Monday, April 30, 2012

Younger Boomers opting for hybrid LTC insurance

It’s not just older Boomers, 65 and over, who are worried about skyrocketing long-term care costs. According to a 2012 Buyer Study by the American Association for Long-Term Care Insurance, 53% of buyers were younger than 65 and going for combination policies.

In 2011, 48% of the buyers fell in that age group.

Combination policies include life insurance with the option for long-term care benefits. For the advantages and disadvantages of these hybrid policies, pick up a copy of A Boomer’s Guide to Long-term Care.


Best wishes,

George
P.S. I’m on Twitter. Follow me at http://twitter.com/efinancialwrite for frequent updates, personal insights and observations on how to have a healthy retirement.
If you don’t have a Twitter account, sign up today at http://www.twitter.com/signup and then click on the ‘Follow’ button from http://twitter.com/efinancialwrite to receive updates on either your cell phone or Twitter page.

Saturday, April 28, 2012

What investors can learn from Storage Wars

Have you watched the A&E TV show Storage Wars?

People bid for property left by storage bay tenants who stopped paying their rent. The bidders can’t go inside the units and only get five minutes to take a peek and decide how much they’ll pay. Sometimes they find some valuable goodies, such as rare paintings, and other times the stuff is worthless. So it’s kind of a crapshoot.

From a landlord’s prospective, though, think about how this storage business works …

If the tenant doesn’t pay within a week or so, you put a giant-sized chain and lock on the door. At that point you’re free to throw their possessions away or sell them, like happens on the TV show. The stuff is gone, you sweep the place out, maybe change the light bulb, and watta bing watta bang … you’re ready for the next tenant.

Local laws might vary somewhat, but you get the point.

I’ve owned and managed residential property for over 25 years, and getting dead-beat tenants out is tough. It can take months, and you could end up with half-a-dozen government agencies involved before it’s over.

Now, I hope you understand why I absolutely love self-storage REITs, like PSA, which is up 58.6% (plus dividends) since I put it in the portfolio on March 14, 2010.

For the week ending April 27, 2012, the e-FinancialWriter REIT portfolio is up almost 26% since implemented, not including 4% in dividends! Once again proving that real estate deserves a piece of your investment portfolio.

REIT
Sector
Blog date
 Price
 Closing price 04/27/12
Return to date %
Dividend yield %
PSA
Self storage
      90.75
                                           143.93
58.60
2.74







VTR
Health care
      52.87
                                             59.23
12.03
3.96
HCP
Health care

       36.81
                                                41.35
12.33
4.69
HCN
Health care

      47.53
                                             56.73
19.36
5.09
SNH
Health care

      22.00
                                              22.01
0.05
6.86







IAECREIN:CN
Canada
 19.45cn
24.30cn
24.93
0
ZRE:CN
Canada

 16.29cn
 20.13cn
23.57
4.98
INVRLPRA:CN
Canada

 5.45cn
 5.48 cn
0.59
1.78

NNN 
Retail
27.18
27.38
0.74
 5.62







Index return
since inception*




25.81

Avg 12-mo
return of REITs in portfolio*




11.49

Avg dividend yield of REITs in portfolio





3.97
12-mo return S&P 500




2.92


Source: Bloomberg
*Does not include dividends paid

If you have trouble seeing the chart, just in zoom in with your web browser.

Health Care REIT (HCN) announced this week that its Board of Directors declared a cash dividend for the quarter ended March 31, 2012 of $0.74 per share. The dividend will be the company's 164th consecutive quarterly payment, payable May 21, 2012, to shareholders of record on May 8, 2012.

Senior Housing Properties (SNH) will report it first quarter 2012 results on Monday. I’ll give a recap in a future posting.

Enjoy your weekend!

George
P.S. I’m on Twitter. Follow me at http://twitter.com/efinancialwrite for frequent updates, personal insights and observations on how to have a healthy retirement.
If you don’t have a Twitter account, sign up today at http://www.twitter.com/signup and then click on the ‘Follow’ button from http://twitter.com/efinancialwrite to receive updates on either your cell phone or Twitter page.

