As a doctor, you’ve spent your life studying and working hard to become an expert in your field. You’ve worked long hours and sacrificed time with family and friends for years, but now that you’ve reached a certain point in your career, is it time to start thinking about how you’re going allocate the money that will no longer be spent on paying off student loans or funding medical practice expenses? At My Dr Wealth we focus on building wealth for Doctors with view of creating additional income streams to help with building wealth and financial freedom. If so, investment real estate might be an attractive option for your future income.
- The path to financial security begins with understanding tax implications about real estate investing (Negative gearing)
As a doctor, a high-income earner, your tax bill is one of your biggest expenses and you should try to minimise it, within the legal framework, as much as you can.
In Australia, the government gives you a tax break if you show a loss on your real estate investment. The interesting thing is that the loss doesn’t have to be a realised loss, meaning that you don’t need to lose money to claim the tax break. As per case study below:
John, is an anaesthetist working on a public job and also with private practice income. He earns $300,000 from his public job and $400,000 from his private practice. He will pay up to 47% in taxes, because he earns more than $180,000 per year.
John decides to buy an investment property to minimise his tax bill. He buys an investment property in Brisbane for $600,000. He then made a $60,000 deposit (10% of the property’s value).
His monthly repayments are as follows:
| Rental Income | $28,000.00 |
| Interest expenses (5.6% interest rate) | $30,240.00 |
| Agent Commission 7% | $1,960.00 |
| Advertising | $396.00 |
| Council Rates | $1,200.00 |
| Insurance | $310.00 |
| Other expenses | $1,900.00 |
| Total Expenses: $36,006.00 |
John’s total investment expenses for the year came to $36,006.00. He paid $8,006.00 more in expenses than what he earned in rental income.
By including a property depreciation amounting to $8,500.00, his property is negatively geared and he can use the $16,506.00 loss to reduce his taxable income – and by extension – reduce his tax bill.
| Net cash Flow | -$8,006.00 |
| Property Depreciation | -$8,500.00 |
| Total Negative Geared | $16,506.00 |
| Tax rebate (47%) | $7,757.82 |
| Net cost to maintain investment | -$248.18 |
Many medical professionals miss out on significant tax savings simply because they don’t submit a property depreciation report — a key tool in maximising your investment claims.
Negatively gearing an investment property can offer potential tax benefits, but it’s a complex financial strategy that requires careful consideration. It’s essential to seek expert advice before making any decisions.
Our specialist accountants work closely with healthcare professionals to evaluate the risks and opportunities of negative gearing. We’ll guide you through the entire process and help you develop a tailored strategy to support your long-term financial goals.
- Doctors can leverage real estate as a means to financial security
If you’re a doctor looking to build wealth, investing in real estate can help you do that.
Most real estate investment strategies allow the use of leverage through borrowing — earning returns while using someone else’s money.
The simple definition of leverage is “using debt to increase your returns.” Lending money from the best funders and loan products specific for the Doctors to help acquire more assets than they could otherwise afford.
Within these investment strategies we will always consider best yields and capital growth.
- Medical professionals can take control of their financial future and retirement from a property portfolio by investing in real estate.
There’s a lot of money to be made in real estate, whether you’re earning passive income with an investment property or building wealth with a portfolio of properties that help you reach your financial goals. It can also give you peace of mind that comes from knowing that no matter what happens to the economy or your career, you have assets in place to help provide for your family beyond what’s currently working out right now. Key is also income diversification to assist a better lifestyle with more flexibility and free time as we believe time is the greatest currency.
My Dr Wealth will help you
With the right tools and information, doctors can take control of their financial future. Real estate investing is one of the best ways for medical doctors to create passive income and build wealth
My Dr Wealth real estate investment strategies can include the review of existing property portfolios to determine the best way forward. In addition, we can examine existing mortgage debt and loan securitisation and recommend viable and beneficial alternatives.