I greatly appreciate the thoughts.
The funny thing about the vehicles is that all my vehicles appreciate.. haha. So I have a hard time with that analogy. (I follow the car ownership principles of
https://www.amazon.com/Car-Ins-Outs-Buying-Selling/dp/1495257029 ) so if I extrapolate that analogy a bit further, while they depreciate for many people, in theory if they are played right, they may not depreciate...
The second piece is, does depreciation matter that much if they pay themselves off in less than 2 years? I get that the asset value is reduced greatly. hence the term "depreciation", but paying (numbers used for simplicity) $100,000 for $1,000,000 in income over ten years with a residual resale of $25,000 is an annualized return of 26.2%.
A few things to consider, as I've owned a MF home in the past.
1. The lot it sits on...do you rent it or own it? Leased lots....you're at the mercy of the land owner.
2. They ( the house itself ) will not appreciate. It will depreciate and 99% of people will always recognize it as MF house. That is unless you do major changes of the appearance.
3. The house I owned, believe it or not, I had less issues with it than I did with my custom built personal house. MF's are built to a rigorous standard, in climate controlled factories, using jigs, and designed to be driven down the road a few 100-1000 miles.
I anticipate avoiding leased lots and stick to purchased lots, so I get that concern. I don't know if its a regional thing, but around here MF homes on purchased lots are commonplace in small towns. Very interesting to hear about your personal experience. that actually makes it less concerning to me!
I disagree that mobile homes depreciate at the same rate of a vehicle. We have several, and I assume a lifespan significantly less than a stick-built house, but at least 30 years, if the same maintenance is performed as a SFR. I have found that tenants who will rent a mobile homes tend to stay much longer and live simpler lives than those in SFRs; generally older gentleman or couples who do not entertain much (less wear and tear on appliances and carpet). So far it has been very lucrative for us (we've only owned the property about 5 years, but the units are an average of 20 years old, and the tenants have been there about as long- very low turnover).
This is very helpful information! Thank you! It sounds like you'd recommend it.
One thing to think about is having things fixed in a mobile home. In my part of the country, many electricians and plumbers refuse to work on mobile homes. Many had their pipes freeze this winter as all the runs are below the until and not insulated well enough.
That is interesting. I was thinking about hiring my own full-time handyman to maintain my properties. This actually makes that suggestion much more compelling. I never knew that, so I'll have to check with a few up front, as I never thought they'd reject a job!