Saturday, April 21, 2012

Update on manufactured home REITs, and our index leaves the S&P in the dust!

On Sunday, I wrote about trailer parks, also known as manufactured homes in planned communities.

Three REITs are active in this market, and I’ve taken a closer at them:

·       Equity LifeStyle Properties (ELS) — Florida, Arizona, California, NE U.S.; for retirees
·       Sun Communities (SUI) — Midwest U.S.; all ages 
·       UMH Properties (UMH) — PA and NJ; lower income, affordable housing

All three REITs have had impressive returns over the past 12 months, in the 18% to 22% range. But their financials stink! The lousy earnings, or lack thereof, stick out like a sore thumb …

ELS reported its quarterly earnings on April 16: $0.30 vs. $0.61 last year. And they’ve been on a downward trend for the past three years, although they are starting to turn around. 

SUI reported 4th quarter 2011 losses of $0.10 per share on February 23, 2012, missing the $0.06 profit expectations of the 2 analysts following the company. That follows losses of $0.02 and $0.04 the previous quarters.

The next earnings announcement from SUI is expected next week. Estimates are for $0.15. But it would take several quarters of rising earnings to impress me.

UMH isn’t much better: A $0.01 loss for the final quarter of 2011 following two quarters of zero. And 2011 earnings were $0.14 vs. $0.52 for 2010.

Another important number to watch is debt-to-equity ratio. This shows how aggressive the company is in financing growth with debt. The higher it is, the more they have to pay in carrying costs, which can be a huge drain on profits.  

·       ELS: 65%
·       SUI: 102%
·       UMH: 51%

There are many good reasons why these REITs could be successful:

·       Nationwide, homebuilding is off and the surplus is dwindling.
·       Unemployment is dropping.
·       Retail is on the rise.
·       Boomers want to downsize.
·       Manufactured homes are a less-expensive alternative to traditional housing.

I think all three of these manufactured home REITs offer possibilities, so I’ll keep an eye on them. But at least until earnings improve, I’m staying away.

The e-FinancialWriter REIT portfolio for the week ending April 20, 2012, took a nice jump, up over 22% since implemented.  The average 12-return for each REIT was more than 10%, not including 4% in dividends!   

REIT
Sector
Blog date
 Price
 Closing price 04/20/12
Return to date %
Dividend yield %
PSA
Self storage
      90.75
                                           139.72
53.96
2.83







VTR
Health care
      52.87
                                             56.83
7.49
4.13
HCP
Health care

       36.81
                                                39.60
7.58
4.90
HCN
Health care

      47.53
                                             54.72
15.13
5.27
SNH
Health care

      22.00
                                              21.64
-1.64
6.98







IAECREIN:CN
Canada
 19.45cn
24.05cn
23.64
0
ZRE:CN
Canada

 16.29cn
 19.59cn
20.26
5.13
INVRLPRA:CN
Canada

 5.45cn
 5.48 cn
0.59
1.96

NNN 
Retail
27.18
27.28
0.37
 5.63







Index return
since inception*




22.17

Avg 12-mo
return of REITs in portfolio*




10.20

Avg dividend yield of REITs in portfolio





4.09
12-mo return S&P 500




3.08


Source: Bloomberg
*Does not include dividends paid

If you have trouble seeing the chart, just in zoom in with your web browser.

To read the posting where I introduced a specific REIT, click the “Blog date” link. And if you’d like to see prior reports, type “reit index” in the search box.

Enjoy your weekend!

George

P.S. I’m on Twitter. Follow me at http://twitter.com/efinancialwrite for frequent updates, personal insights and observations on how to have a healthy retirement.
If you don’t have a Twitter account, sign up today at http://www.twitter.com/signup and then click on the ‘Follow’ button from http://twitter.com/efinancialwrite to receive updates on either your cell phone or Twitter page.