Being a pharmacist or healthcare professional is extremely rewarding, but medical burnout is real. And, whether you’re a registered nurse, urologist, or pharmacist, you probably don’t have a lot of free time to research the latest commodity crisis or tech IPO. Don’t let your lack of time create a lack of returns for your investment portfolio. The following information will discuss how pharmacists and other healthcare professionals can escape the rat race with passive real estate investments.
What is Real Estate Investing?
As you probably already know, real estate investing is the act of acquiring commercial or residential properties to obtain passive income. But you may not realize how many options you have for investing within this industry.
On a smaller scale, you can purchase a single-family home to rent out as you wait for the property to appreciate in value so you can sell. On a larger scale, you can invest in dozens of apartment buildings, condos, retail spaces, and even hotels.
Why Invest in Real Estate?
In short, real estate is a specific class of assets that is easy to understand and can help diversify your portfolio. Alone, real estate offers tax breaks, cash flow, equity building, a hedge against inflation, and competitive risk-adjusted returns. Hence, diversifying your portfolio with real estate is one of the most effective ways to lower volatility.
How Pharmacists and Healthcare Professionals can Escape the Rat Race with Passive Real Estate Investments
Now that we’ve discussed what real estate investing is and why you should do it, let’s take a closer look at real estate investment options and how to choose the one that’s right for you.
Residential Properties
Residential properties are a great first-time option, as the properties can be as large as a quadraplex or as small as a single-family home. Essentially, you buy the property and then either live in it or rent it out until the value appreciates.
As easy as this sounds, it can be challenging because not every property appreciates in value. To lower the odds of choosing a bad investment, it’s essential to research the property and the local neighborhood. Working with a real estate professional is often the easiest way to better understand the local area you want to target.
REIT (Real Estate Investment Trust)
As a pharmacist or doctor, you’re probably far too busy to invest sweat equity into your real estate investment. Buying into a REIT is among the easiest ways to invest in the real estate market because with REITs, you are not responsible for managing or maintaining the physical buildings.
A real estate investment trust is a company that owns real estate, including anything from apartment buildings, hotels, warehouses, and office buildings. Buying into a REIT is a bit like investing in a mutual fund, but the difference is you’re not investing in a stock; it’s real estate.
These trusts pay out a couple of ways: First, investors receive regular dividend payments. And second, if the REIT’s value increases, you can sell your share for a profit. REITs are usually listed on the stock exchange.
Commercial Properties
Commercial properties are among the most popular options for healthcare professionals investing in real estate. These properties include warehouses, office space, retail buildings, apartment complexes, hotels, and other industrial and mixed-use properties.
Investors are drawn to commercial real estate due to its high yield potential and historically strong performance. Perhaps the most significant benefit is that these properties are usually very simple to manage and can be even easier with triple net leases. There are a few variations among this lease type, but in short, the owner pays no expenses for the property, as the lessee takes care of everything from property taxes to maintenance expenses.
When you combine all of this with the cash flow that’s created and the tax benefits, you really can’t go wrong with commercial real estate investing.
The Bottom Line
Don’t waste too much of your precious time deciding which type of passive real estate investment to choose. If you’re looking for an easy way to get started, check out commercial real estate syndications. Syndications provide all the advantages of owning a commercial property, but all you do is contribute the capitaland then reap the benefits. Lastly, don’t go it alone! The most important part of this process is finding an operator that has a proven track record! Make sure you trust the team, and that you communicate your investment goals so that they can help you reach them.