And why real-estate investing makes sense for doctors.
If there’s one thing all doctors have, it’s patience…(and patients).
Doctors are selfless — they’ve prolonged their path to profitability, have spent years studying, training, and practicing before amassing any substantial earnings, and most have taken on significant loans along the way.
"I love investing in properties...but I hate being a landlord..."
Real estate investing requires a similar, patient attitude. Understanding the markets, sourcing the right property, and holding your investment takes time and necessitates a diligent, thoughtful, and methodical approach.
Real estate is intuitive to doctors because of its tangibility. Like the human body, properties are physical masses with intricate components that work together to make them livable, and ultimately, profitable. And in our experience, doctors, while trained to diagnose medical conditions, have an inherent ability to diagnose economic conditions that affect the value of these physical properties and condos.
Lately, our conversations with physicians who have had experience investing in multiple properties have led us to this conclusion — that they do, in fact, make great real estate investors.
The 2019 Medscape Physician Wealth and Debt Report asked nearly twenty thousand physicians about investing and financial wellness. The report consistently illustrates that from all the investing categories (stocks, bonds, real estate) that physicians invested in, real estate as a category experienced the least amount of losses. For example, when asked, “did you have a financial loss last year?” 17% of respondents attributed their losses to bad investments in the stock market, 10% said losses were due to business practice issues, and only 5% attributed losses to their real estate portfolio.
Doctors don’t exactly have the most flexible schedules, and real estate investing can become a time consuming side hustle. While the doctors that have engaged us have had great success through real estate investing, they consistently share the following pain points:
- “I love investing in properties, but I hate being a landlord or property manager.”
- “I don’t want to be subject to high minimums to invest (upwards of $25,000 or more).”
- “Real estate funds are ambiguous, I don’t even know which properties I own; all I know is the criteria.”
Dr. Peter Kim
The Passive Income, MD
Dr. Peter Kim, also known as the Passive Income, MD is well renowned for his investing expertise, particularly within real estate. His inspiration? “I had some other physicians that I saw who were living the life that I wanted, and they were pretty much all doing real estate,” he noted. Importantly, Dr. Kim started investing in crowdfunding so he could familiarize himself with the industry — “I didn’t know how to start; I didn’t know whether I could take on a rental property of my own,” he said.
Real estate crowdfunding has become an ideal way to gain access into a traditionally high cost, high barrier investment. Whereas traditional avenues into real estate investing have been cost prohibitive and network driven, crowdfunding has dramatically eroded these barriers. The technology implemented by these platforms is conducive to vetting each investment opportunity, connecting investors to deals, significantly reducing fees, and property diversification.