Claiming Tax Deductions for Your Rental Property

Investing in Real Estate has been around probably since the first tepee was built and it shows no signs for the moment of letting up in it’s popularity. The cable channels have about a dozen different shows on buying junkers, fixing and flipping for a profit. Seems like everybody is making a fortune but we all know that Uncle Sam gets his cut too. But there are a few things that you can do to make his cut a little smaller. Read on…

Single-family homes and small apartments or office buildings are popular investment vehicles for small investors. Many people consider owning rental houses not much different than owning their own home. Like owning a home, mortgage payments that finance the purchase of a rental property can eat up a large chunk of the rental income. To encourage housing availability for renters, the Internal Revenue Service allows tax deductions on a number of rental property expenses.

Rental Property Deductions

Similar to the home mortgage deduction, interest paid during the year on the mortgages of your rental properties are tax-deductible. The property taxes are also deductible. Unlike the home mortgage deduction, all rental property expenses are itemized on Schedule E. If you own more than one property, the form provides space for the itemization of expenses for each property separately. You can also deduct other rental property expenses, including utilities paid, landscaping, and maintenance and repair costs.

Active Investor

You can fully deduct your mortgage interest and many other expenses for each property if you actively engaged in the management of your properties. To be an active investor, you do not need to make all repairs or physically show the properties to tenants. You can hire a management firm and still be considered an active investor if, for example, you review and approve a tenant’s application or you approve repairs that exceed a certain dollar amount.


If you have a significant net loss on your rental properties, you may encounter limits on what you can deduct. The IRS allows an active investor to fully deduct the total net loss on rental properties up to $25,000 if your modified adjusted gross income is no more than $100,000, you participate in no other passive activities, and you have no current or prior year disallowed losses or credits from passive activities.

Passive or Personal Use

If you were a passive investor, you can deduct the expenses up to the amount of income you received for each respective property. You will also need to complete Form 8582 to determine what portion of the loss, if any, you can offset against other passive income. If you used the house for personal use but rented it out for at least 15 days, as with a vacation home, you can deduct mortgage interest and real estate taxes, but many of the other expenses may not be deductible.

Record Keeping

As with the mortgage for your personal residence, the lender must send you Form 1098, a mortgage interest statement, by January 31 following the end of the tax year for each property you own. Keep these and other property expense records to use for completing Schedule E and, if necessary Form 8582.


Rental Property Deductions

Walmart Still Considered Excellent Long Term Buy

There are many reasons to consider Walmart stock to add to your investment portfolio including the fact that it’s a well established company with over $400 Billion in sales last year alone. Considering that they now have over 4,600 stores, there’s a good chance that there’s a store within a short drive from your home and they keep on building new locations.

We all have been to Wal-Mart before haven’t we? Some love the experience and tout the store as having the lowest prices, while other claim they go site seeing at Wal-Mart for odd looking people. Whatever your opinion is of the store, there are two things that can’t be debated. 1. Wal-Mart has the lowest prices out of any Omnichannel retailer/e-tailer and 2. Wal-Mart’s application and e-commerce experience are amazing

Compare Wal-Mart to Amazon?

Why do investors feel the need to compare Wal-Mart to Amazon (NASDAQ:AMZN)? I am not certain. Amazon is a behemoth, that operates in every industry imaginable. Amazon seeks to invest every dollar it has ever earned. While Wal-Mart has decided to return much of the profits to shareholders.

Amazon’s e-commerce business is its least profitable, yet it makes up the majority of its revenues. In 2016 alone, Amazon did $93B in online retail sales! But, by 2022, analysts expect that just 17% of retail sales will be done online.

Wait a second…If I am not mistaken that leaves 83% of retail sales to be done in stores? This means there are still tremendous value in retailers, and many people still prefer to shop in stores.

We should compare Wal-Mart to Costco, Target, and Dollar General Instead:

When you begin to look at Wal-Mart in a different light, against traditional retailers, it begins to look very appealing. Unlike Costco (NASDAQ:COST), Target (NYSE:TGT), and Dollar General (NYSE:DG), Wal-Mart has a seamless Omnichannel experience. Don’t believe me? Go ahead, order on the Wal-Mart application. I dare you! Compare it to Amazon. Now try the same thing with Costco, Target, and Dollar General. Good luck.

Wal-Mart is capitalizing in areas that other retailers are completely missing the ball on. For example, Wal-Mart’s brick and mortar locations now allow for online ordering with in store pickup. This shows me that Wal-Mart is focusing tirelessly on allowing the customer to buy the product where they want to, pick it up where they want to, and use it where they want to. Wal-Mart has shown me lately they are serious about providing amazing customer experiences.


