Share




Is Real Estate Investment Trusts a Good Career Path?


April 16, 2021

Harsha Moole, M.D., MBBS


Is Real Estate Investment Trusts a good career path? Are you wondering if real estate investment trust (REIT) is good enough to consider as a career path? Is real estate investment trust worth the buzz? Or is it just another over-hyped investment? Can I build a solid financial foundation as a doctor by investing in real estate investment trust? Rest easy because you are not alone.

These questions have cropped up in the minds of so many others as they begin to consider the possibility of following a career path in real estate investment trust. This among so any other questions will be answered in this article to enable you to make the right decision. So let’s dive in.

What are Real Estate Investment Trusts?

Real Estate Investment Trusts are real estate companies having ownership and operating real estate properties. REITs make it possible for investors to become real estate property owners with claims to regular dividends on those properties. The management of the property is the sole responsibility of the REITs.

REIT has become a vital part of the economy of the United States of America as it has allowed a wide range of people to benefit from real estate investing with little or no knowledge.

REITs make it possible for investors to invest in real estate portfolios by buying stocks. Investors in REIT earn dividends from the proceeds the company made from investing without having to get involved directly. This makes REIT very convenient and ideal for doctors as it is a source of passive income and does not require direct physical involvement.

A REIT operates like a mutual fund as different investors pool their funds together and buy blocks of shares in real estate and are paid dividends based on the value of the shares. In the US, the law provides for the payment of 90% dividends by REIT companies to investors from the proceeds made. Individuals can therefore earn passive income from real estate, free from the hassles of getting actively involved.

Benefits of REIT for Doctors | Is Real Estate Investment Trusts a Good Career Path for Doctors?

The question at hand is “is Real Estate Investment Trusts a good career path?” There are many benefits attached to real estate investment funds that make it preferred over other investments. Doctors can also tap from these benefits.

  • REIT pay higher dividends:  Real estate investment trust pay 90% of their annual income as dividends to the investors. This is considerably high when compared with other investments. With a good number of shares in REIT, you can make a decent passive income from such investment.
  • It doesn’t require the active participation of the investors: It is common knowledge that doctors are known to be very busy people because of the demands of their job. You may not have the time to check out different stocks and investment opportunities. Investing in REIT means placing your money into the hands of a company that is already experienced in the market. This reduces the pressure associated with managing an investment portfolio with little or no knowledge.
  • Operates a straightforward business model: The business model employed by REIT is understandable and uncomplicated. You don’t need to have a degree in finance or be a guru in investing to understand it. This makes it ideal for doctors especially the ones testing the investment waters.
  • Returns through appreciation: Commercial real estate in the US have witnessed a steady rise in value over time. This is good news for investors because appreciation in value means higher dividends will be paid to investors. Fluctuations as a result of inflation don’t have many effects on commercial real estate so there won’t most likely, be a decline in the dividend paid.
  • Not very volatile: Commercial real estate experiences lower volatility than other stocks. This makes it a better stable form of investment than other forms. There is also a low correlation between REIT and other stocks. This makes it difficult for changes in those stocks to have much impact on them.

Is Real Estate Investment Trusts a Good Career Path?

Reasons Why Doctors in the USA Should Invest in REIT

There are different kinds of investment options that doctors in the USA can take advantage of but why REIT? Branching out into this investment option can be for so many reasons. Consider the ones below:

  • Time Constraint: As a doctor, you may not have the time to fully manage your property if you decide to buy them. Which makes REIT your best option. Investing in REIT is like sitting back to enjoy your dividends while someone else does all the work.
  • Insufficient knowledge of the market: As a doctor, you may not have the time to source information and get knowledgeable about real estate. You may want to spend the little time you have outside work with family and loved ones and not trying to get information to make investment decisions. When you invest in REIT, you allow industry experts to make investment decisions while you get dividends. It’s a win-win situation.
  • Diversification: A large part if not all your retirement accounts (401k inclusive) are out there in the stock market. Therefore, investing in Real Estate Investment Trust is a very good way of diversifying your investment and minimizing risks.

Why is REIT a Good Career Path for Doctors in the Long Run?

1. Dividends are guaranteed.

Not only does REIT pay high dividends, but your payout is also guaranteed and covered by US laws. REIT must pay out nothing less than 90% of total income to investors as dividends. This amount can be higher but will not go lower than 90%.

2. Makes investing in real estate hassle-free.

Instead of buying blocks of flats and going through so much paperwork before you can resell them, REIT offers you the opportunity to earn dividends by buying shares. If at any point in time you feel you do not want to continue, you can easily it off.

3. The minimum amount for investment is low.

Even if you are paying off debt or have other financial commitments, you do not need a huge amount of money to start. You can start with what you have and buy more shares as time progresses.

4. A form of passive investment.

Maybe you are considering branching into other businesses or even opening a private practice some time. With REIT, you wouldn’t have to bother about managing both businesses because it does not require you to be directly involved in any way.

5. Very Liquid.

Selling of REIT is pretty easy, unlike traditional real estate. It may take time to sell off a house, but with REIT, you can easily sell your share if you feel it isn’t the right thing for you.

Is Investing in International REIT a Good Option?

Going beyond the borders of the United States of America to invest in your investment may not be a bad idea as it will help you diversify. You will also gain some level of exposure to real estate in other countries without buying properties overseas. However, your span of control over such investment is limited.

Also, because it is overseas, the law guiding the operations of REIT may be slightly different from what is obtainable in the USA. If you however decide to buy a REITs, decide on the method to apply. You may buy from the foreign exchange market or directly invest. Whichever one you choose, ensure you get your facts right before you proceed.

Final Thoughts | Is Real Estate Investment Trusts a Good Career Path?

Real estate is a prising way to invest in the long term. You don’t have to wait to amass so much wealth before investing in real estate. REIT has simplified the process for you. You can maximize REITs as a source of passive income while gaining exposure to how the real estate market works. It is also a reliable way of diversifying your investments.

 

Here at PhysicianEstate, we welcome all physician entrepreneurs to learn about commercial real estate investments, rental property investments, and wealth generation. We encourage all physicians to eventually become real estate physician investors. We know a great deal about Who – What – Why – How. 

Stay in touch with us by signing up for our newsletter. The newsletter will keep you up to speed on the current real estate investments we are looking at, provide physicians with investment opportunities, and much more.  

Legal Disclaimer: This is not investment advice. I am not a legal and/or investment advisor. This is my personal blog, and all information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. These are my views, it is not a production of my employer, nor is it affiliated with any broker/dealer or registered investment advisor. While the information provided is believed to be accurate, it may include errors or inaccuracies. To the maximum extent permitted by law, PhysicianEstate disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. You should consult with an attorney or other professional to determine what may be best for your individual needs. Your use of the information on the website or materials linked from the Web is at your own risk. 

Don't forget to share this post! Sharing is caring.


Authored by Harsha Moole, M.D., MBBS

Hey there! I hope you enjoyed reading this blog. PhysicianEstate is my brain child and passion project. I run this platform to empower entrepreneurially motivated physicians to make financially educated investment decisions and discuss asset protection strategies. Lots of important but free content here and here! If you have any questions or if you are interested in partnering with me, let’s connect! hmoole@physicianestate.com

No Comments

Comment

Comment as guest

Subscribe to Our Newsletter