<figure id="attachment_394280" class="wp-caption aligncenter" style="width: 1999px;" aria-describedby="caption-attachment-394280"><a href="#" data-ident_hash="bd9de1be"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2024/10/3fdc5385cf021f74f486871ea660cc82.jpg" alt=""></a><figcaption id="caption-attachment-394280" class="wp-caption-text">Many doctors reportedly fail in real estate investment (photo is for illustration purposes / Photo Library).</figcaption></figure>
<h2>Why are they targeted? &#8220;Why do unscrupulous real estate agents go after doctors?&#8221;</h2>
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&#8217;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.
&#8220;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.&#8221;
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.
&#8220;From the moment doctors pass their national exams and become interns, they are referred to as &#8216;sensei&#8217; (teachers). It&#8217;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.&#8221;
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.
<div data-friday-nextpage-lead="He introduced the case of a doctor who actually went bankrupt with a real estate agent!"></div>
Why do doctors end up ruined by real estate investment?
X is a male internist in his 40s who graduated from a private university in the Tokyo metropolitan area. While the average annual income for internists is said to be around 12 million yen, he had been earning about 18 million yen through lectures and part-time work, but he had hit a ceiling. Due to the impact of reforms in doctors&#8217; working conditions, he could no longer increase his workload.
X was sending his three children to a private integrated elementary and junior high school, which required an annual tuition of 6 million yen. Considering that he would need to pay for their college education as well, he became anxious about his income of 18 million yen and decided to venture into real estate investment.
When he contacted a real estate company, a salesperson approached him and said, “If you purchase a property with a loan and use the monthly rent to cover your mortgage payments, your tax returns will be easier, and it will serve as insurance in case of emergencies.” As a result, he purchased a one-room apartment just three minutes from a station in Tokyo for 28 million yen.
In the first year, he received a tax deduction of only 180,000 yen, and in the second year, it was just 80,000 yen. Feeling that the benefits were minimal, X confronted the salesperson about the misleading information.
However, the salesperson advised him that if he purchased another property this year, he could save on taxes again. Although he was skeptical, he was encouraged by the fact that Dr. Z from the same hospital has purchased four properties, which led him to buy even more. By the time he made his fourth purchase, his total debt had ballooned to 130 million yen.
At that point, it became impossible for him to repay the loans solely through rental income and his income as a doctor. The properties he purchased were significantly overpriced, and he couldn’t sell them either. Even if he wanted to sue for being deceived, it would take an extremely long time, forcing him into bankruptcy.
There has been an increase in solicitations for investments targeting naive doctors like X. While it’s understandable that they seek higher income, it’s important for them to remember the roles expected of them as medical professionals.
 
<h2></h2>

 Internist TT

 Doctors are generally considered to be well paid. However, due to reforms in the way they work, they are now restricted from working part-time. This may be the reason why there is no end to the number of doctors who fail to invest in real estate.

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