Is Property a Good Investment for Doctors and Dentists
Many doctors and dentists prefer to invest in property. This might be due to the tax benefits and the ease with which you can finance the purchase of property.
However, all too often property investment and negative gearing is seen as the only avenue to create wealth, and quite often it is aggressively recommended by leading medical accounting and financial planning groups.
Do you know the saying ‘don’t put all your eggs…’?
It is our belief that there is a great amount of risk involved with just pursuing property investment. It leads to concentrated and illiquid portfolios, and a whole lot of debt!
Whenever there is a property bull market, like we saw on the East Coast, we always seems to think it is different this time, that the property bubble won’t burst …but it always does!
There are some signs of this already, as per the reports in the AFR newspaper of 4-5th August:
more than 50% of Millennial property investors are stressed by their finances;
property prices are falling and vacancies are increasing, rents are reducing as well;
over the next 5 years, $480 billion or a third of all home loans will be rolled over or converted to principal and interest.
Is all property investment bad? Not at all, but you should always make sure you pursue a well-diversified wealth creation plan.
If your adviser or accountant is advising you to keep purchasing more property and to take on ever more debt, beware!
You should ask yourself whether they are taking commissions/referral fees on the property purchase and associated loan, as well as any personal insurance policies you may require.
Don’t be afraid to seek a second opinion and get some advice. I would be happy to offer this to you free of charge.
Email me at email@example.com to book a time.