Wal-Mart is also keenly aware of a gigantic problem in E-commerce, stolen goods. In 2015, 11 Million packages were stolen, while 41% of consumers said that they won’t order online because they fear this exact issue. Wal-Mart recently announced a partnership with smart lock maker “August” to make in home deliveries. Not only will this mitigate the issue of theft, but will enable a more seamless grocery delivery experience. The homes will be equipped with cameras for those worried about the delivery men. The last mile has proved to be challenging even for behemoths like Amazon, who have had to invest in lockers to hold their packages. Despite its failure, I think that the user base/appeal for ‘Doorman’ shows a change in consumer behavior, and I think Wal-Mart is on to something.

1. The Acquisition has transformed Wal-Mart with New Technology and a New User Base is intensely focused on capturing the millennial market from other companies by offering exceptional service and a membership free model. They offer products that are trendy and popular with millennials while offering prices that are similar to Wal-Mart. offers superior customer service than Amazon, with simple ways to connect to a live human when you need one. is also offering quarterly promotions giving 5% back on certain categories, taking aim at the credit card companies who have similar promotions. is growing 280 times faster than Amazon! Can you believe it? Jet has gone from 100,000 customers in July of 2015 to more than 3.6 million today!

Millennials are not fans of gigantic companies that have the power to exert control over its customers. They prefer the cool, and trendy little guys. Check out’s new premium grocery brand called ‘Uniquely J’. I am certainly a fan!

2. The Omnichannel Solution Wal-Mart Offers is Superior to All Other Retailers:

Like I mentioned above, if you haven’t used the Wal-Mart application I urge you to give it a shot. If you haven’t ordered something off of you should give it a chance.


Because Wal-Mart has such a strong brick and mortar presence it allows them to leverage the data from the store front to recommend products online. I recently was buying some toiletries and household products and sure enough 1 month later around the time when I needed more products, the Wal-Mart app recommended I order it.

I decided to place the order and two days later my product arrived on my doorstep. By leveraging these capabilities Wal-Mart is allowing for a more seamless experience with the customer deciding when and where to purchase. Wal-Mart is doing an exceptional job at managing every piece of data and integrating it into its Omnichannel strategy.

In addition to the aforementioned points above, Wal-Mart’s prices are significantly cheaper than on Target, Costco, & Amazon. I encourage you to compare basic necessities that you buy from other sites to those on The differences are material and should at some point impact the customer loyalty at other companies.

More about Wal-Mart



Apple Stock to Double in Value?

Is it possible that a company as famous and as successful as Apple could be undervalued by roughly 100%. Are all the Stock Market Guru’s and financial experts asleep at the wheel? I don’t know the answer to that but I do know that one pretty damn good investor, Warren Buffett, just recently purchased about 130 million shares of Apple. Maybe he knows something we don’t. 

It would seem an odd thing that the most famous company over the past decade, and today’s market cap leader, could be seriously undervalued versus related, somewhat similar investment opportunities.

The first sections run through some simple arithmetic and the underlying assumptions to show that a rational investor (yours truly, I hope) can easily justify $300+ right now for AAPL shares for new money looking at related alternative homes for the money. The second part of the article provides my take on how and why this intensely-studied company with a narrow product line could end up being so undervalued, and why Mr. Market is wrong here.

I use Warren Buffett’s somewhat recent large stake in AAPL and comments he made more than once on the stock this year to discuss what I think that he, as an example of the mythical Mr. Market, gets right about the stock and what Mr. Market may still be getting wrong. This is important to me, because if I’m bullish on an asset, I want to know why the asset is misperceived and therefore mispriced.

One small note before the meat of the article: this was written on Sunday night, with Friday’s closing prices. I was on the road and did not have time to submit this until Tuesday, pre-open. AAPL is up a little to $159.75 at this time, versus $157 when the article was written. The S&P 500 (SPY) is up marginally from Friday, as well. Please adjust for this if you want to be precise.

I doubt this is necessary, as the real point of this article is not to say that AAPL is worth some specific number, rather that if it’s reasonable to calculate that its fair value is about double its current price, it’s a strong contender to be A) owned and B) overweighted in an investment portfolio.

First, the basic math that shows the undervaluation, and the assumptions that are used to get there.

Estimating AAPL’s earnings yield

AAPL is a good stock for an earnings yield approach, because its free cash flow is similar to its EPS. That’s as opposed to companies with high capital spending needs, such as IaaS companies or oil producers.

The earnings yield is the reciprocal of the P/E, expressed as a percentage. So, a 20X forward P/E would translate to a 1/20 = 5% forward one-year earnings yield.

