As a woman I pride myself on being able to do many things. As a mom I pride myself on doing even more. However, in business, you could say the direct opposite is true. As a business woman I pride myself on what I do not do.
I do not fix the refrigerator. Or the stove, the plumbing and definitely not the dishwasher for that matter. Why would you do this as a business woman, you may ask. Well, when you are in real estate and your business is investment properties, those tasks become all too much of reality when you approach these investments as a landlord.
Keep in mind, there are ways around everything. I cannot stand washing dishes. How do I get around doing the dishes when my kids eat me out of house and home? I simply don’t use dishes. I buy paper plates for everyday use. And when dishes do get dirty, I have a child assigned to weekly dish duty. The same can apply to investment real estate. Don’t want to be on the hook to fix pipes and handle maintenance issues at a moment’s notice? Simply do not rent.
Do not become a landlord.
It makes for good logic to sell off a mobile home once you have spent a little money fixing it up and making it more attractive to potential buyers. Once you find the right interested party, figure out a price that tenant can pay and make it into the payment the tenant makes toward their overall note and home ownership. The right buyer will absolutely appreciate this and you will not be responsible for maintenance issues when the air conditioner goes out or the kitchen sink leaks. It is smart business and the buyer’s assumption of risk is a necessary evil they accept, part of the give and take of becoming a homeowner. I’m betting that 9 out of 10 buyers would take the cost of a repair over answering to a landlord anyday.
Here are the most costly repairs you could find yourself paying for if you are acting as a landlord instead of a note-holder.
- Plumbing issues. Many older mobile homes were fitted with a cost-saving “pipe of the future” that was intended to save money and replace the need for copper pipes. These pipes leaked and caused a significant amount of water damage in mobile homes. If they have not damaged the property you are considering, count your blessings but you may also want to knock on wood, cross your fingers or hold your breath.
- Underwrap damage. The underside of a mobile home has a strong tarp-like barrier that keeps moisture from getting in. It also keeps rodents from getting in and pulling out insulation. When repairs are done that require this underwrap to be cut, it is often not resealed in an effective or lasting way and that opens a door (quite literally) to bug and rodent infestations as well as the aforementioned water damage. So, while it is a quick fix at the time of initial repair, if done improperly, it can cause the home-owner significant issues over time.
- Electrical issues. When a mobile home leaves the factory everything is required to be up to code and it will meet at least certain base standards of safety and efficacy. However, if previous owners have had electrical work done that wasn’t up to code, it could cause problems over time that may be costly.
Obviously, when you are shopping mobile homes, you want to make a good investment. If that means a very low price to purchase but a potentially substantial price tag on the cost of repairs necessary you need to get quotes upfront or have a good idea of what the repairs cost before you can make a good decision on the return on investment. More costly repairs are typically air conditioning units, electrical or mold and water damage. Plumbing issues, depending upon the type, can be easier and less expensive fixes as are many cosmetic concerns.
In summation, you really do not want to be on the hook for repairs when you get into mobile home investing. Do necessary repairs once in order to make the home sellable. Once you have done that, avoid the temptation to quickly rent it and instead put your efforts into selling the home. Think about it this way, if this is something you decide to do full time and if you are the landlord on more than one property–you are potentially on the hook and dumping any profit you could be bringing in into multiple costly repairs that simply do not benefit you. And if Murphy’s Law has anything to do with it, you will have costly repairs pop up at the same time. That risk alone can take the fun and ease out of mobile home investing and you could find yourself back at a desk job, clocking in and answering to someone other than yourself. And who wants that?
Need I remind you? I am a woman who is proud of what I have done. I am also proud of what I have not done. You should be too.
BiggerPockets, “5 Costly Interior Mobile Home Repairs (& How to Handle Them!)”, John Fedro, March 18, 2016