Is A Mobile Home A Real Estate Investment?

A mobile home is not a real estate investment. While purchasing a mobile home can be an inexpensive way to acquire housing, it’s not much different than renting a home. In the case of a mobile home, you have an opportunity to buy the structure you live in, but that structure depreciates over time similar to the way a car, truck or boat depreciates.

If you want to make an investment that may appreciate, you should consider buying a structure that includes the actual land it sits upon. A mobile home is essentially a trailer that can be parked on a leased space — typically a ‘trailer park’ or ‘mobile home park’. The positive part of this is that by parking your mobile home in a park, you instantly create an opportunity for a sense of community.

Bear in mind that if you choose to purchase a mobile home, you’ll likely have lower payments on the structure you live in (the mobile home / trailer), but you’ll have payments on the land lease or lot lease payable to the actual owner of the parcel of land that the community uses, unless you buy a parcel of land and then park your trailer / mobile home on the land that you own.

In most situations, the owner of the mobile home community land will have provided basic utilities, such as water, sewer, gas and electric, to each parking / rental space, and the tenant of the space will pay for the use of the utilities. If you buy your own land and choose to park your mobile home there instead of at a trailer park community, you’ll typically have to bear the cost of getting these utilities onto your land — which can sometimes cost thousands, if not tens of thousands of dollars.

The video below talks a little more about this. Bear in mind that I’m just trying to scratch the surface on this issue to inspire you to ask more questions and learn more about the difference between investing in real estate and spending money on other things, including mobile homes and trailers.

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