What is AAPL’s forward earnings yield? Of course, we don’t know the future, but AAPL has enough stability that allows a guess to be made (that’s my first assumption). Just going with consensus, which shows $11.05 as FY 2018’s EPS, and at Friday’s close for AAPL around $157, the following earnings yield can be projected in a way that makes AAPL comparable to most of its large cap peers.

Namely, AAPL has so much extra cash and a high profit, high-FCF business model that it could lever up a bit and then have a balance sheet much more like its peers in SPY. Except for a small number of other tech giants, AAPL’s other comparators in SPY or Dow 30 (DIA) and general large cap sector have already levered up. So I first subtract about $14/share of value from AAPL’s stock price.

This $14 number is computed using AAPL’s 6/30/17 balance sheet that shows the following assets that are cash-like or otherwise liquid:

  • $77 B in cash and short-term investments
  • $23 B in receivables
  • $10 B in other current assets
  • $185 B in long-term investments

These total $294.5 B including rounding.

From this, I subtract all liabilities, which total $213 B.

This leaves $81.8 B of excess financial assets, or close to $16/share. When thinking about the availability of this to shareholders via either dividends or share buybacks, tax must be paid first, so I haircut this to $13/share. That leads to an adjusted share price of $144, or 13X consensus forward EPS. That comes to a 7.7% earnings yield, which is likely to be similar to AAPL’s FCF yield.

There are at least two small adjustments to think about regarding that earnings yield. One is that without all those balance sheet assets, AAPL would earn a little less in interest income. The other is that to simplify thinking about forward earnings with those of peers such as Alphabet (NASDAQ:GOOG) (GOOGL) and Amazon (AMZN), it’s reasonable to think of CY 2018, not AAPL’s FY 2018 that ends at the end of September next year.

There is a larger potential adjustment, namely that the trend of consensus FY 2018 EPS estimates has been moving up. Over many years of AAPL-watching, that trend has been the investor’s friend, and I expect the same this fiscal year as well.

So I’m going to go with a forward adjusted earnings yield of 8% for AAPL based on CY 2018 EPS. It’s approximate, but good enough to use for further analysis.

The next section contains some comparisons of AAPL stock with alternatives. I’m using a 10-year time frame, assuming that major companies and major investments are best thought of that way rather than worrying about what happens this quarter or this year. It is going to take many years for a share of any stock to pay off in reality (as opposed to trading it for capital gains).

The assumptions

The assumptions are twfold.

One relates to the market as a whole:

According to a spreadsheet that Standard and Poor’s maintains, S&P 500 GAAP EPS have risen at a 5.5% annual rate since the calendar year ending 12/31/88. This assumes $107 EPS for the S&P 500 (SPY) for Q3, for which earnings are just now being reported.

I’m going to assume that 5.5% remains the CAGR for EPS of SPY for the decade ahead.

The next assumption is that AAPL will beat SPY by about 2.5% per year, i.e. grow EPS at an 8% CAGR over the next 10 years, due to its leading positions in the tech sector and in the consumer products sector. AAPL products are changing the world more than those of any other company, and the change is just getting going (think Apple Watch and Apple Pay along with the iPhone).

AAPL as an absolutely undervalued stock (not a comparison)

Basic math: If AAPL’s 1-year forward earnings yield is 8%, and EPS compound at 8% per year, then AAPL’s share price will rise to $192 by year 10 if AAPL’s earnings yield (P/E) in 10 years remains the same as it is now.

This would be more than OK from a zero coupon bond or a junior biotech, but in addition, shareholder returns include the actual earnings that AAPL will be making over the 10 years and which it will either retain or deliver to shareholders via dividends and/or buybacks. Since we do not know the precise path of the assumed 8% growth rate (it’s unlikely to be steady as compound interest is), I assume 10% per year as a conservative average annual total return, probably more like 11% if the growth path is relatively steady or (better) front-loaded.

Thus, total returns in this situation would be in the range of 8% price appreciation just from EPS growth, plus an average of 10% or more earned and returnable to shareholders along the way each year. This implies a high-teens annual total return if the terminal P/E stays the same.

This is clearly “too high.” the question is, what is an appropriate forward earnings yield?

My answer is 4%, which would provide a 7.7% yield in year 10 at 8% compounded annually. The average yield is around 5.5%, which is similar to the yield on many junk bonds. I would rather have AAPL, but the comparison is not easy.

This implies a TTM P/E for AAPL right now around 35X, similar to that of Facebook (FB) and Alphabet, and an AAPL price around $300 per share.

A 4% forward earnings yield right now also implies that at the end of year 10, investors would be looking at a forward earnings yield of 8.3% at an unchanged stock price and the same 8% growth rate. So, the predictable return in this case would be the actual earnings. The unpredictable part would be whether AAPL’s price would be higher than $157, giving a lower forward earnings yield, or lower than that, trading at a higher forward earnings yield.

