The demand for affordable and quality homes is growing, but manufactured home builders are stepping up to meet that need. According to a Fannie Mae report, 9% of single-family starter houses are made out of these mobile structures. Over 22 million people now live in manufactured homes.

Since we see this trend, the conversation we ought to have now is: Should you invest in manufactured homes? Let’s discuss.

What is a manufactured home?

A manufactured home is a factory-made structure built on wheels that can be transported to a preferred location. After construction, the homeowners attach the house either with an anchoring system like pier or foundation where there are no pre-existing structures for it to rest against. This ensures stability in all weather conditions!

For these homes to be called "manufactured", they must have at least 320 square feet of living space and comply fully with federal guidelines set forth by HUD's Building Code which regulates housing quality standards across America.

Before July 15, 1976 mobile homes were usually referred to as "mobile shacks." These substandard structures on wheels served as temporary living spaces for job seekers.

However after the new HUD building code was released in that year factory-constructed houses became viable options. Many new benefits included being structurally strong and aesthetically pleasing while also more efficient than their predecessors.

2 important considerations

The best way to find the perfect manufactured home for you is by deciding which type of land will be most convenient. You can either buy private property or lease space in a community that already has homes on it.

Why invest in a manufactured home?

The reputation and sales history of manufactured homes is not what most people would expect. The advantages to owning one can outweigh any potential drawbacks.

• Structure

The general misconception about manufactured homes is that they're not as strong, durable and reliable than site-built properties. However the truth of the matter is: although it's constructed in a factory with federal regulations through HUD codes for safety certification which pass rigorous testing before shipment.

• Affordability

One of the main reasons why manufactured homes have been a popular alternative to site-built properties is their low cost. The average price for square footage in this type of housing comes out about $49 compared with an average single family house which costs $107 dollars per foot. This affordable and more customizable option has allowed many Americans who make less than $30k annually an opportunity at homeownership.

• Customizable

You can change the exterior, install a marble countertop and even add more units whenever you like! Nowadays, builders offer as many options for aesthetics as they would for traditional homes.

Is it a good investment?

You’d look at the opportunity the same way you would any other form of real estate. What would be the cash flow? Should you flip the home? What’s the cash on cash return? Can you use OPM? What type of screening process would you have if you were rent it out? What are the association rules?

Basically, treat this asset class as any other asset class when you’re looking in terms of return. So as long as the numbers work for you investment strategy, then yes, this asset class is something to look into. Just know you are working with a lower priced asset class. Therefore, the cash returns tend to be lower than those of commercial assets.

For more information, schedule your free consultation with our experts today!