private equity real estate firm acquires St. Mary’s County shopping ... Maryland Daily Record Real Estate: March 13 – March 17 Newport This Week Wilton Real Estate Report (March 17-23, 2023): Five Properties ... Good Morning Wilton Forren retiring from West Virginia Real Estate Commission post Parkersburg News Acento Real Estate Partners Buys DC-Area Apartments Multi-Housing News Real estate, utilities ETFs see outflows; crypto products lure inflows ... Pensions & Investments Erica Grossman Leading Douglas Elliman In Hamptons Real Estate James Lane Post Real estate plans from candidates Brandon Johnson, Paul Vallas Crain's Chicago Business Real Estate Experts Rank TOP 8 Texas Cities To Live In 2023 Traveling Lifestyle Breaking Down Real Estate's Banking Crisis Nightmare The Real Deal Is Real Estate the Next Shoe to Drop? Investing.com Public Records: Muskingum County Real Estate Transfers Zanesville Times Recorder Real estate developer Robert Rosenberg, who died Friday, had ... Greater Wilmington Business Journal Sheppard Mullin Lands Five-Attorney Real Estate Team Business Wire Prairie Land REALTORS® partners with MLS Grid to manage real estate data feeds, standardize vendor licensing Yahoo Finance Tedisco Helps Open New Mechanicville Real Estate Firm The New York State Senate In Duluth, Real Estate Collides With Climate The New York Times State of Federal Real Estate | Transportation and Infrastructure ... The House Committee on Transportation and Infrastructure Link Real Estate Investment Trust : REIT's Rights Issue is 240% Subscribed Marketscreener.com Delray dream run real estate professional Pecotic set to achieve dream by combining work with tennis, sets goal of playing 25 tournaments this year TennisUpToDate.com Jason Hughes, Real Estate Adviser in 101 Ash Deal, Pleads Guilty ... Times of San Diego Former Tampa Area Real Estate Professional Sentenced To 24 ... Department of Justice Estate Mogul Tied to SF Scandal Buys $15M home The Real Deal School of Business Launches Online Real Estate Development ... Montclaire News |
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