I would think this is a fair choice, and that AAPL’s forward earnings yield of 4% “works” by this general analysis. Even requiring a 5-6% as a starting earnings yield would mandate a sharp repricing of AAPL much higher right now to get to that fair value.


More on Apple Stock

Investing in Gold Using Correlations? Beware


The Markets are just too complex to base your trading on only one set of rules, for example if “X” happens then you should invest in “Y”. There’s always more to it when it comes to being a successful investor. So, if one so called investment expert says that if the GDP is heading down, you should buy Gold. Uh, maybe… 

Of late, I have seen many articles postulating what moves gold up or down. We have heard all the old reasons being put forth from GDP, to a hedge against market volatility to interest rates, to the US Dollar, and many more. Unfortunately, market history simply does not support these reasons as a consistent driver of gold, as I have detailed in many past articles:

In fact, a recent article on gold suggested that “[w]e all know that gold is negatively correlated to GDP growth.” Well, since gold rose between 2000-2008, and as you can see from this attached chart that REAL GDP did as well, are we really sure that we “all know that gold is negatively correlated to GDP growth?”

In fact, take note that the stock market also rose strongly during this same period of time. Moreover, I have seen many other charts presented which offer no evidence that there is any real relationship between gold and GDP.

I have discussed this many times in the past. Correlations cannot be wholly relied upon unless you understand when those seeming correlations will end. And, since most correlation analysis does not present any indication of when those correlations will end, they are no better than using a ruler to determine your projections for any chart.

Such linear analysis will be of no use in determining when a change of trend may occur. And, one does not need such analysis to assume the current trend for anything will continue. In fact, this is likely why so many intra-market analysts have done so poorly in the last 5 years as they failed to see the coming break down in the correlations they follow (even though we were warning about these impending break downs back in 2015).

Price pattern sentiment indications and upcoming expectations

For those following us for the last six years, you would remember that we were not only accurate in our assessment for a top being struck in the metals complex in 2011, but we were also accurate in our assessment for a bottom being struck at the end of 2015.

Since that time, the market has provided us with what looks like a very nice 5-wave structure off the 2015 low, followed by a corrective pullback. Now, when I see a larger degree 5-wave structure (wave 1) being made off a multi-year bottom, followed by a corrective pullback (wave 2), I am on alert for the heart of a 3rd wave to take hold. And, in the metals complex, those are quite breathtaking rallies. For this reason, I have erred on the bullish side of the market as the market was looking like it was setting up for that 3rd wave in 2017.

However, rather than providing us the 3rd wave rally for which I was seeking confirmation, 2017 has been exceptionally frustrating as the market has invalidated several set-ups for that major 3rd wave break out.

Yet, when presented with the same opportunities on any chart, I would have probably reacted in the exact same fashion. Most of the time, the market will follow through on such set ups, while in a minority of circumstances we would see the market continue on a much larger degree 2nd wave pullback. Clearly, the market has decided that 2017 was going to be a year of consolidation.

Even though we have not had the 3rd wave break out, we have not yet broken any of the lows we identified throughout the year. And, for those that have heeded my warnings about not using leverage until the market proved itself to be within its 3rd wave, you could have still made money on each of these rallies. In fact, the GDX is approximately 10% over the lows we identified this year, even though it may not “feel” that way due to the frustration we have all felt with this current consolidation.

 However, as I have been warning for the last few weeks, the GDX may be signaling it could break below those pullback lows we have struck this year. But, much depends on how high the rally I am expecting in the complex takes us.

If the GDX is able to make a higher high in the 26 region in the coming weeks, then it leaves the door open that green wave (2) may not break below the July lows. However, if the market is unable to develop a higher high over that struck in September, and then breaks below the low made before the current rally began, it opens the door to the GDX dropping down towards the 17 region before year end to complete a much more protracted wave ii, as presented in yellow on the daily GDX chart.

My preference still remains that GDX, silver and GLD all make a higher high in the coming weeks, which would put a more bullish stance upon the complex (even though another drop will likely take us into the end of the years), I really have nothing to which I can point that would suggest this will occur within a high degree of probability.

So, I have turned extremely cautious of the complex, at least until it proves itself with a higher high being struck in the coming weeks. Until such time, I am going to be more protective of my positions.

And for those who are still viewing this market from an extremely bullish perspective, I will be honest with you and tell you that I do not see any high probability set-up which would suggest the market is going to imminently break out in the heart of a 3rd wave just yet.

For this reason, I think that one can maintain a certain amount of patience (as if 2017 has not forced you to be patient enough), as even if we see a rally to a higher high, it will likely be followed by another pullback (as a wave (2) in GDX and a c-wave in GLD and silver) before we are finally ready to break out over the 2016 market highs.

