Why mobile home rentals? Get past the prejudice and look at the numbers. In our town, for example, a two bedroom house costs $130,000 and rents for $800/month. A $50,000 mobile home on real estate gets $500/month. Cash-on-cash return on investment is obviously higher with mobile homes.
Don’t let the half-truth that mobiles depreciate in value keep you from investing in them. They lose value in a park, on a rented lot, but not on real estate. My first home was a mobile, bought for $19,000 and sold for $45,000 fourteen years later.
House rentals here usually have negative cash flow, while mobile home rentals have some cash flow. Still, investors prefer houses, believing they’ll build equity faster, but is that true? Only during times of fast appreciation.
Equity Building With Mobile Home Rentals
Buy a house for $120,00 with $20,000 down, and take out a $100,000, 6%, 30-year mortgage. You’ll have a payment of $599.60. Of the first payment, $500 will go to interest, and $99.60 to principal. You only built equity of $99.60. This ignores appreciation, but only for the moment.
Second scenario: Find a mobile home for sale on land, and borrow $30,000, at 8%, amortised over 10 years. Higher interest and a shorter term is normal with mobiles, but being done with payments in 10 years instead of 30 sn’t all bad. The payment will be $363.99. The first month, $200 will go to interest, and $163.99 to principal. You built more equity in this scenario.
Mobile home rentals on land might appreciate more slowly than the “regular” house, but faster loan pay-down usually covers this factor. Pay less per month, have positive instead of negative cash flow, and build more equity! Don’t expect your real estate agent to tell you this.
Mobile Homes – Cash Flow
In the example, you’d lose about $150/month on the house, after the payment, taxes, insurance, repairs and other expenses. You’d have cash flow with the mobile home, and after ten years (when the loan is paid off), you’d have a lot of cash flow.
Mobiles are cheap to maintain. The furnace died in rental I owned, and I replaced it for $1,200, much less than a furnace for a larger home. For $200 you can have the roof tarred, instead of $5,000 to re-shingle a traditional roof. Windows, plumbing, doors – they’re all cheaper. Property taxes and insurance are less too (be sure you can get insurance, since some old mobiles may be uninsurable).
The Bottom Line
$20,000 can buy two mobiles, with $10,000 down on each, or four with $5,000 down on each, instead of one negative-cash-flow house. The two investors in our town that own most of the mobile homes always have cash flow, and have built millions in equity. Others, following their prejudices, struggle to make money with their “nice” rental homes. So when you’re looking for a good investment, don’t forget those mobile home rentals.
'The attention to detail and professionalism that Troy and his staff brings to our contract drafting process is unmatched. It’s a rare occurrence to find a law firm that cares as much about your legal protection as you do. But, Doucet Gerling is that law firm."
Mr. Doucet and his staff handled two foreclosures and a related matter for me. I found everyone in his office to be professional, effective and responsive. Everything he handled for me got me the results I expected. I highly recommend Doucet Gerling.
As an attorney and former client of Doucet Gerling, I was very impressed with the representation of Troy Doucet and his firm. I would recommend him to all who face difficulty in saving their home or getting cooperation with their mortgage companies.
If you need legal assistance regarding foreclosure, I urge you to consider putting your complete trust in Doucet Gerling. They will employ their vast knowledge and expertise on your behalf and work to attain a great outcome for your individual needs and situation.
"Troy Doucet is one of the most gifted attorneys that we have ever had the pleasure of dealing with. He treated us with kindness and generosity. We were most impressed with his integrity and high sense of duty to us. If you are looking for an attorney to get the job done we highly recommend Troy Doucet. Our family can never thank him enough for getting our foreclosure problem solved."
My company has worked with multiple law firms in the past, but none have come close to matching the quality we are seeing from Doucet & Associates. If you want an attorney who has a deep understanding of both the legal system AND business, hire them – you won’t be disappointed.
"Mr. Doucet worked wonders in my case. He stood up for me when I felt overwhelmed and helpless and kept my credit rating and future intact. Thanks you so much for helping me and my family."
"My family and I would like to send a thank you with sincere gratitude for all the time, hard work, and long hours set a side daily to represent and speak on our behalf during a very challenging time in our life. Our success is a reflect of your commitment. Thank you Troy Doucet & law firm."