A Solid Investment – Think Realty

Mobile homes appreciate at rates on par with site-built homes.

Most people think mobile homes cannot be a solid investment because they are simply too easy to acquire. They depreciate, right? In fact, as someone who has fix and flipped more than 500 units, I have had other investors tell me that they dont deal with trailer trash. Remember the adage: It is the man with a little knowledge who feels he knows everything and the man with a lot of knowledge who realizes how little he actually knows.

Long has been the belief that mobile homes depreciate. For those who think there is an appreciation, they believe it is at a drastically slower rate than the site builds. They also believe they only appreciate if they are attached to land.

In researching the up-to-date data released from the Federal Housing Finance Agency and disseminated by the Urban Institute, this assumption is finally challenged and ultimately thrown out. In fact, the opposite is true, and this could mean major changes regarding the affordable housing crisis plaguing the nation. The index for home price on manufactured and mobile homes is growing at an average rate of 3.4 percent annually. What about site-built homes? They were growing at an annual rate of 3.8 percent. However, in the last few years, the prices of manufactured homes and mobile homes increased faster than that of traditional housing/properties.

One of the reasons these trends have been so misleading is that these houses arent as present in areas of the United States where the housing market recovery on a whole was more noticeable. These houses are more likely to be found in areas where recovery from the housing crisis was diminutive. California, for example, contains more than 17 percent of the entire U.S. housing market. Yet, in looking at the number of units shipped, only four percent of the manufactured housing market is represented in California.

Headline areas those featured for having had a noteworthy boom from the housing market crash simply arent areas that mobile homes have occupied. This unintentionally excludes their rise, leaving them out of the picture to those who take news at face value and make assumptions without digging deeper.

When comparing Texas, North Carolina, Louisiana, Florida, and Alabama to California, these states encompass 41 percent of the market for manufactured housing, but they have seen price appreciation increase at a slower rate than it has on average nationally. This is area-based. Not home-based. And that makes a big difference. We simply arent comparing apples to apples.

To learn more about Mobile Home Millions, visit mobilehomemillions.com.

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A Solid Investment - Think Realty