More on Gold Investing


Can Halliburton Keep the Streak Going?


One of the top providers of services for the oil industry has been beating earnings projections for about three years straight now and it shows no signs of doing anything differently now. The last quarter report raised some eyebrows with a significant earnings report and some of the experts are expecting more of the same. 

Major oilfield service provider Halliburton Company (HAL) is scheduled to report its third-quarter earnings on Monday, Oct 23, before market opens.

In the preceding three-month period, the company delivered a positive earnings surprise of 21.1%. Moreover, both Halliburton’s segments – Completion and Production, as well as, Drilling and Evaluation – reported revenues slightly better than our estimates thanks to improved utilization and pricing gains in North America.

On a further encouraging note, the world’s second-largest oilfield services company after Schlumberger Limited (SLB) has an incredible history when it comes to beating earnings estimates. Investors should note that Halliburton hasn’t missed earnings estimates since mid-2014.

mportantly, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells is likely to maintain this trend in the third quarter. Evidently, multiple tailwinds including the recovery in commodity prices have buoyed the entire space.

With U.S. activity accelerating and margins set to remain strong, Halliburton’s underlying results are likely to come ahead of our expectations. The positive sentiment surrounding the stock can be gauged from the fact that the estimate revision trend has been solid with eight upward estimate revisions and just one down in the last two months.

Consequently, the stock has done better than the peer group so far this year; it is down 17.5% in 2017 as against 30.2% loss for the Zacks Oil and Gas Field Services industry.

Let’s delve deep to find out the factors likely to impact Halliburton’s third-quarter results.

A Likely Positive Surprise?

With U.S. rig count falling to record levels last year, oilfield services players (like Halliburton) were hit hard. Unprecedented declines in activity levels and a sharp fall in upstream spending led to lower revenues and pricing headwinds.

However, as commodity prices steadily improve and drilling activities pick up, the market for services companies is on the mend. Though we are still not anywhere near the activity highs seen in 2014, spending on exploration projects have experienced a much-awaited rebound. The energy explorers, buoyed by the jump in commodity prices, are set for improving sales and earnings – a part of which is likely to be pocketed by the long-struggling oilfield service providers.

In fact, during last quarter’s earnings release, the company also sounded optimistic in its view that the North American land market is improving rapidly, driven by increased utilization and pricing – particularly for pressure pimping.

As a proof of the resurgence in activities, the Zacks Consensus Estimate for third-quarter Completion and Production revenue is pegged at $3,430 million, much higher than $3,132 million reported in the second quarter of 2017. Sales in the Drilling and Evaluation unit is forecasted to be $1,888 million, more than the prior quarter figure of $1,825.

We also appreciate Halliburton’s successful cost-management initiatives in the midst of weak oil prices over a length of time. Last year, the company successfully implemented on its plan of pruning annual costs by $1 billion. In fact, Halliburton has used the challenges prevailing in the industry to its advantage, mainly by offering low cost solutions that aids producers in churning out more by investing less.

See more on Halliburton


California House

The California Association of Realtors recently released a detailed report with regard to the sales activity in the California market and one set of numbers show that a common problem still exists and that problem is that there are less homes for sale this year as compared to last year. The good news is that prices are still rising and appreciation is alive and well.


California’s housing market eased into the fall home buying season as seasonally adjusted sales rose both month-to-month and year-to-year in September, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.  

Closed escrow sales of existing, single-family detached homes in California remained above the 400,000 benchmark for the past 18 months and totaled a seasonally adjusted annualized rate of 436,920 units in September, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the September pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The September sales figure was up 2.2 percent from the 427,630 level in August and up 1.7 percent compared with home sales in September 2016 of a revised 429,760. While year-to-date sales are running 2.6 percent ahead of last year’s pace, that margin has been eroding since the first quarter.

“While it’s encouraging that statewide home sales improved both monthly and annually, the year-over-year sales rate is losing steam, reflecting the persistent shortage of homes for sale and an easing of concern over a surge in mortgage rates,” said C.A.R. President Geoff McIntosh. “Additionally, for the areas that have been affected by the recent wildfires, we anticipate sales will pull back in those regions as damages are assessed and replacement efforts are coordinated.”

After reaching its highest level in a decade in August, the statewide median price slipped in September but remained above the $500,000 mark for the seventh straight month. The $565,330 August median price dropped 1.8 percent to $555,410 in September but climbed 7.5 percent from the revised $516,450 recorded in September 2016. The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling, as well as a general change in values.

