By Tom Burns, Presario Co-Founder
Our goal at Presario Ventures is to be wealth makers for our investors. One of the ways we can help them grow their portfolios is by providing educational events that will give them some of the tools they will need to make sound decisions.
We recently hosted an event designed specifically for physicians, a group with a unique set of attributes and challenges. While most doctors are driven, successful, and have fulfilling careers, most are also facing increasing demands on their time, increasing expenses, decreasing reimbursement, litigation, and legislative interference. With so little time and a relentlessly decaying income, outside investment and a passive income is an attractive option. As a former surgeon, that’s something I understand well.
Commercial Real Estate As Passive Income
There are multiple vehicles that can produce income that is not correlated with the medical industry. The challenge for physicians is the time required to start a business outside of their practice. The beauty of real estate is that it can be managed in parallel with a the demands of a busy doctor and in that sense is a passive income.
I remember vividly a presentation by a financial manager that I attended during my last year of his medical training. He told me I should make a lot of money, buy a big house, and turn the rest over to a financial manager. I figured that if I reached retirement age I would have to live below my means and pray the money didn’t run out before I did.
Most people who are in a position to consider growing a wealth portfolio are taught the same thing. And while stocks and bonds can be an important part of the plan for some people, I would caution against making it the only part. Dollar purchasing power has declined for the past 100 years. Hard assets, like real estate, retain their inherent value and thus, are a hedge against inflation.
Real estate investment is a particularly attractive portfolio builder for medical professionals, because investors can dedicate as much time as they desire, and explore investments alone or with partners. It’s also a passive income stream that will be there whether you work or not.
In the multifamily sector, Presario’s primary focus, occupancy has been steady, with forecasters predicting persistent demand over the next decade, thanks in part to Millennials. The National Multifamily Housing Council expects the need in Austin, Dallas, and Houston to be especially significant.
We ended the presentation by reviewing some of Presario’s investments in action and answering questions.