Increase Your Returns as Demand for This Industry Grows

America is getting older.

I’m living proof of that. I still feel 30 in my head and often wonder who the old guy looking back at me in the mirror is some days.

I have aches and pains in places I never knew I had.

My wife stays on top of what tests and procedures I have to have every year because I passed the magic fifty threshold. I’ve been to the doctors more often in the last eight years than in the first five decades of my life, and I can’t have two ham sandwiches for lunch every day and mashed potatoes five times a week without a noticeable impact on the waistline.

According to U.S. Census projections, by 2035 there will be more people of retirement age than people under 18 for the first time in American history. By 2060, 23% of the population will be 65 or older.

The aging of America is a very long-term trend and shows no signs of reversing anytime soon.

That’s going to put one hell of a strain on Social Security and Medicare- but that’s a problem for another discussion entirely.

The aging trend is also going to create an enormous demand for healthcare services.

As that demand skyrockets, the healthcare industry will grow by billions, and here’s how we’re going to get our share of it …

Target Industry Needs

The argument over how all of this is going to be paid for is picking up steam as we get closer to the 2020 election, and I suspect it will continue for several more presidential election cycles.

What form the payment system for medical care is going to take is not something anyone knows right now.

The two things we do know for sure about medical care is that an aging population will create increased demand, and we know that pretty much all of the procedures, tests, surgeries, and consultations will take place indoors.

There’s going to be a growing demand for medical offices, surgery centers, laboratories, and other healthcare-related properties.

We have enough senior and assisted living facilities right now in the US, but eventually, we will need more of those as well.

Fortunes will be made collecting rent checks in healthcare-related properties, and we can participate through the ownership of healthcare-related REITs.

Since the National Association of Real Estate Investment Trusts started keeping track of returns in the sector, healthcare-related REITs have averaged 12.24% a year.

The S&P 500 over the same period has returned just 7.32%. $10,000 invested in healthcare REITs would have grown to $146, 174 while the stock investor would have just $60,973.

This REIT’s Portfolio Has Grown Over 800%

My favorite healthcare REIT right now is still Global Medical REIT Inc. (NYSE:GMRE).

Global Medical owns 91 buildings around the US that are leased on a triple- net basis to physician groups and healthcare systems.

This means tenants pay insurance taxes and maintenance, and the REIT cashes the rent checks without ongoing additional expenses.

One-third of properties are medical office buildings, but they also own long term care facilities, hospitals, surgery centers, rehab centers, and other healthcare-related real estate.

They focus on single-tenant properties and have a 100% occupancy rate in their portfolio right now.

Chief Investment Officer Alfonzo Leon talked about the company strategy on a recent conference call.

He said, “We focus on buying high-quality real estate in desirable secondary and tertiary markets, lease to profitable healthcare providers that are leaders in their respective fields. We focus primarily on acquiring medical office and outpatient treatment facilities in the $5 million to $15 million range and opportunistically acquire inpatient facilities typically in the $20 million to $40 million range. We leverage our experience and knowledge of healthcare real estate, identify deals with good risk-adjusted returns at cap rates that allow us to invest our capital accretively. We work tirelessly to build and maintain a robust pipeline of deals, which gives us the ability to be very selective and strategic with our growth.”

They’re doing more than just talking a good game.

The asset value of the portfolio has gone from $94 million when they did their IPO in 2016 to over $800 million today.

Funds from operation have gone from a negative number in 2016 to $1.43 in the past year.

They should be able to keep growing at an above-average pace for a very long time.

Global Medical avoids the larger, more costly population centers and concentrates on smaller markets.

The goal is to own the best facilities and lease them to the best practitioners in town, and they have a preference for those who offer a specialty that will be in demand by those 65 and older.

Every day in the US, 10,000 people turn 65. Nearly 90% of them have high blood pressure, diabetes, heart disease, arthritis, or some other long-term medical issue that requires constant attention and care.

In cities and towns across the United States, a lot of that care will take place in buildings owned by Global Medical.

As shareholders, we can collect our share of the rents while the increased demand drives the value of our properties higher.

I make no secret of the fact that I think you should own more REITs.

The advice of the so-called experts to have most of your money in common stocks and only a few percentage points of your portfolio in REITs makes no sense to me.

REITs have earned higher returns than stocks over the last 50+ years and pay much higher dividends, so much of that return is in the form of regular cash payments.

In most bear markets, they do much better than stocks as well.

Global medical allows you to own real estate that’s going to benefit from one of the strongest, longest-lasting trends in the world today.

While demand makes our property more valuable over time, we’re collecting a dividend stream that starts at 7.72% and should increase over time.

Your odds of making piles of money are much higher with this REIT than with stock indexes trading at almost 22 times earnings according to this week’s Barrons magazine.

To the Max,

P.S., It is a topic to revisit another time, but this is important. The Social Security Administration is a mess. Several audits by the U.S. Inspector General have found extraordinary errors in processing and paying Social Security Checks. One study estimates that Americans leave roughly $25 billion in unclaimed benefits every year. As many as one in seven collecting certain benefits have been grossly underpaid for more than 30 years, including one woman who found that she had been underpaid by more than $56,000 for 15 years. Here in this detailed report, we’ve taken the trouble to examine all 2,728 rules governing Social Security benefits. This report can help you, or someone you know find out if they could be one of the tens of thousands of Americans affected and how they can collect a lump-sum payment up to $23,441. Find out how to take the necessary steps needed to hold them accountable for these unpaid benefits right here.

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