“The statewide median price rose at the fastest annual pace since February 2017 as the housing supply shortage continued to dictate the market, taking a toll on home sales and affordability,” said C.A.R. Senior Vice President and Chief Economist Leslie-Appleton-Young. “The tight inventory situation is particularly acute in the Bay Area region, which saw double-digit price increases in Alameda, Contra Costa, San Francisco, and Santa Clara counties, while sales fell markedly from the previous year in six of the nine Bay Area counties.”

Other key points from C.A.R.’s September 2017 resale housing report include:

  • All of the major regions experienced month-to-month and annual sales declines, with sales in the San Francisco Bay Area declining 4.2 percent from a year ago, the Inland Empire falling 4.0 percent, and the Los Angeles metro region decreasing 2.5 percent from September 2016.
  • In general, home prices across the state continued to grow in September. Forty-one of the 51 reported counties recorded a year-over-year price increase, with 20 of them growing at double-digit rates.
  • Statewide active listings continued to decline in September, dropping 11.2 percent from a year ago. Since the beginning of the year, active listings have declined by more than 10 percent every month, and the number of available listings for sale has trended downward for more than two years.
  • With strong sales growth and little new inventory to replenish the housing supply, C.A.R.’s Unsold Inventory Index fell from 3.5 months in September 2016 to 3.2 months in September 2017. The index measures the number of months needed to sell the supply of homes on the market at the current sales rate. The index stood at 2.9 months in August.
  • Thirty-six of 51 counties experienced a decline in housing inventory from last year. While every single county in the Southern California region had a reduction in the unsold inventory index from the previous year in September, the Bay Area remained the region with the tightest housing supply. Six of the nine Bay Area counties had less than three months of inventory in September, and of the six, two had less than a two months’ supply.
  • The median number of days it took to sell a single-family home in September was 20 days compared with 18 days in August and 28 days in September 2016.
  • C.A.R.’s sales price-to-list price ratio* was 99.1 percent statewide in September, 99.5 percent in August, and 98.6 percent in September 2016. At the county level, San Francisco had the highest ratio at 116.6 percent and Mariposa had the lowest at 92.5 percent.
  • The average price per square foot** for an existing, single-family home statewide was $270 in September, $268 in August, and $254 in September 2016.
  • San Mateo had the highest price per square foot in September at $883/sq. ft., followed by San Francisco ($875/sq. ft.), and Santa Clara ($687/sq. ft.). Counties with the lowest price per square foot in September included Lassen ($118/sq. ft.), Kings ($132/sq. ft.), and Kern ($136/sq. ft.).
  • Mortgage rates declined further in September as 30-year, fixed-mortgage interest rates averaged 3.81 percent in September, down from 3.88 percent in August but was up from 3.46 percent in September 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rate edged up in September to an average of 3.16 percent from 3.15 percent in August but was up from 2.74 percent in September 2016.

Note:  The County MLS median price and sales data in the tables are generated from a survey of more than 90 associations of REALTORS® throughout the state, and represent statistics of existing single-family detached homes only. County sales data are not adjusted to account for seasonal factors that can influence home sales.  Movements in sales prices should not be interpreted as changes in the cost of a standard home.  The median price is where half sold for more and half sold for less; medians are more typical than average prices, which are skewed by a relatively small share of transactions at either the lower-end or the upper-end. Median prices can be influenced by changes in cost, as well as changes in the characteristics and the size of homes sold.  The change in median prices should not be construed as actual price changes in specific homes.

*Sales-to-list price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage.  A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

**Price per square foot is a measure commonly used by real estate agents and brokers to determine how much a square foot of space a buyer will pay for a property.  It is calculated as the sale price of the home divided by the number of finished square feet.  C.A.R. currently tracks price-per-square foot statistics for 39 counties.

Leading the way…® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® ( is one of the largest state trade organizations in the United States with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.


CONTACT: Lotus Lou, (213) 739-8304,




Retirement Income Fund Paying Over 6% Monthly

Utility Fund

Here’s a great utility fund that’s just been knocking it out of the park since 2004. It has just about everything going for it with low risk, long term growth, consistent dividend payouts, extra bonus in December and right now it’s at a discount.

As a result of the recently completed capital raise, retirement income investors can now buy shares of closed end fund Reaves Utility Income (NYSEMKT:UTG) at a 7% discount and lock in 6.2% yield paid monthly. But you need to act soon because I expect the market will recognize this exceptional value and reduce the discount and yield before long.

About UTG

Since its inception in 2004 the Reaves Utility Income closed end fund has been a great income investment for investors seeking income and capital growth in a low-risk investment. The objective of the fund is “to provide a high level of after-tax total return consisting primarily of tax-advantaged dividend income and capital appreciation. It intends to invest at least 80% of its total assets in dividend-paying common and preferred stocks and debt instruments of companies within the utility industry.”

