I am a doctor who dedicated 10 years after college to education and training in medicine so I could live the life of an ear, nose and throat surgeon for the past 26 years.
Like most, I lived in many apartments and townhouses before I bought my first home, an exciting milestone and accomplishment. We improved our home as we adjusted to the growing needs of our family. There began my education in real estate and its many benefits
I like real estate because it is tangible. It’s something you can see, you can touch, you can understand, and unlike medicine, it’s something you have complete control over.
Over the years through my books, blogs, podcasts and mastermind groups, I’ve discovered that investing in real estate provides many different benefits.
Breaking Out Of The Medical Mindset serves you to help you discover how to fulfill your life outside of medicine and to become the best version of yourself.
Earning horizontal income is a step in the direction to allow you to break free from the stranglehold and stagnation of the medical world.
Throughout my journey I’ve learned about the benefits of real estate investing, especially as it pertains to doctors. Here are a few.
#1 Cash Flow
With the right investment, the income generated from rent should be greater than the cost of the mortgage, taxes, insurance, property manager, and other expenses leaving you a profit of cash flow. Assuming your property cash flows every year, your tenants would potentially pay down your mortgage over time until you own the property without ever actually paying for it.
Would you like to receive money that you don’t trade your time for?
#2 Appreciation
Most real estate will appreciate over time. Depending on the location of the property, you gain this increase in value simply by owning the property which provides returns to you upon refinancing or sale of the property in the future.
#3 Leverage
A mortgage allows you to purchase a home with less money that the home costs.
You use the lender’s money to purchase the majority of the home, i.e. your leverage the lender’s money.
You are purchasing and owning 100% of a home while paying only a portion of the cost but gaining the benefits for the entire value of the home as the loan is paid off.
Using leverage in this way allows you the benefit of $100,000 to purchase 4 homes with $25,000 each and gain 4x the benefits versus purchasing one home outright for $100,000.
How do you use leverage to give you freedom?
#4 Depreciation
The greatest expense for most physicians during their lifetime is taxes.
Because of physicians' higher income rates, reduction of taxes is as important as increased earnings.
The government considers that a building or its physical contents will deteriorate over time. Those deteriorations can give you a credit in your taxes which is a paper loss called Depreciation.
This is why it’s valuable for doctors because their high incomes correlate to high taxes so whatever measure they can use to decrease their taxes allows them to make more money without working harder.
The benefits of tax strategies and real estate can be life changing for a hard working physician who pays higher and higher taxes as he works harder and earns more.
This strategy of real estate investments takes time. One house or investment at a time grows as these benefits compound over time.
It wasn’t until I learned more that I understood the value of real estate in my portfolio.
But first I had to break out of the medical mindset and expand my thinking. You can do the same. One hit at a time.
Are you ready to play ball? Would you like to learn more?
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