Pros and cons of being a landlord for a mobile home
If you own a mobile home and are considering renting it out, you've joined many others who wonder if renting out is a good idea. Well, as with all things, getting a tenant for your mobile home has advantages and disadvantages. However, armed with the right information, you should be able to decide if renting out is the best idea for you.
Mobile home maintenance
Unless you live near the mobile home or have the time to periodically check up on it and carry out routine maintenance work, having a tenant might be a good idea. The tenant can ensure that the home is always tidy, regularly use the plumbing, and regulate the thermostat particularly during the winter to prevent the pipes from freezing. The con is that as the landlord, you will probably have to pay for repairs when necessary.
Financing and rental income
One of the major benefits of renting out the home is the prospect of the rental income generated. This is particularly appealing if your ultimate plan is to sell the mobile home for a tidy profit when the market is good and stable.
However, if the home is in a mobile home park, the downside is that you will need to pay the park's rental fees every month, make sure that the tenant adheres to park rules, and ensure the tenant is consistently cleaning their immediate environment. The last point can be a problem if the tenant doesn't care about such things. To avoid this, be sure to properly vet the tenant before renting out to them. Tenant placement services can assist you in this regard. They will take over the tenant application process and check their credit and references to ensure that you have the best fit placed in your mobile home.
Expenses like repairs, park rentals, and mortgage costs are all necessary for maintaining the home, and these can pile up substantially. Luckily, you can often get some tax deductions on the income generated from the rentals. Not to mention that in most states, mobile homes are in the same category as cars, which mean property taxes typically don't apply to them.
Also, landlords who lived in the home for no more than 2 years in the last 5 years can sell the home without incurring a capital gains tax. However, the downside is that if you rent for longer than 2 years, you will have to pay the capital gains tax when you sell. This can, in fact, cancel out any tax advantages you had during the rent period.
With this information on hand, you can now sit down, crunch your numbers, and figure out if renting is the best route for you.