At 6/30/2017 the fund’s portfolio consisted of 24% multi-utilities, 22% electric utilities, 12% media companies, 12% diversified telecommunication services, 10% oil and gas, and 5% REITs. About 88% of portfolio investments were in US issues and 12% in foreign companies.


Since its inception in February 2004 the fund has returned an annual average of 12.17% at net asset value and 11.08% at market price, outperforming the S&P 500.


The fund paid its first dividend of $0.096 in April 2004 and has maintained or increased its dividend every month since including the challenging period of the Great Recession. The fund raised its dividend nine times over the years most recently in October 2016. The fund currently pays a dividend of $0.16 per month. As of 10/13/2017 the monthly income yield is 6.21%. The fund has paid a special dividend every December.

Long-Term Growth

In addition to providing reliable monthly income, the fund has also grown investors’ capital. The fund grew its net asset value per share 4.6% per year on average from its offering price of $19.07 in 2004 to $33.43 now without any reinvestment of dividends.

UTG Fund


Zacks- Top 5 Stocks for Income

Income Stocks

There are many ways to invest in the markets and a lot depends on your own personal circumstances and the amount of risk that you’re willing to take. For example, the buy and hold approach is great if you have the time but it doesn’t always fit everybody’s needs. Sometimes you just want to get paid now. Here’s five stocks for income generation from Zacks

Not all investors intend to wait forever to generate returns from their investments. Nor do they have an appetite for risk. They also might have the need for immediate and regular income generation.

Here are five stocks for such investors-

Vedanta Resources Plc (VDNRF )

Headquartered in London, Vedanta Resources plc is engaged in exploring, extracting and processing minerals, and oil and gas. It produces zinc, lead, silver, copper, aluminum, iron ore, oil and gas and commercial power. The company operates primarily in India, Zambia, Namibia, South Africa, Liberia, Ireland, Australia and the United Arab Emirates. The Basic Materials-Mining segment, of which Vedanta is a part, is in the top 23% of the 265 Zacks-classified industries. As may be expected, this isn’t a seasonal business, so output varies on other considerations. Operating and interest expenses form a smaller part of the outlay than COGS. Financial leverage is usually high, but the debt-to total capitalization ratio is maintained at very manageable levels of within 38% (which dropped down to nearly 30% in the June 2017 quarter). Vedanta is reportedly one of India’s leading exporters, especially in the zinc, aluminum and refined copper, iron ore and crude oil segments, so it is set to benefit from the government’s recent growth initiatives. Given the increasingly favorable operating climate, the company plans to significantly expand operations over the next few years.

As far as valuation is concerned, the company’s share price is up 19.3% in the last six months compared to 13.5% for the industry.

Wheeler Real Estate Investment Trust, Inc. (WHLR )

Headquartered in Virginia Beach, Wheeler Real Estate Investment Trust, Inc. is engaged in acquiring, financing, developing, leasing, owning and managing income producing assets, such as strip centers, neighborhood centers, grocery-anchored centers, community centers and free-standing retail properties. It operates in the mid-Atlantic, southeastern and southwestern United States.

The REIT & Equity Trust-Retail segment, of which WHLR is a part, is in the top 40% of the 265 Zacks-classified industries. The business is somewhat seasonal with strength in the December quarter, which is the biggest retail selling season. While revenues have been range bound in the last five years, gross profit, net income and earnings have been trending up. Interest expense has come down steadily as debt levels were lowered. The debt-to total capitalization ratio has therefore gone down to under 60%. Wheeler has been adding properties while selling off those that weren’t yielding enough, which together have increased its revenues and earnings. It has also leased out over 94% of its gross leasable area (GLA), an indication of the efficiency of its operations. But it’s also to be noted that the company’s credit facility may be reduced in the very near future, which could impact its ability to make new purchases.

Top 5 Income Stocks


Seniors to Get a Real Raise in Social Security

Senior Citizens

Social Security gave out a zero increase in 2016 and a measly 0.3 % increase in 2017 which was just enough to cover the added cost of Medicare premiums for most seniors. Essentially a zero increase in spendable cash to offset inflation. This coming year, in 2018 we’ll finally see a decent, not great, but decent increase of about 2.2%. This could help a lot of retiree’s as it’s estimated that about 25% rely on Social Security as their only source of income.

There are several major changes to the Social Security and Medicare programs that are slated to take effect a few months from now, beginning in 2018. Some consist of good news, relatively speaking. One change is not so good and will be decried by seniors who enjoy traveling to national parks.

Biggest Social Security Raise in Five Years

Coming off of a zero cost-of-living adjustment in 2016 and a miserly .3 percent COLA in 2017, the predicted raise of 2.2% for 2018 is a big deal, yet still relatively small. After all with inflation running around 2.0% a 2.2% raise doesn’t leave much room for error.

