Mobile Home Rentals – A Great Investment

Why mobile home rentals? Get past the prejudice and look at the numbers. According to a a two bedroom house in Charlotte (one of our primary markets) costs $120,000 and rents for $750/month. A $40,000 mobile home on real estate gets $600/month. Cash-on-cash return on investment is obviously higher with mobile homes.

We Buy Mobile Homes

Don’t let the half-truth that mobiles depreciate in value keep you from investing in them. They lose value in a park, on a rented lot, but not on real estate. We bought our first mobile investment property for $13,000 (and put $3,000 into it for appliances and carpet) and sold for $41,000 6 years later.

House rentals in Charlotte usually typically generate $150-$250 a month in cash-flow, while mobile home rentals have cash of $350-$450. Still, investors prefer houses, believing they’ll build equity faster, but is that true? Only during times of fast appreciation.

Equity Building With Mobile Home Rentals

Buy a house for $120,00 with $20,000 down, and take out a $100,000, 5%, 30-year mortgage. You’ll have a payment of $536.82. Of the first payment, $416.67 will go to interest, and $120.15 to principal. You only built equity of $120.15. This ignores appreciation, but only for the moment.

Second scenario: Find a mobile home for sale on land, and borrow $20,000, at 7%, amortized over 10 years. Higher interest and a shorter term is normal with mobiles, but being done with payments in 10 years instead of 30 isn’t all bad. The payment will be $232.22. The first month, $116.67 will go to interest, and $115.55 to principal. Less went toward the principal but you built more equity in this scenario.

Mobile home rentals on land might appreciate more slowly than the “regular” house, but faster loan pay-down usually covers this factor. Pay less per month, have a higher cash flow per month and build more equity! Don’t expect your real estate agent to tell you this.

Mobile Homes – Cash Flow

In the example, you’d break even on the house, after the payment, taxes, insurance, repairs and other expenses. You’d have cash flow with the mobile home, and after ten years (when the loan is paid off), you’d have a lot of cash flow.

Mobiles are cheap to maintain. The furnace died in rental we owned, and I replaced it for $700, much less than a furnace for a larger home. For $200 you can have the roof tarred, instead of $3,500 to re-shingle a traditional roof. Windows, plumbing, doors – they’re all cheaper. Property taxes and insurance are less too (be sure you can get insurance, since some old mobiles may be uninsurable).

The Bottom Line

We buy Houses and Mobile Homes because $20,000 can buy two mobiles, with $10,000 down on each, or four with $5,000 down on each, instead of one negative-cash-flow house. The two investors in Charlotte that own most of the mobile homes always have cash flow, and have built millions (plural) in equity. Others, following their prejudices, struggle to make money with their “nice” rental homes. So when you’re looking for a good investment, don’t forget those mobile home rentals.

Thank you for reading and for more real estate investment tips and knowledge check out our blog at and if you’re interested in passively investing in real estate and having that investment secured by real estate reach out to us my clicking here or text/call 888-277-2711.

Get More Real Estate Market Info... Subscribe Below!

Learn more about us and find other resources on buying investment properties with us. Like us, follow us, connect!

Leave a Reply

Your email address will not be published. Required fields are marked *