The most common question I am asked when someone finds out I managed my own real estate while I was a full-time general surgeon is: “How could you possibly have time to manage your rental real estate while being a full-time general surgeon? General surgery is a full-time job. It’s not possible to fit a second full-time job into your schedule.”
The thing is, managing real estate is not a full-time job. In fact, if you want, it can barely be classified as a job at all. The amount of time you put into managing your own real estate is totally up to you. You can choose to be responsible for a small piece of the management or choose to take on a big slice. I chose to do a small amount.
If you love doing odd jobs around your property, then you are free to do them. But if you are like me and have many more important things to do with your time, you should not be the person doing those little jobs. They should be automated, and I want to teach you how.
When doctors ask me about the amount of time required to manage a rental property, I often answer with a series of questions regarding their own medical office. Following are some of the questions I ask:
When the phone rings, do you answer it?
When a patient is ready to be put in a room, do you put them in the room?
Do you take the patient’s pulse, blood pressure, and temperature, and record them in their medical record?
After they have answered no to all my questions, then I ask:
Then what do you do? Why are you even on the payroll? What is your job?
The doctor should only be doing the parts that require his or her special expertise. Everything else in the office is done by someone else, not the doctor. That is the way it is in almost every business. The owner does not do everything.
If a doctor did all the little things that need to be done in a medical office, she could only see a few patients a day, which would not produce enough revenue to keep the doors open.
But for some reason, most people think that investment real estate property owners need to maintain their property single-handedly. I do not know how this idea got started, but I think it is based on the scarcity mindset, that there is not enough profit to hire help, so I must do everything myself. I need to squeeze every possible dollar out of this investment for it to be a good one.
Yet, we don’t apply that principle to the rest of our lives. Do you change the oil in your car, or do you pay someone to do that for you? You could save money by doing it yourself, but it will cost you time. People hire house cleaners, nannies, daycare services, gardeners, auto mechanics, and plumbers so they can spend their time doing what they desire.
Busy people do not have the time to do all the little things that others can do. Since we are all busy people, we only have the time to do what we are qualified to do.
Think about your real estate investments the same way you run your main business or job. Choose a few things that only you can do or that you like to do, and automate all the tasks.
When I was a full-time surgeon, I managed 64 rental units using about 10 to 15 hours a month of my time. That’s about 2 to 3 hours a week. And that was more time than was necessary, but I did the parts I enjoyed doing as a change of pace from my surgical practice. It was like a hobby to me. Some people play an instrument or garden or do some other hobby to break up the activities they do for a living and recharge their batteries. For me, it was tinkering at the apartments, but I did have other hobbies also.
Today I am retired from medicine, and we have retained ownership of 55 rental units. My wife and I like to travel, so we now have things set up, so I put in less than one hour a month on our real estate. Now I’m choosing to travel over using my apartments as a change of pace from my job. Our investment property is now fully automated, enabling us to travel whenever we wish and oversee the property from afar.
If you could fully automate your real estate investments, how many units could you own? An infinite number, I suspect. But if you needed to put two hours a month into each property you own, how many could you handle? You would quickly run out of time.
The reason to invest in real estate in the first place is to develop passive income. Income you earn that requires little or no ongoing effort.
During the summer of 2019, my wife and I walked the Camino de Santiago, a 450-mile hike across northern Spain. We spent two months with our cell phones on airplane mode during that trip, checking email in the evening when we could hook up to Wi-Fi. While we were off the grid, our real estate income kept getting deposited into the bank for us to spend. It doesn’t get more passive than that.
You can set up the systems that will automate the process of running a real estate empire so you can own as much of it as you want. The sky’s the limit. Your directly owned real estate income is unlimited. You can own one single-family rental house, or you can have a billion-dollar commercial real estate empire. However large you want to become, it will be so much easier to fit into your schedule when you automate everything and stop trying to do it yourself.
Spend your time in your main profession and with your family. Let the real estate investments take care of themselves.
Cory Fawcett is a general surgeon and can be reached at Financial Success MD. He is the author of The Doctors Guide to Starting Your Practice Right, The Doctors Guide to Eliminating Debt, and The Doctors Guide to Smart Career Alternatives and Retirement.
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