Mobile homes have come a long way since your grandparents’ time. The trailer homes of the 1950s have given way to today’s mobile homes—and sometimes, you can hardly tell the difference between a modern mobile home and a traditional home without a good, hard look.

Mobile homes can be a terrible investment since their value drops quickly. It’s similar to purchasing a new car, which loses value the moment you drive it off the lot.

First, let’s define three key terms: mobile homes, manufactured homes and modular homes. While these types of homes all exist in the same family of construction methods, there are some important differences between them.

Mobile homes are the grandpa of the family. When most people hear the term mobile home, they usually think of those classic, self-contained, shoebox-shaped houses typically seen in trailer parks—made popular in the mid-20th century alongside Elvis and I Love Lucy. Depending on how they’re built, mobile homes can be transported either with a tow hitch and a truck (like a camping trailer) or on the back of a flatbed.

A manufactured home is basically a mobile home with a master’s degree. In 1974, mobile home standards changed a lot when the federal government passed the National Mobile Home Construction and Safety Act. Then, two years later, the Department of Housing and Urban Development (HUD) rolled out the Manufactured Home Construction and Safety Standards.

From that point on, all mobile homes had to be built to meet universal standards and, just like Prince, they got a name change: manufactured homes.But even with all the fancy, sophisticated additions and certificates, the manufactured home is still constructed on a moveable foundation.

If a mobile home made after 1976 is built to HUD’s standards (meaning all of them) and could potentially be moved, HUD now lumps it into the manufactured home label.

Today’s manufactured homes come in three sizes: single-, double- and triple-wide. Just like the name sounds, you can build your manufactured home to double or triple the standard size (a single is usually 500 to 1,200 square feet), depending on how much room you want.

The pieces of a modular house are built off-site in a factory, like its relatives, but then the pieces are attached to a permanent foundation at the homesite and built to local building codes, just like traditional homes. That’s why they’re often referred to as prefabricated. When the assembly is all done and it’s ready to be moved into, you can barely tell the difference between it and a conventionally built home.

No matter what name they’re under, all mobile homes eventually lose value to some degree. It might not be fair, but perception is a big factor in the mobile home market.

If the average person sees your mobile home and thinks it came in on a truck, your home won’t go up in value.

How Much Do Mobile Homes Cost? 

According to the U.S. Census Bureau, the average price of a new mobile home was nearly $129,900 in May 2023. Of course, the price varies with the size and look of the home:

Type	Avg. Cost	Avg. Living Space	Bedrooms	Bathrooms
Single-Wide	$86,3004	500–1,200 sq. ft.	1–2	1–2
Double-Wide	$160,2005	1,100–2,400 sq. ft.	2–3	2

If you’re looking for the stats on triple-wide homes, the Census Bureau doesn’t call out the numbers for them—they were just lumped in with the total amount.

Buyers should know that costs and size regulations vary by state because these homes have to be transported—just like that Chipotle barbacoa burrito you ordered from DoorDash when you could (and should) have picked it up yourself for free.

The price will also depend on personal customizations, like snazzy granite countertops, and add-ons, like a large front porch. There are also other costs on top of the home price to consider—like insurance, which will also vary depending on where your mobile home sits.

If you buy a mobile home, you’ll also need to either buy or rent land for it to sit on. It’s difficult to determine the average cost of renting a mobile home plot since those numbers aren’t reported in the same way as traditional real estate, so just know that the price will always reflect the local state and city real estate market. For example, if you live in a high-price state like California, you could be looking at something significantly above average than if you lived in, say, Indiana.

The lot price also depends on your access to amenities, including things like electricity, trash pickup or even an on-site pool.

The typical life expectancy of a mobile homes built today is around 30–55 years. 

Of course, just like a car, mobile homes can last longer if they’re well maintained. If you keep up general maintenance, choose your plot location wisely, and have it inspected every so often, you could outlast that 55-year mark.

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Natural disasters can also cut down on a mobile home’s lifespan. Like standard homes, mobile homes are made out of wood and metal. But unlike standard homes, most aren’t built on a permanent foundation with framing built to last. So, people who live in mobile homes are vulnerable to natural disasters like hurricanes, tornadoes, flooding and fires.