It also serves us well to remember that the inflation rate faced by the group affected by this Social Security change is in most cases higher than the quoted 2% inflation rate. This is because the senior population is faced with medical, medical insurance, deductible, co-pay and drug cost inflation that easily can top 10% or more.

Depending upon what portion that these medical expenses represent in the retiree’s budget, that 10% inflation rate applied toward those expenses could easily wipe out the benefit of a 2.2% COLA adjustment.

So, all in all, this was a modest, yet qualified piece of good news that came out of Washington, D.C. when the Social Security and Medicare trustees projected that Social Security recipients would receive a 2.2 percent cost-of-living adjustment in 2018.

It would be the largest increase since 2012, when the COLA rose 3.6 percent. Social Security recipients received no cost-of-living adjustment in 2016 and just 0.3 percent in 2017.

Average Social Security Benefit Impact

According to the Social Security Administration, the average retired worker brought home $1,368.67 a month in June 2017. Therefore, a 2.2% COLA would translate into an extra $361.33 a year in 2018, or $30.11 a month.

Social Security provides vital income protection to workers and their families. Benefits are indexed annually for inflation When the SSA determines, as they did in 2016 that inflation is 0%, then no COLA will be applied to the following year’s benefit.

Unlike savings accounts, which can be run down, Social Security benefits last a lifetime. Because of this aspect, many investors have come to view their S.S. benefit akin to an annuity, or guaranteed bond component, even better than a fixed income investment because it is inflation-adjusted.

Social Security incorporates a progressive benefit formula that ensures that those with low lifetime earnings receive proportionately larger benefits. Social Security plays a crucial role in reducing poverty among older people. Without Social Security, 41 percent of all older Americans would be in poverty. Because of this large role that Social Security plays in our economy, only 8.8 percent were below the poverty line in 2015.

Relative Importance Of The Social Security Backstop

Social Security is the main source of retirement income for most Americans. Approximately half of people age 65 and older depend on Social Security for more than half of their retirement income. About one-quarter rely on Social Security for all or nearly all of their income. As a reflection of how important this program is, among poor households headed by someone of retirement age, Social Security is virtually the only source of retirement income.

Retire smarter


U.S About to Become a Buyer in Gold Market?

Gold Investments

It’s not as far fetched as you might think.

One source predicts that it could happen

within the next one  to three years.

History actually shows that it has

happened in the past and it looks like it’s

ready to come about again. We could see

the price of Gold skyrocket to over $5,000

per ounce.


A huge new buyer is about to enter the gold market. That could be a year off, maybe two, or three at the most.

I’ll give you a hint who: your taxes will pay for it. If true, it could send the price of the barbarous relic soaring above $5,000 an ounce, a target long led by the Armageddon crowd.

When I spoke to a senior official at the Federal Reserve the other day, I couldn’t believe what I was hearing.

If the American economy moves into the next recession with interest rates already near zero, the markets will take the interest rates for all interest bearing securities well into negative numbers. At that point, our central bank’s primary tool for stimulating US businesses will become utterly useless, ineffective, and impotent.

What else is in the tool bag?

How about large-scale purchases of Gold (GLD)?

You are probably as shocked as I am with this possibility. But there is a rock-solid logic to the plan. As solid as the vault at Fort Knox.

The idea is to create asset price inflation that will spread to the rest of the economy. It already did this with great success from 2009 to 2014 with quantitative easing, whereby almost every class of debt securities were hoovered up by the government.

“QE on steroids”, to be implemented only after overnight rates go negative, would involve large scale purchases of not only gold, but stocks, government bonds, and exchange-traded funds as well.

If you think I’ve been smoking California’s largest cash export (it’s not the sunshine), you would be in error. I should point out that the Japanese government is already pursuing QE to this extent, at least in terms of equity type investments.

And, as the history buff that I am, I can tell you that it has been done in the US as well, with tremendous results.

If you thought that President Obama had it rough when he came into office in 2009, it was nothing compared to what Franklin Delano Roosevelt inherited. The country was in its fourth year of the Great Depression. US GDP had cratered by 43%, consumer prices crashed by 24%, the unemployment rate was 25%, and stock prices vaporized by 90%. Mass starvation loomed. Drastic measures were called for.

FDR issued Executive Order 6102 banning private ownership of gold, ordering them to sell their holding to the US Treasury at a lowly $20.67 an ounce. He then urged congress to pass the Gold Reserve Act of 1934, which instantly revalued the government’s holdings at $35.00, an increase of 69.32%. These and other measures caused the value of America’s gold holdings to leap from $4 to $12 billion.


More on Gold

 Page 2 of 142 « 1  2  3  4  5 » ...  Last »