Investing in Real Estate during Medical School

[SandyPants]

I am an incoming medical student who has saved some money during my gap years after undergrad. I was wondering if investing in a small apartment building (6-10 tenants) would be a bad idea during medical school. Having crunched some numbers, renting a few units out would likely allow me to graduate debt free. However, my biggest concern would be balancing school work and the responsibilities of becoming a small time landlord. Anyone with experience or advice would be great!

---

Members don't see this ad.

 

[pstrick]

You could buy an apartment building, then pay a management company to worry about all the landlord stuff.

It would be a lot less stressful to just put that money toward tuition and focus on school. (Can you really buy an apartment building for less than 300k?)

 

[NuttyEngDude]

Just dont let the management issues interrupt or ruin your study time or practices. Imagine if a little was put into bitcoin the past few years (ie. gambling).

 

[oncology2020]

You could buy an apartment building, then pay a management company to worry about all the landlord stuff.

It would be a lot less stressful to just put that money toward tuition and focus on school. (Can you really buy an apartment building for less than 300k?)

Just be careful, there are a lot of hidden expenses especially in an apartment building. What you going to do if the furnace breaks or a water pipe bursts? Those can costs several sometime tens of thousands of dollars in expenses. If you're not able to pay these expenses you'll rack up debt, ruin your credit and then may not even have good enough credit to secure a loan to pay for medical school. I've seen people having to file bankruptcy due to bad real estate investments.

If you have extra cash even after you purchase the property and have some back up support (i.e. parents) if things go sour then yes definitely worth the risk. Just do your due diligence before hand and make sure you hire a couple of inspectors to do a thorough inspection of the property before finalizing a large investment like that.

 

[SandyPants]

You could buy an apartment building, then pay a management company to worry about all the landlord stuff.

It would be a lot less stressful to just put that money toward tuition and focus on school. (Can you really buy an apartment building for less than 300k?)

So with my current financial situation, I would likely be looking at around 100-200k of debt depending on if I decide on a public vs. private school. I was actually surprised how inexpensive some smaller buildings with 3-4 units are.

 

[SandyPants]

Just be careful, there are a lot of hidden expenses especially in an apartment building. What you going to do if the furnace breaks or a water pipe bursts? Those can costs several sometime tens of thousands of dollars in expenses. If you're not able to pay these expenses you'll rack up debt, ruin your credit and then may not even have good enough credit to secure a loan to pay for medical school. I've seen people having to file bankruptcy due to bad real estate investments.

If you have extra cash even after you purchase the property and have some back up support (i.e. parents) if things go sour then yes definitely worth the risk. Just do your due diligence before hand and make sure you hire a couple of inspectors to do a thorough inspection of the property before finalizing a large investment like that.

Thanks! This was very helpful, I do have a decent safety net that would be able to resolve some catastrophe. I would likely live on site to deal with emergencies as well. I'm not dead set on this idea so I would definitely need a perfect property to invest in.

 

[Obnoxious Dad]

I am an incoming medical student who has saved some money during my gap years after undergrad. I was wondering if investing in a small apartment building (6-10 tenants) would be a bad idea during medical school. Having crunched some numbers, renting a few units out would likely allow me to graduate debt free. However, my biggest concern would be balancing school work and the responsibilities of becoming a small time landlord. Anyone with experience or advice would be great!

OP, this is a terrible idea. As a CPA I have had lots of clients who have owned rental real estate. Owning an apartment building is a time sink. You will have dead beat tenants who won't pay and won't leave. You will have to go to court to get them evicted. Some will absolutely destroy the place. It's a nasty business.

You will have to either make repairs yourself or have them made by people who will soak you. Are you a capable carpenter or electrician? How are your plumbing skills? Do you enjoy painting? Are you a good accountant? Do you want to spend time keeping track of rental income and expenses.

Your first order of business is succeeding in medical school. A flood or roach infestation will not be an excuse for screwing up an exam or performing poorly in a clinical rotation. Don't buy an apartment building!!

 

[NuttyEngDude]

I am going to reiterate obnoxious dad's advice. It doesnt sound like you have much experience in this area and are underestimating the time it will require to manage a property. You would therefore be trying to learn this while also trying to learn how to study and also how to manage the workloads of medical school. This is not a recipe for success.

 

[Terry Toma]

As someone who has worked in real estate development, I wouldn't take on real estate as a new hobby/side gig during school. Real estate is a learn-by-doing kind of field. It will take a lot of your time at first while you're bumbling though figuring things out for the first time, and you're guaranteed to make at least a few mistakes of varying proportions.

If you were already a landlord with some experience, continuing with that gig through school might be doable. But I wouldn't try to learn the business while in school.

That said, third party management might make it doable if the property can support the fees and you're willing to take on the expense.

 

[intubesteak]

Just use your money to graduate debt free. That's a 7% return on your investment right there with zero risk.

 

[DrfluffyMD]

Like the above poster said, hard to find any investment with return higher than graduating debt free.

 

[Microbug]

We own a house that is 3 units, and like others said, it’s a huge time sink and SO STRESSFUL. Some tenants call you just because they clogged their toilets. Other will demand you to be there with people to fix any issue immediately. Some are unhappy with neighbors. I don’t recommend having this extra stress on yourself during med school. Just put it to your tuition.

 

[Localnative]

I am an incoming medical student who has saved some money during my gap years after undergrad. I was wondering if investing in a small apartment building (6-10 tenants) would be a bad idea during medical school. Having crunched some numbers, renting a few units out would likely allow me to graduate debt free. However, my biggest concern would be balancing school work and the responsibilities of becoming a small time landlord. Anyone with experience or advice would be great!

Forget that time suck - take the cash, read the Intelligent Investor by Ben Graham, and open an online brokerage acct. Stick to those principles and start your nest egg - safe and steady returns win the race.

 

[Goro]

I am an incoming medical student who has saved some money during my gap years after undergrad. I was wondering if investing in a small apartment building (6-10 tenants) would be a bad idea during medical school. Having crunched some numbers, renting a few units out would likely allow me to graduate debt free. However, my biggest concern would be balancing school work and the responsibilities of becoming a small time landlord. Anyone with experience or advice would be great!

Having been a landlord myself one, just make sure you get a really, really, really good mgt company, because you're be surprised how destructive tenants can be. And stupid, too...as is. what part of "no dogs didn't you understand?"

Avoid Section 8 tenants like the plague.

 

[kb1900]

I think it’s fine if you an afford a management company to minimize your time involved.