Are you searching for investment opportunities? With plunging stock markets, investors are looking for other reliable options where they can enjoy substantial returns.
Honestly, considering the current fluctuating interest rates, investing in real estate could be a perfect choice.
It is not mandatory to spend millions on purchasing homes and apartments because the new concept of ‘mobile homes’ is opening doors for low-budget investors.
Unlike permanent homes, these are mobile homes built in a factory and placed on trailer chassis. Thus, you can put them on the land you own or any mobile park.
These homes are in high demand since it is the cheapest available shelter, bagging incredible rental returns. If you are skeptical about this new investment decision, we can help you out.
Here we are unpacking pros and cons of short-term mobile home rentals to understand whether it is worth investing.
Table of Contents
Pros of Mobile Home Rentals
It is always a great idea to discover new investment opportunities since the competition is equal to nothing in this field. Look below to see the pros of short-term mobile home rentals.
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Low Capital Expenses
Usually, real estate investors have to cough up money on home maintenance and repairs. By investing in a mobile home, you don’t have to worry about tenants making calls for renovations.
All the systems – HVAC, plumbing, electric circuits are accessible automatically. After all, mobile homes don’t have an issue of dripping ceilings or ripping paints.
Feel free to discover the option of short-term corporate housing as they also offer temporary accommodation but with permanent homes.
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Low-Cost Investment
People have to save a fortune to invest in real estate and get homeownership. Mobile homes are cheaper than stick-built houses, making it easier to invest.
Likewise, they also cost less per square foot, allowing you to get more space for your money.
A brand-new mobile home straight out of the factory won’t cost you more than $15000, while if you opt for a second-hand one, you can get it for as low as $10000. Hence, with some legwork, you can enjoy high rentals readily.
Cons of Mobile Home Rentals
It might seem like the perfect choice now, but before calling the shots – it is essential to familiarize yourself with how everything works. Look below to see where this investment option is falling apart.
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Value Depreciates
The most appealing thing about real estate is property appreciation.
The plot you repurchased ten years for $10,000 is now worth $15000 to $17000 – promising higher returns. Unfortunately, this is not the case with mobile homes as their value depreciates since they deplete with time.
It might sound like an advantage from a taxation perspective since the high depreciation results in low tax payable. Whereas, it is a drawback in terms of resale value, so bear this in mind when opting for mobile rentals.
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Built on Temporary Foundations
Homes are built permanently on the grounds, but mobile homes are placed on the grounds. Thus, thunderstorms and natural disasters leave them vulnerable to damage and destruction.
Even though you are putting them in mobile parks, it is impossible to protect them from catastrophe. If you have a huge garage, it will not be a problem since you can place them there without any hassle.
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Lot Rent
If you own a plot, you can keep the mobile homes there and enjoy rental returns. But what if you do not own a lot? You will have to place these homes in mobile parks that charge monthly rent for the parking space.
Unfortunately, the rental charges are not nuts, and peanuts – one-month park rent may cost as much as you earn home rental income in two months.
Likewise, you would be paying these rentals even if you do not have a tenant because charges are for placing the home.
Bringing It All Together,
The concept of mobile homes seems like the best investment option until you dig deeper into it. You learn about potential drawbacks and conditions associated with this particular investment.
For people who own land, this investment can do wonders, while others should explore other options such as corporate housing or personal housing.
