Defusing The Myths About Investing In Medical Office Real Estate
- Volume 21 - Issue 4 - April 2008
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Emphasizing The Value Of Good Debt
• Myth four: I do not want to be bogged down in debt. There is good debt and there is bad debt. Good debt is used to accrue assets that generate income, appreciate in value and provide passive income. Bad debt is tied up in assets that do not generate income and depreciate in value over time.
Physicians are notorious at spending their earned income on vacations, cars, big houses and expensive dinners. At the end of the day when you look at their balance sheets, they have poorly producing assets and a lot of liabilities. It is amazing how smart we are as doctors and yet most of us have been poorly trained at money management and investing. Without debt, it is physically impossible to create true wealth in a reasonable time period. Remember the term OPM (other people’s money). This is the real secret that makes most investors very wealthy.
Interest rates are very favorable now and this makes real estate investing for your practice quite affordable and practical. Granted, there are some parts of the country, such as Manhattan and Los Angeles, where it is very difficult to invest. However, this is not the case for the majority of us. Investing in real estate early in your career is key to your future wealth. Do not delay and wait until you have paid someone else’s mortgage for 20 years before making a move. You could conceivably pay off your building in 20 years.
Physicians spend the majority of their time treating patients, doing surgery and going to hospitals. This is great and part of our job but at the end of the day, the secret to long-term security for you and your family is building appreciable assets. Real estate investing should be your number one priority in this regard. There are so many available resources via books, brokers, mentors, seminars and other physicians.
What we do not learn in school we must learn after school. Educating yourself in the real estate arena can be one of your most valuable postgraduate educations. If you do not have time, work with someone you trust to help you develop your real estate portfolio. You would be surprised at how many of your colleagues are actively engaged or interested in real estate investing.
Dr. Helfman is the CEO and founder of the Village Podiatry Group in the Atlanta, Ga. area. He is also the founder of three physician-owned surgery centers and has developed ancillary models focusing on practice-owned MRI units and practice-owned pathology labs.