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"When I grow up I want to be a doctor. I'll make lots of money and I will help people." Do you remember that dream? Now after many years of school, you are working long hours to make payroll and rent or mortgage payments. You are helping people, but find it difficult because of insurance companies' control over your practice and your patients. How does a successful physician find time to help himself and reach his own goals?

Financial planners keep telling us to diversify. Adding real estate to your portfolio satisfies this good advice. You can even diversify in your real estate holdings by owning different types of properties, such as, retail property, office property, residential property or vacant land. Investing in the stock market is one way to diversify and plan for retirement. What happens when some sound bite or new economic trend devalues your stocks? There is a reason that banks don't lend money to buy stocks. Real Estate has attributes that make it a worthy investment. It is tangible. You can use it to accommodate your practice. You can lease it out to others and collect rent money. You can sell it for a profit. There are tax benefits such as depreciation that can save you money. You can't do that with the stock market.

If you are currently renting the space that you're using for your practice, you are paying off someone else's property. The money for rent goes away, forever. Think of the benefits realized by owning just the space that your practice occupies. You can write off the interest on your loan. Plus, the principle portion of the payment comes back to you at some point. You can sell the space and regain your principle plus appreciation. Another option is to borrow against the equity to reinvest into your business or into more real estate.

There are some unique tax benefits gained though property ownership. Depreciation is a method of writing off a portion of your building each year. Depreciation reduces your tax liability which means more money in your pocket. You can also write off building expenses and management expenses. These are only a few of many ways that real estate can help you keep more of the money that you've earned. Your CPA can advise you according to your unique situation. Real Estate professionals that specialize in investment property and your CPA can work together to find the appropriate situation to accomplish your financial goals.

Owning more than just the space your practice occupies multiplies the benefits. In this instance other people are contributing to your wealth. Money is earned without using your time, producing, collecting or managing staff.

Planning for retirement is easily accomplished when real estate is involved. Many options exist for creating monthly income or a lump sum of cash. A retiring physician can sell the practice with the real estate included. The proceeds from the sale can be reinvested into other investments that provide the necessary return to satisfy your retirement goals. If another property is purchased, under certain guidelines it may qualify as a 1031 exchange, which defers payment of the capital gains tax generated by the sale of the property. Another option as a retiring physician is to sell your practice with a lease for the building and collect the rent from the buyer of your practice. In this case, the buyer of your practice becomes your tenant. He is paying down your mortgage. The property builds equity through his payments and appreciation. Go home. Play golf. Spend time with your family. Your check will arrive in your mail box every month. At any time you have another asset to sell or borrow against the equity.

Whether you are planning for your future retirement or you just want a way to supplement your ever decreasing cash flow, real estate is a safe and effective vehicle which demands a minimal amount of your time. Owning real estate allows you to make more money, keep more money, and focus on helping people. When planning to invest in real estate make sure that you contact an experienced professional to ensure your financial success. After all, I would not want a lawyer to remove my gall bladder.


Marie Boyle is a Licensed Real Estate Broker with Palkiper Commercial Real Estate Services in Orlando. Contact

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