The ‘Local Records Office’ Lists The Advantages And Disadvantages Of Purchasing A Mobile Home In Pekin, Illinois
An investment is a lifetime goal for personal income goals and while many start off with this new business idea to make money from a mobile home, there are some things to consider beforehand. As mobile homes have a reputation for being less valuable, less profitable and less worth of deserving of anyone’s time and /or effort. So while you may be an investor looking for some side income in Pekin Illinois, the Local Records Office recommends doing your research first, as some investors see that the profit is not great and that you may be holding onto a property that devalues over time resulting in losing both your time and money.
The Local Records Office also notes that some states have a cap or a limit on how many mobile homes you can buy or sell for a profit per year. When you also must comply with rules and obtain your mobile home retailer or the dealer license before you make a purchase in Pekin, Illinois, buying Illinois mobile homes with investing in mind, has the cap at four mobile homes to buy and sell for profit per year.
When looking further into Pekin, Illinois’ state licensing requirements, as you will want to become bonded, have insurance, experience, pass written tests, etc. the exact license requirements can be directed to this Illinois phone number: 217-782-2880
And while others find issues with Illinois states’ regulations, Kevin Barnes commented, that in Illinois, “They stated that once the dealer information and of course payments are sent in, that the state then sends out inspectors to check out our location of sales. The guy I spoke with said it is pretty informal, that they want to ensure that we actually have a detached building with signage that is where the company is registered to. Have you heard of anything like this? I asked the guy if renting an office would suffice, he said that the detached building has to have no other businesses inside it. That just seems a little weird to me.”
There are some with reasons to believe there are some who create success in traditional real estate investing, such as John Fredo who has built a six-figure passive income stream by investing in mobile homes. You can find the video here where John puts together a free mobile
The advantages of purchasing a mobile home in Pekin, Illinois:
- While many people are at the disadvantage in the market of buying homes, the Manufactured Homes are one of the more affordable options. And in both good and bad economic times, there will always be a need for affordable housing. While currently, near 20% of families in the U.S. have incomes of $20,000 or less per year, this allows less than $500 per month in total housing costs. And between low-income apartments or MHCs that fit in this budget, the mobiles homes are the preferred option, as they allow more privacy, a smaller yard and a safer “community” feeling.
- There is also some stick built home builders that have standard floor plans and options that allow them to build homes for prices similar to mobile homes. So, if you prefer a stick built home, you might want to look into whether such a builder is in your area so that you can compare the quality of construction with a newer mobile home.
- Another advantage is you may find that mobile homes offer flexibility. Since mobile homes are usually more affordable than a stick built home and are only semi-permanent, if you own land, you can place a mobile home on it now and then remove it in the future. As this may be an alternative option when you are uncertain and want to own the land long term, or do not want to commit to a stick built home now, or you cannot afford a stick built a home right now.
- Although mobile homes are not easily moved once set-up, they are easier to move than a stick built home. So once a stick built home is built, it is more or less there permanently.
- An additional advantage mobiles homes offer is that they are built in controlled environments. This means they can consistently be built to a high standard. And because they are manufactured in such conditions, the construction delays due to either weather or difficulty scheduling subcontractors tend to be less likely.
The disadvantages of purchasing a mobile home in Pekin, Illinois:
- The disadvantages of buying a mobile home include value depreciation, like buying a new car, once the mobile home leaves the factory, it quickly drops in value. Stick to built homes, on the other hand, that normally appreciates in value over time, also because nine times out of ten the underlying land of a mobile home is also not part of the deal.
Although a person who owns both the land and the mobile home may see a potential value of the combined property increased over time, it is likely that the underlying land is increasing in value, and not your mobile home.
- Mobile homes depreciate in value is that they are personal property, not real property. “Real property” –is land and anything attached to it permanently. And anything that can be removed without any “injury” to the land is not real property. Personal property –is anything that is classified as movable and is not considered real property. So even with a mobile home, that is not easily removed from land once placed, they are still considered personal property.
(Although, in many locations, a person who owns both the mobile home and underlying land could convert the mobile home to real property by taking some affirmative steps). Yet, stick built homes is also considered part of the real property.
- A related disadvantage is that mobile homes, being that they are personal property, are also usually more expensive to finance. And personal property loans, also known as “chattel loans,” usually come with higher interest rates and shorter terms comparative to a mortgage loan.
- The age, size, condition, set-up, location and any additions to the home also all come into question when dealing with a lender for deciding to put money out for this type of loan.
Some requirements by lenders may include:
-The mobile home must sit on top of a cement foundation or slab
-The mobile home must be built within the last 20 years
-The mobile home must pass all current applicable codes
-The mobile home must sit on a land owned property that is by the same owner as the home
Additional disadvantages to mobile homes –typically they are located in a mobile home park. So, despite “owning” your actual home, you still have a landlord, to whom you will have to pay rent (for the land) and answer to in compliance with the park rules. And the landlord may at any point decide to evict you, in which case you will be faced with either moving or selling.
And when looking for an exit strategy, mobile homes are not easy to resell, especially when located in a mobile home park. Because they are relatively immobile, (unless the buyer wants to keep the mobile home where it is), finding a buyer can be a challenge and it can even cost you several thousand dollars to move the mobile home. And while selling a home with seller financing has become stricter in the more recent years, the ability to create a large cash payday will most likely not happen. In short, many end-user-buyers that interested in purchasing a mobile home, whether on private land or inside a park will most of the time, not have the $10,000 to $100,000 available to purchase a home outright.
Though this may not be a disadvantage, when the mobile home and land are sold together, like a stick built house, despite significant advances in the quality of mobile home construction, there is still a stigma attached to a mobile homeownership that will turn some buyers off.
The final disadvantage is that unlike stick built homes, whereas they are built on a permanent foundation, mobile homes are usually placed on temporary foundations. And during a natural disaster, such as an earthquake or a severe storm, mobile homes are more prone to damage.