Why Elite Physicians Are Being Scammed by Real Estate Companies

Why are they targeted? “Why do unscrupulous real estate agents go after doctors?”

In April 2024, a reform of work styles for physicians was implemented, which restricted part-time work for full-time doctors—an important source of income for them.

According to m3.com, one of Japan’s largest medical professional websites, this change has led to a reduction in income for about 30% of physicians. As a result, many full-time doctors are turning to investments in stocks and real estate to regain their previous income levels.

However, among these physicians, some have faced investment failures, accumulating debts and scrambling to repay them. Why are these supposedly intelligent doctors finding themselves in such difficult situations? I spoke with Dr. T, an internist living in Tokyo, and received an unexpected response.

“Most investment pitches that doctors receive are related to real estate, but many of the properties offered for physician-oriented real estate investments have values that are significantly disconnected from market prices. For example, I was almost convinced to buy a property worth 8 million yen for 15 million yen.

Last September, there was a case in the Tokyo District Court regarding a real estate investment targeting doctors, where a property valued at 6 million yen was sold for 10.8 million yen. Many doctors are naïve, and this is why there has been an increase in unscrupulous real estate companies targeting them.”

These companies lure doctors in with promises of tax-saving benefits linked to their high incomes. Their tactics are varied, with some unscrupulous businesses infiltrating medical conferences to directly solicit participants.

While it might seem easy to determine that these properties are being sold at 1.5 to 2 times their market value with a bit of research, many doctors still fall for these schemes. Dr. T expressed embarrassment as he explained why.

“From the moment doctors pass their national exams and become interns, they are referred to as ‘sensei’ (teachers). It’s also true that simply being a doctor often leads to being treated with undue admiration at social events and reunions. Because of this, some doctors become unable to seek advice from others.

Despite having no financial literacy, they are seduced by terms like passive income, insurance, and tax savings, and their pride prevents them from consulting others. Even after purchasing, when they hear that Dr. X owns four properties, they are easily tempted to follow suit. From the perspective of real estate companies, these doctors are easy targets.”

Dr. T recounted the case of Dr. X, who, lured by these real estate agents, purchased multiple properties but ultimately could not sell them, leading to bankruptcy.