I’ve spent years focusing on medicine, but I also know that financial security is just as important as patient care. Real estate is a great way to build wealth, but who has time to deal with tenants and maintenance calls? That’s where REITs come in. If you’ve ever wondered, what is a REIT, think of it as a way to invest in real estate without the headaches. As a physician, I want my money working for me even when I’m in the hospital. Let’s break down how REITs can help you build wealth while focusing on your career.

How REITs Work

REITs (Real Estate Investment Trusts) own or finance income-generating properties. These could be hospitals, medical offices, apartment buildings, or even shopping centers. Instead of buying a single rental property, you own a small part of a much larger portfolio.

I remember the first time I seriously looked into buying a rental property. The numbers looked great on paper, but when I thought about dealing with tenants, late-night calls about plumbing issues, and unexpected repairs, I realized I just didn’t have the time. That’s when I started looking into REITs.

The best part? REITs are required to distribute at least 90% of their income to investors. That means regular dividend payouts, making them a favorite for passive income seekers in addition to other streams like HYSAs and HSAs.

Types of REITs

Not all REITs are the same. Here are the main ones:

• Equity REITs own and rent out properties. They make money from rent.
• Mortgage REITs invest in real estate loans. They make money from interest.
• Hybrid REITs mix both approaches.

If you are a busy healthcare professional, REITs offer an easy way to invest in real estate without being on call for home repairs.

Healthcare REITs and Other Options

Some REITs specialize in healthcare properties. This makes sense since medical facilities are always in demand. Here are a few types worth considering:

• Healthcare REITs own hospitals, senior housing, and medical offices.
• Residential REITs invest in apartment buildings and rental homes.
• Office REITs include corporate and medical office spaces.
• Retail REITs own shopping centers, which often have pharmacies and healthcare clinics.

Healthcare REITs can be a solid choice since people always need medical care, no matter what’s happening in the economy.

Why REITs Work for Healthcare Professionals

Between long shifts and patient care, managing property is probably the last thing you want to deal with. REITs let you invest in real estate without worrying about tenants, repairs, or market timing. You can buy and sell shares easily, unlike trying to sell a house.

A friend of mine, also a physician, bought a rental property, thinking it would be a great way to build passive income. But between shifts, paperwork, and family time, he barely had a moment to deal with maintenance issues. Eventually, he sold it and switched to REITs instead. That stuck with me because who has time to be a landlord while working in healthcare?

Another plus? Real estate tends to appreciate over time, and rental income helps fight inflation.

Potential Risks

Of course, no investment is risk-free. REITs are traded on the stock market, so their value can rise and fall. Interest rate changes can also impact their profitability. Some REITs are better managed than others, so doing a little homework before investing is smart. Also, keep in mind that REIT dividends are taxed as regular income, which might affect your tax bill.

How to Invest in REITs

Getting started is easier than you might think. Here are a few ways:

1. Buy Public REITs through a brokerage account like any stock.
2. Invest in REIT Funds with mutual funds or ETFs that hold multiple REITs.
3. Use a Retirement Account since some 401(k)s and IRAs include REITs.
4. Consider Private REITs, but these are less liquid and require more research. I use Fundrise and could not be happier with my experience with the platform.

Top Healthcare REITs to Check Out

If you want to focus on healthcare, here are a few big names in the space:

• Welltower (WELL) focuses on senior housing and medical centers.
• Ventas (VTR) owns hospitals and research facilities.
• Healthpeak Properties (PEAK) invests in medical offices and life sciences buildings.

Bottom Line

So what is a REIT? It makes real estate investing simple. For healthcare professionals, they provide a way to grow wealth without adding extra stress. If you are considering REITs, take some time to research and see if they align with your financial goals.