| Why mobile home rentals? Get past the prejudice | | | | land might appreciate more slowly than the "regular" |
| and look at the numbers. In our town, for example, a | | | | house, but faster loan pay-down usually covers this |
| two bedroom house costs $130,000 and rents for | | | | factor. Pay less per month, have positive instead of |
| $800/month. A $50,000 mobile home on real estate | | | | negative cash flow, and build more equity! Don't |
| gets $500/month. Cash-on-cash return on investment | | | | expect your real estate agent to tell you this.Mobile |
| is obviously higher with mobile homes.Don't let the | | | | Homes - Cash FlowIn the example, you'd lose about |
| half-truth that mobiles depreciate in value keep you | | | | $150/month on the house, after the payment, taxes, |
| from investing in them. They lose value in a park, on | | | | insurance, repairs and other expenses. You'd have |
| a rented lot, but not on real estate. My first home | | | | cash flow with the mobile home, and after ten years |
| was a mobile, bought for $19,000 and sold for | | | | (when the loan is paid off), you'd have a lot of cash |
| $45,000 fourteen years later.House rentals here | | | | flow.Mobiles are cheap to maintain. The furnace died |
| usually have negative cash flow, while mobile home | | | | in rental I owned, and I replaced it for $1,200, much |
| rentals have some cash flow. Still, investors prefer | | | | less than a furnace for a larger home. For $200 you |
| houses, believing they'll build equity faster, but is that | | | | can have the roof tarred, instead of $5,000 to |
| true? Only during times of fast appreciation.Equity | | | | re-shingle a traditional roof. Windows, plumbing, doors |
| Building With Mobile Home RentalsBuy a house for | | | | - they're all cheaper. Property taxes and insurance |
| $120,00 with $20,000 down, and take out a | | | | are less too (be sure you can get insurance, since |
| $100,000, 6%, 30-year mortgage. You'll have a | | | | some old mobiles may be uninsurable).The Bottom |
| payment of $599.60. Of the first payment, $500 will | | | | Line$20,000 can buy two mobiles, with $10,000 down |
| go to interest, and $99.60 to principal. You only built | | | | on each, or four with $5,000 down on each, instead |
| equity of $99.60. This ignores appreciation, but only | | | | of one negative-cash-flow house. The two investors |
| for the moment.Second scenario: Find a mobile home | | | | in our town that own most of the mobile homes |
| for sale on land, and borrow $30,000, at 8%, | | | | always have cash flow, and have built millions in |
| amortised over 10 years. Higher interest and a | | | | equity. Others, following their prejudices, struggle to |
| shorter term is normal with mobiles, but being done | | | | make money with their "nice" rental homes. So when |
| with payments in 10 years instead of 30 sn't all bad. | | | | you're looking for a good investment, don't forget |
| The payment will be $363.99. The first month, $200 | | | | those mobile home rentals.Steve Gillman has invested |
| will go to interest, and $163.99 to principal. You built | | | | in real estate for years. |
| more equity in this scenario.Mobile home rentals on | | | | |