And I hate to be the bearer of bad news, but you’re 15 to 20 times more likely to be killed during a tornado in a mobile home than a traditional one, according to the National Weather Service.

Needless to say, a mobile home isn’t something you’re going to pass down through your family for generations.

If you’re smart, you won’t look at a mobile home as an investment because they lose value over time. From a financial standpoint, buying a mobile home is like buying a very large (and expensive) car that you sleep in. And unless you’re planning to hop on the #VanLife trend (hey, you do you), that’s not a great idea.

Some like to argue that buying a mobile home is better than paying rent on an apartment or home. There’s a problem with that logic, though. When you pay, say, $1,200 a month in rent, that’s all you’re losing. But when you buy a mobile home, you’re still losing money every day because it can depreciate so quickly.

How quickly do mobile homes depreciate? History says a $150,000 double-wide mobile home will depreciate by more than $50,000 in just five years (a third of the original value!). That’s not an investment, folks—that’s a money pit. And you didn’t need me to tell you that a money pit shouldn’t have a place in your investment strategy.

Now, you may run into some people who try to convince you that mobile homes go up in value, and they’ll even have stats to back it up. But those stats are misleading. Why? Most of them, like those reported by the Federal Housing Finance Agency, are based on the value of manufactured homes titled as real property, which means they’re permanently attached to the land. In those cases, the value of the land is going up, not the value of the manufactured home.

The Pros And Cons Of Mobile Home Park Investing

Pros

1. Withstands many economic environments: Manufactured housing is among the most affordable housing options available in the U.S. In my experience, during periods of economic downturn, the demand for affordable housing can create a flood of inquiries for mobile home park owners. Moreover, we’ve found that existing tenants often prefer to stay in place rather than pay the costs of relocation. These factors combine to give mobile home parks the potential to be a steady commercial real estate investment.

2. Shrinking supply and growing demand: Many residents of mobile home parks are being forced to leave due to older mobile home parks being razed. At the same time, the affordable housing crisis continues across the country. As a result, many homeowners are looking for more affordable housing options.

3. Opportunity for consistent cash flows: From experience, the stable tenant base and low maintenance costs often associated with a mobile home park have the potential to provide investors with a consistent cash flow.

4. Multiple income streams: Investors can also boost profitability by providing revenue-generating amenities beyond lot rents, such as on-site laundry, storage units, vending machines or RV and boat parking areas. These multiple income streams could help mitigate risk and increase financial stability and possible returns.

5. Lower maintenance costs: When acquiring a mobile home community with tenant-owned homes, you purchase a parcel of land and its infrastructure. If managed correctly, this can make mobile home parks an attractive choice for those seeking a lower maintenance and cost-effective investment.

6. Tax benefits: Mobile home parks are capable of providing certain tax advantages to investors, such as depreciating infrastructure and improvements.

7. Consistent tenant base: Mobile home parks also tend to have a stable tenant base. We found this is often for two reasons: First, some homeowners downsize as they age, but manufactured homeowners are already at the lower end of the downsizing spectrum; second, the cost of relocating a mobile home can be quite high, with the average cost being about $9,000 in 2023, according to Forbes. So, I’ve observed that tenants tend to choose to remain in a well-maintained mobile home park, even in the face of modest rent increases.

8. Shared responsibility: In tenant-owned home mobile home parks, owners are responsible for the land and infrastructure, while tenants are theoretically responsible for their homes. Since the tenants are homeowners, they should be vested in caring for and maintaining their manufactured homes. This creates a potential joint stakeholder scenario that is not typically found when renting other real estate types.

9. Flexible financing options: When it comes to financing mobile home parks, the benefits are twofold. Park owners might be receptive to owner financing arrangements due to the potential benefits and steady monthly income it can provide. At the same time, as more prominent players enter the industry, I’m seeing that financing from large banks is becoming increasingly accessible.

10. Lower competition: We found there simply isn’t as much competition in the mobile home space as other types of real estate investments. However, competition is bound to increase as larger companies catch on.

