WCI #352: How to Reduce Capital Gains on Property Sales

Feb 1, 2024

Topics include reducing capital gains on property sales, buying a house during residency, shopping for a new car, buying into a practice, and tax tips. Different types of mortgages for doctors are discussed, including physician mortgages for young doctors and conventional mortgages for established doctors. The podcast also covers the tax implications of small businesses, the importance of contract review for investments, and the value of financial literacy and discipline.

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INSIGHT

Transaction Costs Make Short Holds Risky

Real estate needs time to overcome about 15% round-trip transaction costs to be profitable.
Owning less than about five years often won't let appreciation offset those costs.

ADVICE

Buy During Training Only As A Rental Investment

If you buy during training, evaluate it strictly as a rental investment rather than a place to live.
Convert only properties that meet rental criteria to avoid emotional mistakes and poor returns.

ANECDOTE

21-Month Wait For A Custom Truck

Dr. James Dahle ordered a truck in 2021 and waited 21 months to receive it.
He negotiated near-invoice price and was pleased despite the long wait.

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Today we are answering your questions. We talk about capital gains taxes when selling a vacation home, then get into the age old debate about if it is a good idea to buy a house during residency. Dr. Dahle gives advice on things to think about when you are shopping for a new car, then he gives ideas for things to think about when considering buying into a practice. Finally, we answer a few questions about taxes.

At some point in our financial lives, it will be time to buy a home. A physician mortgage can be a good vehicle for a young doctor who's just out of school and has a more effective place to use their money than on a big down payment. These loans allow doctors to secure a mortgage with fewer restrictions and a lower down payment than a conventional mortgage. But if you're further advanced in your career or deeper into your journey to financial freedom, buying a home with a conventional mortgage and then, later on, potentially refinancing that loan to a better rate with a shorter time frame could be a great move. Wherever you are in your financial journey, make sure you use the mortgage that will be most financially beneficial for you. Hop over to our recommended tab to learn more about all of your mortgage and refinancing options at https://whitecoatinvestor.com/mortgage

The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!

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