recent study by RealtyTrac claims that if you are considering becoming a
landlord with single-family homes you should forget California.
Oklahoma, Florida could offer much better investments.
analyzed median sales prices and average fair market rents for three-bedroom
properties in 586 U.S. counties.
returns were calculated using annual gross rental yields: The average fair
market rent of three-bedroom homes in each county, annualized, and divided by
the median sales price of residential properties in the third quarter.
with home prices that have shot up can be difficult to get enough rent to cover
the mortgage. For instance, the study found that New York City and San
Francisco have gross rental yields below 4%.
the other hand, parts of Florida and Georgia where home prices are still
recovering from the 2008-2009 crash have yields of 20% and higher.
an investor in single-family homes in my area, I’ve never paid much attention
to national or regional studies. That’s because in my experience each county
has cities, and neighborhoods within those cities, that can hold great
investments … regardless of what broad-based studies may show.
gross rental yields are only a starting point in your search for a rental
property. They don’t mean squat if they’re getting eaten up by taxes, repairs,
and deadbeat tenants.
"My husband and I have
visited several countries that have attracted retirees from the U.S. And we
have it narrowed down to three, including Costa Rica. Health care is certainly
a concern. Fortunately neither of us has any particular problems. We are over
65 and have Medicare Parts A, B, and D. My question is, what becomes of our
Medicare coverage if we make this move?” Thanks, Melissa.
I did some digging, and replied
to Melissa …
Medicare doesn’t pay for services
you receive outside the U.S., Melissa. So it comes down to what to do with your
Since Part A (hospitalization) doesn’t cost you anything, you
might as well keep it.
You’re each paying about $105
(could be more depending on your income) a month for Part B, which is medical insurance covering outpatient
services. You can drop that coverage and save some money. Just contact Medicare for instructions.
suppose you move to another country. But after a year or so you decide it’s not
the paradise you had imagined, and you return to the U.S.
have Part A.
able to re-enroll in Part B, but
only from January 1–March 31, and you may have to pay higher premiums.
Part D has the same window to
re-enroll. But there shouldn’t be a penalty.
more thing, Melissa, if you are really serious about Costa Rica, I suggest you sign
up for one of George Lundquist’s Retire in Costa Rica on Social
Security tours. They’re well worth the money, and could save you a lot
of grief down the road. Plus you’ll have a heck of a good time!