Should Doctors and Dentists Invest in Real Estate?

The doctor's case

Should doctors invest in real estate?

Doctors can invest in real estate, but for most physicians it is optional, not required. A plain portfolio of three or four index funds can meet a physician's goals. A White Coat Investor guest post on evaluating syndications makes that point.

Private real estate earns a place only when the physician has time to judge a sponsor and money that can stay locked up for years. The physician also needs realistic expectations about taxes.

Three facts shape real estate investing for physicians more than for other high earners:

• Pay arrives late. Class of 2025 medical graduates who reported education debt owed a median of $215,000, according to the AAMC, before a single attending paycheck.
• Pay varies widely. Medscape's 2025 report put average physician pay at $374,000, and Doximity's 2026 report found surgical specialists earned 90.1% more than primary care physicians.
• Time is short. Physicians averaged 48.6 hours a week in 2019 to 2021, according to a JAMA Internal Medicine study reported by Medical Economics.

Those three facts decide when a doctor can invest, how much diligence is realistic, and which tax benefits are real.

Late pay, early debt

When can a new attending invest in private real estate?

A new attending can usually invest in private offerings only after two calendar years of income above $200,000. Most private real estate offerings are for accredited investors. The income test needs more than $200,000 in each of the two most recent years, plus a reasonable expectation of the same this year.

A big salary in year one does not qualify on its own, and the accredited investor requirements apply to the numbers, not the job title.

The waiting years are not wasted. Paying down debt and building savings move the net worth test closer. Public real estate investment trusts (REITs) and funds open to anyone remain available in the meantime.

Hours, not dollars

How do doctors invest in real estate without being landlords?

Doctors invest in real estate without being landlords as limited partners in a syndication or a private fund, like other passive real estate investors. The hours go into vetting before the deal, not into tenants after it. The physician puts in money and has no say in daily decisions.

Most of the remaining work comes at the start: reading the offering documents, a call with the sponsor and a background check. After that come K-1s each year and the occasional vote or capital call.

That front-loaded work is the part physicians skip, and it is the part that matters. White Coat Investor's podcast on vetting private real estate (March 4, 2021) puts the order as sponsor first, then the deal, then the market. It warns against choosing on headline internal rate of return (IRR).

Is a fund or a single syndication easier for a busy physician?

A fund asks a busy physician for fewer decisions than a single syndication. One investment buys a share of several properties, and you judge the manager's strategy and record instead of each building. Many funds are blind pools, raised before the properties are chosen.

A single syndication asks you to judge one property, one business plan and one sponsor every time. The guide to choosing a fund or a single syndication compares fees, minimums and liquidity.

Fund K-1s are not always simpler. A fund often waits on K-1s from the deals beneath it before it can send its own, which pushes delivery later.

Who checks the deal

Who checks the real estate deals pitched to doctors?

Doctors have to check real estate deals themselves. A platform's review, a colleague's tip or a sponsor's slide deck is a starting point, not diligence. White Coat Investor says plainly that a platform listing is not the same as checking a deal. Before you invest, ask the sponsor questions that fit a physician's situation.

1. How many hours a year will this need from me after funding, and will K-1s arrive after April 15?
2. Will this create passive losses I can actually use, given W-2 income and no real estate professional status?
3. Does the deal have healthcare tenants that add to the reimbursement risk my own practice already carries?
4. What happened to investors in your deals from 2022 to 2024: capital calls, paused distributions or losses?

A sponsor who will not answer is a reason to walk away, a point the White Coat Investor guest post makes too.

The W-2 tax wall

Can real estate losses offset a doctor's W-2 income?

Real estate losses usually cannot offset a doctor's W-2 income. Rental real estate is a passive activity under IRC 469, so its losses offset only passive income, and a physician's salary is not passive.

The $25,000 rental-loss allowance phases out between $100,000 and $150,000 of modified adjusted gross income and is not available to limited partners. Real estate professional status needs more than 750 hours a year and more than half of your working time in real estate. A full-time clinician cannot meet that.

Unused losses carry forward until you have passive income or sell the whole interest, as the K-1 guide's worked example shows.

Limited partners are generally barred from material participation. So a syndication loss usually stays passive, even in a household where someone qualifies as a real estate professional. High earners also owe the 3.8% net investment income tax on rental income and passive gains.

That tax applies once modified adjusted gross income passes $250,000 for joint filers ($200,000 single). The guides on whether K-1 losses offset W-2 income and on cost segregation and bonus depreciation go further. Your certified public accountant (CPA) can apply them to your return.

For dentists

Should a dentist buy the practice building?

A dentist who buys the practice building owns a one-tenant property whose tenant is the dentist's own practice. The usual setup is a separate limited liability company (LLC) that owns the building and leases it to the practice at fair market rent. That is a different bet from passive real estate in three ways.

• Your job, your tenant and your property sit in one place, so a bad year for the practice is a bad year for the building.
• Under the self-rental rule (Treas. Reg. 1.469-2(f)(6)), net rent your practice pays you is generally treated as nonpassive, so it cannot absorb passive losses from syndications.
• You are the landlord, with the repairs and decisions that come with it.

The numbers explain why the question comes up. The average general dentist earned $215,320 in 2025, according to the American Dental Association (ADA) Health Policy Institute. Inflation-adjusted pay for general dentists has fallen over 15 years, the institute found.

In 2024, practice owners earned $217,781 against $160,891 for nonowners, and dentists averaged about 36 hours a week, Dental Economics reported from ADA data.

Medical office buildings are a natural place for dentists and physicians to look, since they know the tenants. Those buildings add to the bet on healthcare reimbursement that a practice already carries. Judge them like any other deal. The guide to medical office buildings explains how they work.

Portfolio share

How much of a physician's portfolio goes into private real estate?

Private real estate has no set share in a physician's portfolio, because no rule sets one. Institutional investors' target allocation to real estate averaged 10.7% in 2025, according to the Hodes Weill and Cornell University survey (2025 edition). That figure describes pensions and endowments and is not advice for one household.

Minimums turn any share into a practical question. The median stated minimum was $50,000 in Relli's analysis of SEC Form D data. That covers 4,172 real estate offerings filed from October 1, 2025 to September 30, 2026. Spreading money across five offerings at that level takes $250,000, which is 10% of a $2.5 million portfolio. The guide to real estate in a stock-heavy portfolio covers the trade-offs.

Before you sign

What do physicians ask before a first real estate deal?