By Justin Spittler, editor, Casey Daily Dispatch
Every day, 10,000 Americans turn age 65.
That’s the age when you’re meant to retire.
But many baby boomers aren’t ready for this day.
I say this because one out of three boomers has set aside nothing for retirement. And six out of 10 have saved less than $10,000.
But it gets worse. The average boomer is in debt to the tune of almost $100,000.
This, needless to say, is a major problem…
• Millions of Americans will have no choice but to delay retirement…
Others will retire… but far less comfortably than they hoped.
Many boomers even admit this. A recent poll found that some 40% of baby boomers expect their living standard to drop in retirement. That’s about 30 million Americans.
Now, a drop in living standard can mean many things.
For some, it will mean taking fewer vacations. For others, it will mean dining out less. But some Americans will make an even bigger change…
They’ll move into a smaller house to save money.
That’s right. Many boomers will downsize in the coming years.
• Many people don’t want to hear this…
But it’s not my job to tell you what you want to hear.
It’s to tell you what you need to hear… even if that means revealing an ugly truth.
Luckily, it’s not all bad news. As you’re about to see, savvy investors can profit from the “Great Downsizing.” And all they have to do is invest in a special kind of real estate.
• I’m talking about manufactured homes…
Now, I know manufactured homes get a bad rap…
Most people associate them with “trailer parks” and everything that goes along with those.
But manufactured homes have come a long way in terms of construction quality, style, and amenities.
Many new models are even quite nice. Some include linoleum floors that look just like hardwood floors. Others feature solid granite countertops.
But let’s face it. Most boomers won’t move into manufactured homes for the lifestyle.
No. This has everything to do with economics.
• Manufactured homes are largely, if not entirely, built in factories.
They roll off the assembly line.
Because of this, they’re cheaper to build than traditional homes. In fact, they’re about half the price (on a per-square-foot basis).
That’s exactly why more Americans will opt for manufactured homes.
• And we’re actually already seeing this play out…
You can see what I mean below. This chart shows how many manufactured homes were shipped every year since 2009.
You can see total shipments are up 94% since 2009. Also, notice that most of that growth came after 2012… when the first wave of boomers reached age 65.
• I wouldn’t expect manufactured home sales to slow down anytime soon, either…
To understand why, look at this chart.
It shows how many baby boomers are 65 years of age or older.
You can see that about 30 million baby boomers are already 65 or older. By 2030, that number is projected to more than double.
When you combine that with high debt levels and lack of savings, it’s easy to see why demand for manufactured homes will explode in the coming years.
I’m not the only Casey analyst who expects this, either.
• E.B. Tucker sees the same thing playing out…
E.B. Tucker is the senior analyst for Strategic Investor and editor of Strategic Trader.
He’s also a real estate expert. In early 2009, he realized that the U.S. housing bust would create a generation of renters. He raised money and bought a large portfolio of single-family rental houses at rock-bottom prices… as low as 10 cents on the dollar.
And like me, E.B. believes many Americans could soon have no choice but to move into manufactured homes:
I don’t think many people are going to have a choice. Where else are they going to live? What else will they be able to afford? People are running out of options.
Manufactured homes are cheap. They can be built on the assembly for a much lower cost. This is real innovation that we’re talking about. It’s innovation at the lowest cost.
So this is probably the direction things are headed.
Of course, I don’t think people have to live in trailers, and I think there’s a middle ground that will thrive that people will feel dignified living in, something that looks like a house even if it’s more efficiently made.
• Some of the biggest names on Wall Street are also banking on this trend…
National Real Estate Investor reported last month:
In mid-2018, the Blackstone Group bought a portfolio of manufactured home communities from Tricon Capital Group. Tricon reported that month the sale of 14 manufactured housing communities for an estimated $172 million.
In 2017, private equity firm Apollo Group management bought Inspire Communities, a manufactured home community operator with 13,000 home sites.
Then, there’s Warren Buffett – one of the world’s most successful investors. Buffett owns Clayton Homes. Clayton is America’s largest builder of manufactured housing and modular homes.
But here’s the thing.
• You don’t have to be a Wall Street insider to cash in on this…
Mom-and-pop investors can profit off the Great Downsizing, too.
And you don’t even have to buy actual real estate. You can profit from this trend by buying stock from your computer at home.
All you have to do is invest in companies that own and operate manufactured home communities. This includes mobile home real estate investment trusts, such as Sun Communities (SUI) and Equity LifeStyle Properties (ELS).
These companies are uniquely positioned to profit off this trend. Both have been rallying as of late, so it’s best to be patient and wait for a pullback to get in… And as always, never bet more money than you can afford to lose.
April 16, 2019
P.S. E.B. doesn’t just see a Great Downsizing on the horizon. He also believes we’re on the verge of a Great Migration. In short, he expects Americans to flee major cities in droves in the years ahead. You can learn more about this megatrend… and how to profit from it by signing up for Strategic Investor. Go here to sign up today and access all of E.B.’s research and explosive money-making plays.
Today, a reader agrees with Doug Casey that the “politically correct” movement is destroying America…
Yes, I agree that the censor of free speech is a detriment to a civil society. I wholeheartedly agree with Mr. Casey that people should be able to speak their mind without worrying about some P.C. jackboots stepping on their constitutional rights.
As always, please send your honest feedback, thoughts, and questions to [email protected].
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