A few weeks ago, a friend gave me an offer I couldn’t pass up: a chance to tour the facility where the Casino Royale was docked.
The yacht served as the floating lair of Le Chiffre, the villain in Daniel Craig’s first James Bond movie, Casino Royale.
So I slipped on my stealthy sunglasses and made my way down to the Safe Harbor marina in Fort Lauderdale, which is known as the Yachting Capital of the World.
Brad at Safe Harbor Lauderdale Marine Center in Ft. Lauderdale, FL
Safe Harbor marina is a massive 65-acre facility that holds the title of the largest yacht repair/refit facility in the country.
And the Safe Harbor brand aims to be the “intersection of luxury and adventure in the context of boating.”
Here at the Intelligent Income Daily, one of our aims is to provide you with the highest quality and safest income investments at the best price on the market. Sometimes, investment opportunities can be found in the places you least expect them.
Which is where the Safe Harbor marina comes into play. You see, it is one of the crown jewel properties owned by a real estate investment trust (REIT) that few people know about.
Today, I’ll share with you what makes these jewel properties so successful and two REITs to keep on your watchlist. They own an eclectic mix of properties, including marinas, recreational vehicle (RV) parks, and manufactured homes.
Limited Supply, Growing Demand
The Safe Harbor marina I visited is owned by a REIT called Sun Communities (SUI).
Sun Communities, along with its competitor Equity LifeStyle Properties (ELS) are two of the largest owners of marinas in the country.
While the boating industry is economically sensitive (people tend to buy yachts when times are good), marinas stay busy even during recessions thanks to a huge imbalance in supply and demand. There are roughly 12 million registered boats across America but an estimated supply of only about 1 million wet slips (on-water storage for boats).
Plus, waterfront properties are increasingly being redeveloped for other purposes, leading to a shrinking supply of marinas. According to Sun Communities, 85% of their marinas have a waitlist of customers looking for a berth to open up.
But, marinas are just a small portion of the portfolio for these REITs. Another important type of property they own is RV parks.
Camping in a RV is an increasingly popular hobby as it offers more affordable vacations and allows people to enjoy the outdoors while maintaining access to creature comforts like utilities and internet.
Increasing numbers of people are beginning to live in RVs year-round, providing stable income for RV parks.
But the largest portion of these REIT portfolios is not marinas or RV parks, but manufactured housing communities.
Manufactured houses are built in a factory and transported to the site where they will be used. They are much more affordable than traditional construction – nearly half the cost. But, people living in manufactured houses often don’t own the land underneath and pay rent. Still, it is much cheaper than renting a single-family home or apartment.
Manufactured houses are often associated with mobile homes and carry a stigma of low quality. Although modern manufactured houses are built to high standards, this perception leads to the belief that manufactured housing communities will bring down property values in an area.
This, along with restrictive zoning and regulations has led to very limited development of new manufactured housing communities over the past decade. That allows owners of existing manufactured housing communities to regularly increase their rents in line with inflation.
So while it may seem there is little in common between manufactured housing, RV parks, and marinas, they are all properties where there is limited supply to serve growing demand.
Built to Weather Any Storm
This has helped REITs like Sun Communities and Equity LifeStyle Properties maintain positive income growth every single year over the past two decades – even during the Financial Crisis and the pandemic.
That’s the kind of recession-resistant business I want to have in my portfolio. But, these REITs are not trading at a discount just yet. For the time being, keep them on your watchlist. Although these are quality companies, you want them for a good price.
But there are several recession-resistant REITs selling at a discount right now. If you want to see my entire REIT portfolio and receive a free pick, check out my presentation here and watch to the end.
Those at the Intelligent Income Investor get access to our model portfolio, as well as trade alerts and special reports on the highest quality dividend paying companies the market has to offer. Our focus is on finding safe and secure dividends to create a growing income stream that will passively support your lifestyle with stress-free investments.
All in the hopes that you too can retire with your own Casino Royale.
Happy SWAN (sleep well at night) investing,
Brad Thomas
Editor, Intelligent Income Daily
Source: Wide Moat Research