Cons

Of course, it’s also important to consider some of the risks that can come with a new real estate investment. I think the biggest risks associated with mobile home parks include:

• Buying in a market that loses a sole large employer.

• Dealing with older utility infrastructures (many mobile home parks are more than 50 years old).

• Hiring a property management company that can’t handle the increased volume of low-income tenants.

These risks can be mostly managed with thorough due diligence ahead of your purchase. This is where experience and a proven track record can save you big time.

You should also ask yourself some additional questions when considering a mobile home park investment, including:

• Do I want to invest actively (buy your own park) or passively (with an experienced operator)?

• Am I comfortable buying a property far away from where I live, or do I want something within driving distance?

• Do I have the time to commit to the due diligence and managing a mobile home park would require? (I believe the best operators are very hands-on.)

• Do I have the stomach to evict low-income tenants if it comes to it?

• Can my portfolio handle investing in an illiquid asset for an extended period of time?

We believe mobile home parks have the potential to be a smart investment opportunity, and they don’t receive the credit they deserve. If you’re an investor on the fence about mobile home parks, it could be wise to do your research and consider whether getting involved is the right choice for you.

How to Buy Mobile Homes

Purchasing a home entails multiple processes, beginning with preliminary research and ending with the actual transaction. Here are the steps to give you a clear idea of what to expect:

Step 1: Determine Your Budget

The first step in buying a mobile home is determining your budget. This includes not only the purchase price of the home itself but also additional costs like land (if needed), setup costs, and ongoing expenses such as insurance and maintenance.

Step 2: Choose Between New and Used

Next, you must decide whether to buy a new or used mobile home. New homes will be more expensive but have warranties and the latest features. Used homes will be cheaper but may require more maintenance.

Step 3: Select the Right Size and Layout

Consider how much space you need and what layout will best suit your needs. Mobile homes come in various sizes and floor plans, including single-wide, double-wide, and even triple-wide models.

Step 4: Research Manufacturers and Dealers

Once you know what you’re looking for, it’s time to research manufacturers and dealers. Look for ones that have good reputations for quality and customer service.

Step 5: Visit Dealerships and Take Tours

When you’ve narrowed down your options, visit dealerships to tour the homes. This will give you a better idea of the home’s size, layout, and quality of construction.

Step 6: Secure Financing

If you’re not paying in cash, you’ll need to secure financing. This can be more challenging for mobile homes than traditional houses, so starting this process early is important. To secure financing, you’ll need a variety of documents that you can keep in Trustworthy’s secure storage.

Step 7: Finalize the Purchase

Once you’ve chosen a home and secured financing, it’s time to finalize the purchase. This involves signing a sales agreement, arranging for the home to be delivered and set up (if it’s new), and completing any necessary documents.

When it comes to investing in mobile homes as rental properties, there are two primary options: purchasing a mobile home on your own land and buying a unit located within an established park community.  Let’s talk about both of them.

Mobile Home on Personal Land

Investing in your own land offers significant benefits, including greater control over the property and stability against rent increases – which are common in park communities –as well as freedom from the regulations of a designated residential area.  

However, it is important to consider that managing your own land brings additional responsibilities, such as maintaining and setting up the property for use.

Mobile Home in a Park

For those who want to avoid the costs and responsibilities associated with purchasing a plot of land, investing in mobile homes located on park grounds is an attractive option.  

One upside to this choice is that you’ll have access to existing infrastructure, such as power lines and supply networks already within the place at the park. You also won’t need to worry about managing any potential maintenance issues yourself. 

However, it is important to note that by investing in a park home, you and your tenants will be subject to rules laid out by the property owners, which may curb individual freedoms.

Final Words

If you’ve weighed the pros and cons and believe mobile homes are a promising addition to your portfolio, it’s time to start the process. First, hire a real estate agent you trust. This is the best way to get access to MLS listings, plus, you may hear about properties before they hit the market. A professional can help you find something that will enhance your portfolio.

When it comes time for financing, a local bank may be more likely to fund your mortgage if they are familiar with the area. A large national bank is unlikely to participate unless the loan for your mobile home park is at least $1M. If you’re purchasing a mobile home park that is already up and running, consider seller financing to save on commission costs and other fees.