When retirement looms for physicians, it may be time to consider a reexamination of real estate holdings, depending on the circumstances, the American Medical Association reported Nov. 10.
Many older physicians may have invested in real estate throughout the years, whether in private practice space, a primary residence or a vacation home. Tal Frank, the president of PhysicianLoans, a specialized home loan provider, spoke to the AMA about how to navigate real estate when approaching retirement.
1. Consider timing and value.
Mr. Frank advises real estate holders to carefully consider whether their property has reached peak appreciation. He also says that the current market offers an excellent opportunity for sellers.
2. Plan ahead.
If physicians are planning to relocate and buy property in another location upon retirement, Mr. Frank recommends meeting with a real estate agent in the area in the three years prior to the move. That way, physicians can be protected from potential surprises.
3. Decide whether to keep playing the game.
When winding down, getting cash and increasing investments may not be for everyone. Mr. Frank explains, "You earn it to use it, and many physicians have invested over the years to use their profit for their own benefit or enjoyment."
4. Do you want to keep being a landlord?
If retiring and relocating, consider whether you want to be an out-of-state landlord. Owning a commercial property may require more energy and time than anticipated, so consider selling it. If necessary, physicians can always lease back the property.
5. Balance costs.
Mr. Frank recommends reassessing seriously how much money a property would give retiring physicians and balance that against the cost of upkeep and retaining the property.
"The lifestyle you imagine at retirement could easily be more expensive than your lifestyle during your working years. That may be a reason to unload the asset and cash out," said Mr. Frank.