Real estate’s bright spot

I’ve always liked real estate: Single-family rentals, duplexes, and self-storage facilities. As long as you buy it right and manage your expectations, real estate can provide a good cash flow and long-term growth.

And I’ve written before how real estate investment trusts (REITs) can let you dip your toe in this sector without worrying about the day-to-day hassles that come with being a landlord. Let’s face it, though, the market really stinks now, especially in the U.S.

Well, you might want to take a look at our neighbors to the north. It seems the Canadian real estate market has weathered the global financial crisis better than most.

Among the reasons:

• Strong exports of oil and other natural resources

• Strong Canadian dollar

• Low borrowing costs

Watch this YouTube video to learn what the Canadian REITs are doing in their own country and around the world.

And here are three Canadian-based real estate funds you might want to check out:

• IA Ecoflex Real Estate Income Fund (IAECREIN CN)

• BMO Equal Weight REITs Index ETF (ZRE CN)

• Investors Real Property Fund (INVRLPRA CN)

Best wishes,

George

Boomers not up-to-date on Medicare

Boomers are turning 65 at a record rate … 10,000 a day in fact … which means they’re eligible for Medicare.

However, a survey sponsored by the National Council on Aging and United Health Care found that many boomers are in the dark when it comes to Medicare. For instance,

• 46% of respondents have never shopped around for better Medicare coverage because many (41%) thought they couldn’t save any money,

• 35% were confused by Medicare,

• 16% didn’t understand Medicare at all,

• Less than half were familiar with the Medicare prescription drug “donut hole” or coverage gap, and

• Only 12% described their understanding of the health reform law as excellent or good.

What’s more, many respondents were not aware of extra benefits that can provide critical assistance, including Medicare Savings Programs, which help people with limited income pay for some or all of their Medicare costs, and Extra Help, which helps pay for prescription drug costs.

Look, no one knows what the future holds for Medicare. But ignoring what it currently offers could cost you big bucks down the road!

Click here to find more details about the survey and links to a bunch of helpful sources on Medicare.

Best wishes,

George

P.S. With so much uncertainty surrounding Medicare, protecting your finances from the ravages of long-term care is more critical than ever. Learn what you can do about it now.

Reader with Real Estate Questions

I had the following come in from a reader:

“George, we are considering purchasing a rental property. The question we have is: Can our adjusted gross income (if it is too high) preclude us from deducting any losses (depreciation, property taxes, mortgage interest) from our current income taxes?

“Also, do people incorporate and what would that do for us? I appreciate your input.” —Kay

My reply …

“Kay, your income should not prevent you from deducting losses. For more info, here are the instructions.

“Most taxpayers, including me, own the property personally and just file a Schedule E. Sure, you could incorporate. Tax wise, though, I don't see what that would accomplish for you. And a mortgage company will make you personally guarantee the note.

“Yes, it might shield you from liability in case of a law suit. But a good liability insurance policy can protect you even better.”

Best wishes,

George

P.S. Do you have a question about your real estate investment? Post it here or drop me an e-mail.