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By Matt Whittaker Contributor |

Stocks mentioned in this story: VTR, HCN, HCP, CSU, BKD

For some, age may just be a number. But for investors that number can have a dollar sign in front of it.

The United States is an aging nation. The baby boom after World War II and increased life expectancy are resulting in more seniors and increased demand for facilities where they can live with their peers and receive health care as they age.

According to U.S. government projections, the number of people age 85 and older will reach 6.6 million and nearly 2 percent of the population by 2020, up from 5.8 million in 2010. By 2050, that figure will have risen to more than 19 million, or more than 4 percent of the nation. By 2060, there will be nearly 100 million Americans that are 65 or older.

[See: 7 Stocks to Buy for the Baby Boomer Retirement Wave.]

There are about 22,000 senior housing and care properties in the U.S. – dominated by nursing care properties – in a market worth between $250 billion and $270 billion, according to the National Investment Center for Seniors Housing and Care.

“The demand for seniors housing and care is driven mainly by three factors: seniors’ desire for the less demanding, more carefree lifestyle offered by independent living; seniors’ desire for the socialization afforded by a community of peers; or seniors’ need for the daily personal care services offered by assisted living, memory care and nursing care properties,” the center says.

Some operations offer independent housing, assisted living services, memory care and skilled nursing all on one campus. These communities, which can have pools, social areas and restaurants, typically charge a hefty one-time entry fee and then monthly fees.

“It’s a huge difference from back in the day when you had just a nursing home,” says Mark Taylor, portfolio manager with Alpine Woods Capital Investors.


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Many baby boomers who are retiring now have helped their parents enter senior housing, Taylor says. They’ve seen that the facilities can be pretty nice and view them positively for their own long-term care, he says.

“It’s just a mounting demand for this product,” he says.

The favorable demographic trends and relatively inelastic demand for health care services should bode well for senior housing facilities for the foreseeable future, says Morningstar analyst Edward Mui.

But the risk is new supply of senior facilities, he says.

[See: The 10 Best REIT ETFs on the Market.]

Senior living-related stocks have underperformed over the last 12 to 14 months, says Peter Martin, analyst with JMP Securities. The profitability of the units – some with 30 to 40 percent operating margin in private pay facilities – has spurred development, causing worries about over supply, Martin says.

Also, concern about health care reform with the new administration has been adding volatility to senior living stocks, Mui notes. But volatility in real estate investment trusts could create opportunities to invest in companies with solid fundamentals, such as the demographic trend backing senior living facilities, he says. Further, a repeal of or changes to Obamacare could help the nursing side of the business that has gotten hurt as the Affordable Care Act incentivizes outcomes rather than fee-based systems, he says.

Martin says senior care facilities can make for good investments over a longer term time horizon. After all, a current 65-year-old newly retired person may not need to enter a facility until their 80s, he says.

Taylor likes the larger continuing care retirement communities with multiple locations in a state or region because issues with vacancy rates at one facility can be balanced out by other facilities. He also likes those in areas with above-average socio-economic profiles because the more affluent can absorb fee increases.


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Liquidity is also important for these facilities because some need to have 70 percent or even 90 percent occupancy to break even, Taylor says, adding that he likes to see more than 300 days of cash on hand.

One way to invest in senior living is through REITs such as Ventas (ticker: VTR) and Welltower (HCN) and HCP (HCP) that own a significant number of assisted living, independent living and skilled nursing facilities.

They have a relatively diverse portfolio and have gone through portfolio repositioning in recent months, Mui says.

Then there are providers such as Capital Senior Living Corp. (CSU) and Brookdale Senior Living (BKD).

[Read: Why Every Investor’s Portfolio Should Include REITs.]

With a market capitalization of $2.5 billion, Brookdale is five times the size of Capital, with its market cap of about $500 million, but Martin thinks the latter is the stronger company, pointing to its cash flow and asset ownership. He says Brookdale’s 2014 purchase of Emeritus Corp. has been “detrimental” to Brookdale.

