Dave Says: Mobile Home as an Investment Resource?

Dear Dave,
I’ve got a mobile home that I still owe $28,000 on that I use as a rental property. It sits on an acre of land that’s worth about $10,000, and I paid that off a few years ago. I’m thinking about refinancing the mobile home and going from an interest rate of 11.25 percent down to eight percent. Do you think I should do this?
--Karen

Dear Karen,
I’d refinance the mobile home, but you’ve got a bigger issue here. Should you KEEP the mobile home? And the answer is no.

Right now you’ve got a big chunk of cash wrapped up in something that’s going down in value like a rock. I’d sell that thing in a heartbeat, Karen. Otherwise, you’re going to see $28,000 worth of mobile home turn into about $8,000 over the next few years. That’s not a good investment strategy.
-- Dave