Before we get into short-term rental investing we should address Physicians and finances in general.
As a Physician you have probably read that we are the “worst” investors and “bad” with money. On the other side, the ones that are “good” at the business side of Medicine are “in it for the wrong reasons”.
There are good arguments backing up both of these statements.
The classic storyline is that Physicians are financially illiterate because we spend 100% of our education focused on Medicine…. which is honorable and true for most curriculums. With that said, it also not wise in today’s world to not teach Physicians about finances.
Thankfully there are a lot of resources out there in the Physician finance world. For example, The Darwinian Doctor and The Prudent Plastic Surgeon.
On the opposite side of the spectrum is the stereotype that all Physicians have tons of money and drive fancy cars. Now there is some truth to this as Physicians in general have high salaries. However, that does not mean most Physicians are solely focused on the financial aspects of Medicine.
There is a fine line between Medicine and Finance. As a Physician your highest priority is to your patients and the finances second….
So how does one walk that financial tight rope?
Well, when it comes to Medicine…. The first step is to focus on the Medicine and usually the finances will follow. Don’t let the business aspect of Medicine cloud your Medical judgement.
Outside of Medicine the financial world plays by very different rules… Just watch the original Wall Street… Or Wolf of Wall Street, or the Wall Street Remake, The Big Short etc… you get the idea.
As Physicians we don’t have to play by the Wall Street eat your young rules. There are ways to ethically invest…
How does this relate to Short Term Rentals?
One way to ethically invest is to purchase short-term rentals…
Below are 5 reasons why short-term rental properties are great for Physicians
1. Physicians by their nature seek to help others
Short-Term Rental investing is a hospitality business. You are providing a service that people want. You get to provide joy to others by investing in great vacation homes and sharing them with the world. This completely aligns with the field of Medicine. Physicians by their nature want to help people…. So, in STR investing you get to “help” people have an awesome vacation.
2. Burnout
Burnout is a real problem in medicine and owning a retreat home to share with family and friends is one nice way to help get away. Time off and away from work helps to relieve symptoms of burnout. We can tell you that owning our 1st STR was one of the our best family decisions ever.
3. Masters of multi-tasking
You are a master at managing multiple situations at once and leading multiple teams. Managing a STR team is something you can handle. You manage multiple team members every day when caring for sick patients. Your teams consist of PAs, NPs, nurses, RT, PT, OT, dietitians and so forth.
Your Short-term rental property will have a team composed of a realtor and mortgage broker for acquisition followed by a handyman and cleaners for maintenance. You know how to keep track of multiple complex problems at once. The environment is definitely different but the skills are similar.
4. Cashflow
Physicians experience a significant amount of financial stress throughout their careers. Student loans and life style creep compound the stress. One way to relieve this stress is to increase cashflow outside of Medicine. Self-managing your own short-term rental properties is a great way to increase cashflow and provide financial stability. Depending on your market you can achieve cashflow from 60k to over 160k with just three properties. That is life changing. Not to leave Medicine but to simply diversify your income.
5. Taxes
By investing in short-term rental properties you can significantly decrease your taxable w-2 income. This can be achieved by combining a cost segregation study with bonus depreciation aka accelerated depreciation, allowing you to decrease your taxable income by hundreds of thousands. Click here to learn more…
In the end, Short-term rental investing is the perfect investment vehicle for Physicians. It aligns with the moral desire to help others and provide a service. You have all the skills to successfully manage a team and lastly the cashflow and tax savings are incredible.
Enjoy your Journey to Financial Freedom
I agree with these 100%! I’d also add that “lendability” is another factor. Most physicians have a reliable and high income that’s like catnip to lenders. This gives physicians an edge when applying for financing.