Compounding Your Wealth | PPhREI Network Roundup | 9-30-2023

by The Darwinian Doctor

In this PPhREI Network Roundup, we discuss the pros and cons of self-management, the “cap rate” formula, and Dr. Frey’s compound interest scorecard.

This post may contain affiliate links.

Carpe Diem MD

There is a longstanding debate between real estate investors: is it worth it to self manage your rental property? On one side of the debate, you have (the majority) of investors who argue that self-management isn’t worth the time and effort. Yes, it can increase profitability, they say, but it also is enough of a deterrent that it limits growth.

On the other side of the debate, you have the investors that argue that self-management offers much more than profitability. It also offers greater control over your asset, which leads to happier tenants. Also, self-management can unlock special tax benefits, both for short term and long term rentals.

I’ve typically come down in favor of professional property management, with the exception of my short term rentals.

Read more about the debate on the Carpe Diem MD blog: Is Self-Managing Worth the Time and Effort?

The Darwinian Doctor

In this recent post, I introduced the outsized effect expense management can have on the valuation of multifamily residential real estate. Since multifamily valuation is typically governed by the “cap rate” formula, saving just $1000 in expenses can magnify the worth of an apartment building by $10-20k.

I explain this phenomenon in my post, with real numbers from my 7 unit building in Indianapolis.

Read the entire post on the Darwinian Doctor blog: $44k Net Worth Gain in 10 Minutes with 1 Email

The Prudent Plastic Surgeon

Compound interest has been described as the “eighth wonder of the world.” It’s a common topic amongst personal finance writers because of the way that it can apply to your wealth. The trick, of course, is that you have to invest in assets that actually take advantage of it.

Gold, for example, will never compound. But stocks and real estate will compound over time and lead to exponential wealth growth.

In this post, Dr. Frey explores this concept as it applies to his own wealth growth.

Read the entire post on the Prudent Plastic Surgeon blog: One Doctor’s Compound Interest Scorecard

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Since everyone is different, it may not be appropriate to generalize my doctorly advice to your own situation. Please run all medical, life, and financial advice by your own physician or financial professionals before applying it to your own life! Consider all information for your entertainment only!

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