When it comes to investing in mobile homes, there are a lot of myths. Many who talk about the negative side of the business have either not been in it long enough to make it work or have never done a mobile home deal themselves. As a real estate investor and author with over a decade of experience, I’m going to debunk some of the most common mobile home investing myths.
Myth #1: Mobile homes depreciate over time and you can’t sell them for a profit.
While mobile homes (as personal property) may depreciate over time on paper (usually per your county assessor’s office), you can sell them and make a profit. Contrary to what other real estate investors have said, there are profits to be made with mobile homes. The key is to learn your market, fill a demand (affordable housing), and find the right types of buyers or renters for the mobile homes in your inventory.
Myth #2: Mobile homes are made with low-grade materials and there’s too much fix-up work involved to make money investing in them.
Though mobile homes are made with lower-grade materials in some areas (as opposed to single-family homes), the life of them highly depend on their use and the way people take care of them. This holds true for those living in single-family homes as well.
If you have the wrong types of people living in the homes you sell or rent (aka ones who don’t take care of things), then yes it will be costly to fix these items. Though if you have people living in your homes who actually take care of things, these items will last much longer.
Personally, I’ve seen 30-year-old mobile homes in great condition due to the people who take care of them. Whether you’re a real estate investor or homeowner, always remember that nothing lasts forever. There will be items needing repair over time whether it be a mobile home, a single-family home, or an apartment building. So plan accordingly.
Myth #3: Mobile homes attract low-end tenants and buyers who will damage your homes over time.
Let’s face it: When people hear the word “mobile home,” they usually remember a scene like the movie 8 Mile in their head. It’s natural. And it’s OK.
Though, it’s a myth. Just like single-family homes, there are different types of neighborhoods when it comes to mobile homes. They are no different. Each neighborhood attracts a different type of clientele whether it be low-end, middle-of-the-road, or high-end mobile home communities.
So you must remember to be very careful with the neighborhoods you choose to work in (whether it be mobile homes, single-family homes, or apartment buildings) and the types of people you put in them. It’s a myth to say mobile homes in general attract the wrong kinds of people who will damage your homes over time. Only you can control the outcome by choosing the areas you do business in and the types of people you put in them.
Myth #4: Mobile homes are impossible to buy because park managers and owners won’t allow you to work in their communities.
This is one of the most common myths when it comes to investing in mobile homes. Personally, I had a hard time (as explained in my book) working with park managers and owners in the beginning. Though I kept going. And eventually found success working with park managers and owners who were open to working with me. The key is to be persistent. Don’t give up. If Then, you’ll eventually find success as I did.
Myth #5: Mobile homes are not where you make money. The money lies in owning the mobile home park and renting the dirt (aka lot rent).
Probably one of the biggest myths ever is when other real estate investors say the key to making money is owning the mobile home park and renting the dirt (aka lot rent), not the individual mobile homes themselves. This couldn’t be any farther from the truth.
Last time I checked, most of the park owners I know still have a J-O-B. They still have to work and cannot entirely live off of the income (if any after expenses) from their parks. Where I’ve heard mobile home parks pay off is when those who own it sell it (above value due to a seller’s market) making a profit. And yes, it’s pretty ironic that those who encourage others to buy mobile home parks may be selling them and/or teaching others to buy them as well. It kind of reminds me of this scene from the movie The Wolf of Wall Street:
On the other hand, I’ve met others (including Lonnie Scruggs himself and my other mentors), who have been able to live off of the income they’ve made from investing in mobile homes. Many have gone on to do other things and invest in bigger projects. But after all the work and money put into them, the one thing they kept telling me was that the biggest returns they’ve had was in mobile home investing.
So you see? There are many myths people say and spread out there when it comes to investing in mobile homes. Don’t believe them. And don’t let it stop you from achieving your dreams and creating a better life for you and your family.
Personally, I’ve known many others who have made a good living off of investing in mobile homes. Through hard work, dedication, and persistence – it can be done. Hopefully, you can become one of them in the future.
(Disclosure: Some posts may contain affiliate links.)