Let’s talk about rental real estate…
Should you purchase rental real estate as a nurse practitioner entrepreneur? Yes and no…
YES, if you have solid positive cash flow in your business and don’t need to reinvest anymore money back into your practice to grow it further.
NO, if your business is not generating a healthy income.
Listen, you will make FAR MORE MONEY in your business than you ever would with rental real estate. A typical single-family home MIGHT net you $300-500 a month if you have a mortgage on it and you put down 20%. If you are making more than $500, then consider yourself lucky because you found a good deal. Deals are hard to come by right now as people have gone insane with buying houses because of having a scarcity mindset. Interest rates will remain low for a long time, but that is another topic I will cover soon…
Rental real estate should be viewed as a diversification to your investments, not as a business (unless you want to build a 10+ rental portfolio or flip houses). A niche side practice should generate multiple thousands of dollars in profit a month within 12 months. For rental real estate to generate more than $3,000 a month in profit, you would have to have at least 4-6 properties or own a couple houses outright. At 20% down on each property, you are talking about a LARGE initial investment for little return. Typically, you need to have 15-20% down for investment properties. So, a $150,000 home would require about a $25,000 down payment. Hell, I can start two men’s health practices for that! And owning a couple houses outright would easily cost you $400,000 or more. I could open up a small empire of men’s health practices with that and make WAY MORE than $3,000 a month in profit…
So, view rental real estate as an INVESTMENT vs. a business. I own multiple rental properties because I want to diversify my investment portfolio, and not put all my money into my businesses or the stock market. Financial redundancy is the key to long-term financial security!
