Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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