Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Why You Should Buy Trailer Park Stocks

Companies / Investing 2019 Nov 28, 2019 - 05:35 PM GMT

By: Robert_Ross

Companies

10,000 baby boomers retire every day.

But retirement won’t mean endless rounds of golf or trips to Tuscany for a lot of these folks, who are now 55–75 years old.

In fact, retirement will lower the living standards of 40% of boomers, according to The Wall Street Journal. That translates to a lifestyle downgrade for 15 million American households.

It gets worse: One in three boomers has zero money saved for retirement. Zilch. Nothing. And 6 in 10 have less than $10,000.

Then there’s the debt problem. The average boomer is $99,000 in debt, according to the Wharton School.


This is all pushing boomers to rethink their retirement plans. For many, that means trailer parks…

They’re Called “Manufactured Homes” Now

The trailer parks I’m talking about look more like budget resorts. At least, that’s what I’d been told. And they’re called “manufactured homes” now.

Still, I had to see for myself. So I drove up to Napa to see one of these communities.

After parking at the entrance, I walked over to a perfectly manicured mini-golf course. Behind me, kids splashed around in an Olympic-size swimming pool. About 100 yards away, a community library sat in the shade of giant palm trees.

This certainly wasn’t a “trailer park” in the traditional sense. It was downright pleasant. The allure started to make sense.

For one, manufactured homes cost nearly $300,000 less than traditional houses. For retirees worried their nest egg won’t last as long as they need, it can be the perfect fit.

John Mauldin calls this problem longevity risk. And it’s something many retirees are coming to terms with.

Most retirees simply can’t afford their dream beach house. Far from it. So they’re turning to plan B: manufactured home communities like the one I visited.

4X the S&P 500

Investing in manufactured home real estate investment trusts (REITs) is a great way to ride this trend.

REITs own and operate real estate—everything from hospitals to warehouses to trailer parks. They trade just like stocks, but they’re required pay out 90% of their profits as dividends. So they’re great for income investors like us.

Last November, we talked about investing in two manufactured home REITsSun Communities (SUI) and Equity LifeStyle Properties (ELS). Since then, they’ve surged 53% and 42%, respectively. (The S&P 500 has risen 12.3% over the same period.)

Sun Communities and Equity LifeStyle have more or less quadrupled the S&P 500 over the last 12 months. But I think these stocks are just getting started.

The Great Downsizing Is Coming

Remember, 10,000 boomers are retiring every day with nowhere near enough money. But there’s a solution: 60% of US households own a home.

Duke University economics professor Charles M. Becker thinks many retirees will sell their traditional houses and move into manufactured homes.

"Trailer parks can be thought of as gated communities for people who aren't so wealthy,” says Becker.

In fact, manufactured homes have been the largest source of affordable housing in the US for 30 years.

Meanwhile, US home prices are at all-time highs:

This means two things:

  • Retiring boomers can sell their homes on the highs; and
  • They can buy a much cheaper manufactured home and use the rest of the money for retirement.

This trend is already in motion. Sales of manufactured homes are surging:

It’s no fluke that manufactured home sales started rising in 2011. That’s around the time boomers started to retire.

I’m not the only one connecting the dots here. Legendary investor Warren Buffett was an early mover in the manufactured homes space.

Buffett’s holding company, Berkshire Hathaway, bought Clayton Homes for $1.3 billion in 2003. Clayton is the largest builder of manufactured homes in the US.

Another Recession-Proof Trend

One of the best parts about manufactured home stocks is they’re incredibly resilient—just like Walmart (WMT).

Remember when the S&P 500 plunged 20% over three months late last year?

Sun Communities and Equity Lifestyle held up remarkably well during the freefall. Their respective stocks only dipped 2.7% and 1.5%.

Retirees will continue downsizing into manufactured homes for at least the next decade. Meanwhile, manufactured home REITs pay fat dividends. And they’ve been rising over three-times faster than the S&P 500.

Ever better, they also hold their value during a downturn—making them a good fit for any income investor’s portfolio.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules