Investors looking for a safe space to park their capital in these uncertain pandemic times can look to manufactured home financing instruments. GlobeSt.com reports that JLL Capital Markets has closed manufactured housing deals worth $118 million in the past seven months in Southern California alone. Another $46.4 million was made in Phoenix during the same period.
Furthermore, industry analysts believe this is a trend destined to stick. Zach Koucos is the managing director of JLL Capital. He said he does not expect to see a market interest decrease through 2021. He cites three factors to bolster his prediction: limited supply, substantial rent collections, and low vacancies.
The $118 million in manufactured home financing in Southern California represents 1,038 home sites. The $46.4 million in Phoenix is a 17-property manufactured housing portfolio comprising 1,050 individual homes.
More people are opting for manufactured homes for a variety of reasons. The primary one is the cost. The price for single-family housing has been on a steady rise. Manufactured homes are an attractive alternative because they provide the pride of homeownership in a community setting. It’s like owning a “real” or traditional home for far less money.
Consider that an average single-family home is $272,000 in the U.S. A manufactured home goes for an average of $62,600. That makes them an excellent option for first-time homebuyers with limited budgets. Additionally, manufactured homes get high marks for quality. They will hold or increase their value even during dicey economic times, experts say.
A manufactured home provides the owner with space of their own, not an attached situation or being ensconced in an apartment complex or part of a condominium. In short, manufactured homes provide low-density housing when the focus for the past several years has been on high-density developments.
Koucos described the risk element of investing in manufactured home financing instruments as “attractive” in light of the challenges that have emerged in the commercial real estate sector during the pandemic.
Fifteen-year and 30-year mortgages are the most typical deal for purchasing a home in the U.S. today. Twenty years is the maximum allowed for manufactured homes. Even with a 20-year mortgage, buyers will enjoy lower payments over that period when compared to a 30-year on a single-family home.