Adding real estate to your investment portfolio as a medical professional can be a wise decision. A survey conducted by the American Medical Association revealed that approximately 36% of doctors hold investment properties. This just demonstrates how commonplace real estate investing is among medical professionals. Physicians and other healthcare workers have started to develop side businesses in recent years in addition to their medical practices. Investing in real estate that generates money has become one of the popular trends. 

But instead of looking for other ways to increase your income, why not invest in real estate? Many doctors and healthcare professionals choose real estate investing over conventional investing strategies and other side gigs for six common reasons.

Elevated Profits


Real estate investment can yield exceptional profits, frequently at a significantly faster pace than 401(k) savings or stock market investments only.

Why does this occur? Because an investor can profit from real estate investments in several ways. These include appreciation (purchasing the property at the correct price, raising its worth through updates, raising rent, and paying off debt) and cash flow (what’s left over after all expenditures are covered).

When you total them, returns frequently surpass 20–30% annually or higher year after year.

Savings on taxes


Investing in real estate allows doctors to defer taxes on their passive income and, sometimes, even their W-2 income from the IRS. Tax savings can be achieved mainly by deducting depreciation from the asset, particularly in general multifamily and commercial real estate. 

Through a process known as a cost segregation analysis, the amortization of specific components of commercial properties, such as HVAC systems and water heaters, can be accelerated. You can deduct up to 60% of your investment in bonus depreciation in the first year of this research, which is currently scheduled for 2024!

In addition, you can deduct property taxes and operating costs for your property. Being passive investors saves them money on taxes, yields excellent profits, and frees up more time for them to pursue their passions.

Within the financial community, I’m a member of, it’s not uncommon to see doctors who invest in real estate annually save six figures in taxes.



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Simple to Understand


Real estate investing is simple to understand. Tenants (customers) need a place to live, the apartment block (product) is already built, and property managers, contractors, and other staff members are already trained. Finding, training, and ensuring staff is as important when starting a business as producing and promoting a product. Investors worldwide are already using and have established the systems necessary for real estate investing to scale. The real estate ownership and rental business model is already a tried-and-true route to financial independence and security.

Not reliant on the stock market


Most, if not all, of the extra money doctors are recommended to invest in 401(k)s for retirement is invested in the stock market. Placing all your eggs in one basket can lead to great worry, particularly in a bear market for stocks. Those who choose to have their money invested in real estate that is not immediately related to the financial markets are drawn to the chance to diversify through tangible property investments.

Real estate cycles are similar to the stock market, involving ups and downs. Diversifying your real estate portfolio among several markets and asset classes is wise. This reduces the possibility that your entire portfolio will be impacted at any given time.

In control


Most doctors want more control over their financial lives and careers because they feel like their medical practices are losing control over them. They take control of their destiny by investing in real estate. As a doctor, you are in charge of where your money goes when you invest in real estate, as opposed to depending on a financial advisor (who gets paid on transactions they make on your behalf rather than the performance of your account).