North Dakota - the State that simply can’t build homes fast enough
America’s modular homes industry is on the rise. According to Report Linker’s February 2013 US Prefabricated Housing Market Analysis, prefabricated homes are set to increase 15% annually through to 2017. Although the sale of prefabricated homes suffered along with the rest of the US housing market in recent years, 2006-2009 saw the industry achieve a rise in market share.
Buying a modular home has numerous advantages over buying a traditional building. According to the Manufactured Housing Institute, technological advances and improved flexibility in the construction process have attracted an increasing number of urban and suburban buyers, with new architectural styles and designs making the homes increasingly customisable.
The current financial challenges faced in the US mean that for many families prefabricated housing is the perfect solution. Improvements in build quality mean that features such as working fireplaces and state of the art kitchens have become the norm. Significant enhancements in energy efficiency also provide potential sources of savings in modular homes.
One company that has been quick off the mark in offering high quality modular homes is unique worldwide investment company Property Horizons. The company has focused on meeting the desperate housing needs of workers drawn to North Dakota’s Bakken Formation oil boom.
North Dakota, as a mainly rural state and the US’s largest producer of many cereal grains, has suffered greatly during the economic crisis. Matt Damon, the multi-award winning actor whose latest movie Promised Land explores the issue of industrial fracking, commented recently,
"It´s a heart-breaking situation in rural America at the moment. If you think a recession hits a city hard, go to the country instead.”
Yet North Dakota is in a unique position. Instead of spiralling unemployment, the state has the lowest unemployment level in the US. With oil workers flocking from all over the country, the state has overcome the recession but now faces a different problem – a chronic housing shortage.
Property Horizons is addressing both sides of the problem. As well as offering executive-style mini-hotels to single oil workers (available from an investment price of $27,950 for a half fraction), the company has added single family homes to its portfolio.
Director and Founding Partner Robert Gavin explains, “There are 15,000 oil workers and rising in North Dakota. Many have families who are unable to join them due to the lack of accommodation. In Williston, one of the flash points for the crisis, Property Horizons is now offering 174 luxury modular single family homes, each with its own acre of land.”
The development – Horizons Ridge – will include three and four bedroom homes, with two or three bathrooms, basements and double or triple garages. Sale prices will begin at $270,000 for a three bed/two bath home, rising to around $350,000 for four bed/three bath properties. Buy-to-let investors can expect to achieve predicted rental returns of 13-15% for corporate tenancies and the leveraged cash on cash yields based on net rental profit as a function of the down payment will be around 50-60%, with financing available.
With the prefabricated housing market share on the increase and the Bakken Formation oil boom attracting more workers every day, savvy investors will need to move fast to benefit fully from Property Horizons’ developments. For more information, visit propertyhorizons.co.uk.