How does investing in stocks stack up to mobile home investing?
If you’ve ever found yourself defending your stock market investments because you “don’t like to deal with tenants,” or “don’t want to spend my weekends getting my hands dirty fixing up old houses,” – you need to read this…
“I like to invest in stocks because I don’t want to deal with tenants”
There are plenty of excuses to invest in stocks. Perhaps your grandparents did okay in the stock market. Maybe that is what most of your colleagues and ex-school buddies are doing. Maybe there are even some wealthy people that you aspire to be like who have invested some money in stocks. Maybe you have even picked some individual stocks that have performed pretty well for the last couple of months. But with more leading Silicon Valley and Wall St. minds and wallets exiting old school stocks, and checking into mobile home park investing, it’s certainly a wakeup call to look into new investment options.
Whether it is fear of a rumored stock market bubble swelling, or merely the wisdom of looking to diversify an investment portfolio, real estate undeniably stands out as the most attractive option to explore. However, there can be many misconceptions among first time property investors. These sadly often become excuses not to participate.
This includes worries about having to fix up properties like a DIY show on TV, having to deal with nightmare tenants, and not being made to look foolish by investing in something they really don’t get. The next few sections of this report tackle these concerns, and bring clarity to the synergies and contrasts between investing in stocks and real estate like mobile home parks.
Invest within Your Circle of Competence
The principle of investing within our “circle of competence” is often repeated by Warren Buffett. Buffett of course may be known for his stock plays, but is actually one of the biggest ambassadors in investing in real estate, and specifically in mobile homes. In fact, those that know Warren’s moves well know that he continuously names his real estate investments as his best. With no mention of stocks in his top 1-3 list.
Some of those reading this may know stocks extremely well. Yet, how well do they really intimately know every business, industry, and the factors impacting them? Contrast this with real estate. Each and every person reading this, and everyone they know has dealt with real estate and housing. They’ve dealt with it their entire lives. Those that have struggled without housing are just as familiar with its importance. Ever since birth we’ve needed shelter, seen most of our parents spend the bulk of their lives worried about paying for it. Real estate is something we deal with every day. Is there anything we know better?
Security of Capital
Before any promises of returns on an investment comes the security of capital, and return of investment. The stock market is notorious for its volatility, and this can even carry over to publicly traded real estate stocks and REITs. Every industry, asset class, and type of investment has its cycles. However, direct real estate investment offers far less volatility. And it is always there. There can be zero downside protection in the stock market. You can be completely wiped out.
Truly Passive Income
With mobile home parks investing can be completely hands-free. With a professional system and management in place there is no need for rolling up your sleeves and picking up a hammer, answering tenant phone calls, or collecting rents in person. This means truly passive investing, and truly passive income. If you invest in stocks via an advisor and then into managed funds you may be enjoying passive income, but often with double the costs taken out. If you are day trading there isn’t much time for restful sleep.
The Power of Having Others Invested in Your Success
Most investment opportunities really count on you investing in, and fueling the success of others. Mobile home park investing is almost unique in that it provides you with a team of others invested in your success. As a mobile home park investor most often you really mostly own the land. Residents often own their mobile home units, and are leasing the land from you. This does two things. First, it makes the investment even more secure. The land isn’t going to be flattened by a hurricane or tornado or fire, and it’s pretty hard for someone to run away with. Second, it places numerous others in charge of preserving and nurturing your investment. For mobile home park residents this is their slice if the American Dream. They are homeowners, ‘stakeholders’, and they are families putting down affordable roots. To others, these properties may seem more than a little shy of the Ritz, a Manhattan condo, custom Bay area home, or mansion on Miami Beach. Yet, to residents they are equally as valuable.
Timing is everything when it comes to making an investment. It’s pretty obvious where the stock market is, and what lays ahead for stocks in general. Then look at the future for mobile home parks. In one way or another American housing is only going to get more expensive. Mobile homes are effectively one of the last bastions of affordable housing, and affordable homeownership. If demand is any barometer of the future performance of an asset class, then it is pretty obvious where mobile home parks are headed.
So how do stocks compare to mobile home investing? When investors really dig in, they will discover that real estate, and in particular mobile home parks really don’t have to be that complicated or difficult to own and profit from. In fact, mobile homes stick out as superior investments. You know housing. You know that affordable housing is a big issue today. And that isn’t going to change. Done well mobile home park investing offers a lot of security, passive income, can leverage a highly motivated workforce of others invested in your success. And the timing couldn’t be better.