Find the Best REIT to Invest for YouStock Name1 Year ReturnGlobal Medical REIT Inc GMRE6200.53%Life Storage Inc LSI694.03%Condor Hospitality Trust Inc CDOR85.22%NexPoint Residential Trust Inc NXRT80.75%Power REIT PW76.30%MedEquities Realty Trust Inc MRT68.27%DuPont Fabros Technology Inc DFT58.10%Cherry Hill Mortgage Investment Corp CHMI57.54%Getty Realty Corp (Holding Company) GTY55.37%RAIT Financial Trust RAS54.28% a comment | Edit

Living In Mexico: Easy, Inexpensive, And Close To Home

September 27, 2014


High cost of living got you down? But you don’t want to leave the comforts and convenience of home?

Maybe it’s time to start thinking about relocating…and living in Mexico. Here’s why:

• The peso-to-dollar value is high—your dollar goes farther on everything from food and beverages to household supplies to Mexican real estate. And have no worries about the Mexican economy. It’s among the top 14 economies in the world, despite the global recession.

There are many reasons why you might want to consider a move to Mexico. But first….

If you’d like to learn more about why you might want to live in Mexico, we have a special Report just for you. Called “Why Millions of Americans are Moving to Mexico,” it provides the facts and information about Mexico the mainstream media won’t tell you.

You’ll learn all about the economy, visa requirements, how to get your pet into Mexico, and more. Learn about the top cities for expats in Mexico and decide which Mexico city is right for you. You’ll read the truth about safety and security in Mexico…and learn just how much it will cost you to live there. And…you’ll get the inside scoop on how to buy Mexico real estate – including five things to do before you sign anything.Leave a comment | Edit

How You Can Be Happy in Retirement

September 13, 2014

By: Larry Light │

It’s an old story: After a lifetime of work, you retire and expect life will be nirvana. Too often, you discover you can’t afford that kind of life. Or you can but are bored. Wes Moss, chief investment strategist for Capital Investment Advisors and a partner in Wela Strategies, in Atlanta, has some useful tips about how you can ensure a happy retirement:

People who feel more secure about their finances are more likely to be happy in retirement, a survey by Northwestern Mutual Life Insurance shows. If you don’t want to fall into the unhappy retiree camp, or even worse, not have retirement as an option, learn to avoid the pitfalls, and start saving today.

I’m really nervous about the financial picture for retirees in America. Look at these alarming numbers: One-third of workers have less than $1,000 saved for retirement, according to this year’s Retirement Confidence Survey by the Employee Benefits Research Institute.

Three quarters of near retirees have only about $26,000 in their retirement account, a report by the Schwartz Center for Economic Policy says. Nearly one in 10 older Americans live in poverty, and that rate only increases with age.

You can avoid that gloomy future, and retire happily and even early. If you are in your 40s or 50s, you still have plenty of runway left to get on the right track. Follow the steps of happy retirees that I uncovered through my 2013 National Money and Happiness Survey.

1. Clear your debts. Make a plan to pay off your mortgage as quickly and realistically as possible. Happy retirees typically have their mortgage paid off well before 65, while unhappy ones don’t. 2. Start saving early (or now). Many unhappy retirees delay saving any money until they hit 55, while some never start. A penny saved today is worth a lot more than a penny saved tomorrow. 3. Spend wisely. Happy retirees don’t necessarily own McMansions, so don’t feel like you need one, and spend a-third of your paycheck on mortgage. Instead, opt for a more reasonably priced home that requires less than 20% of your monthly income.

There are some other traits I find that happy retirees have. They tend to have more social hobbies, such as volunteering. They also have more children. Yes, kids might be expensive, but they keep you active and engaged. Divorcees have a higher propensity to be unhappy retirees. Divorce isn’t only a separation of two people, but also of your savings and income. One fun fact, BMW is the top-driven luxury car of unhappy retirees in my survey.

Take my Money and Happiness Quiz to quickly learn if you are likely to be a happy retiree. Being happy in retirement is not only about money, but you certainly don’t want to spend your golden years worrying about bills. Make a plan and start saving

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