Buy vs. Rent Home and Office for New Physician

[Trygve]

Life Situation:
Single, early 30s, no dependents, major US city. Currently in my final year of psychiatry residency (finishing July 2020), at which time my income will increase dramatically as I begin solo private practice. Trying to decide whether to continue renting or buy a house that is large enough and central enough to have a home office.

Gross Salary/Wages:
Current residency salary 65k/yr with benefits but see below.

Other Ordinary Income:
Moonlighting nights and weekends, average for the last 6 months is ~75k/yr which will continue until July 2020.

Adjusted Gross Income:
~140k/yr. However, I plan to begin a solo private practice upon finishing residency in July 2020 with estimated revenue ~300-500k/yr.

Taxes:
No state income tax, currently at 24% federal bracket and hopefully will touch 35% federal bracket for 2020.

Current expenses:
Rent/utilities: ~2050/mo, ~24.6k/yr (could probably find a 20% cheaper apartment but this is a very expensive city and it's not worth it to me at this time)
Food/dining: 600/mo, 7.2k/yr (mostly cooking, dine out occasionally and find this necessary given my social circumstance)
Additional professional training: 500/mo, 6k/yr (non-negotiable given how I'd like to practice)
Shopping: 250/mo, 3k/yr
Car expenses: 150/mo, 1.8k/yr
Gym: 69/mo, 828/yr
Total: ~44k/yr

Anticipated business expenses:
Malpractice, licensing, maintaining office furniture, etc.: 30-50k/yr (very difficult to anticipate and will likely change year-to-year)

Anticipated profit beginning July 2020:
250-450k/yr

Current assets pre-tax deductions:
403(b): 20k (100% VIVLX, maxed to match)
Roth IRA: 45k (100% VTSAX, maxed annually)
Taxable brokerage: 37k (100% VTSAX)
Total: 102k
Cash: 15k
Car: 2k
Parents: Could contribute a 200k down payment to a house

Liabilities:
Remaining med school debt: 20k (0% interest until graduation June 2020, at which time it will begin at 5% - I paid down the worse loans earlier)

Net Worth:
~100k (parents not included)

Specific Questions:
In my particular niche, a home office would be appropriate. This would have numerous financial benefits including: eliminating ~2000/mo office lease; eliminating friction and dead time associated with traveling to an office and having to sit there when I have gaps in my schedule; and allowing me to see more patients at random hours. Ideally, I would need a detached additional dwelling unit ("DADU") with a private entrance, waiting room, bathroom, and good soundproofing, though it may also be possible to do this in a basement ADU. I found a house that is absolutely perfect for this with both a DADU and a basement ADU, currently on the market for 985k, no HOA fees, 4k/yr insurance, taxes 10k/yr, unknown utilities. The basement unit could be rented separately for ~1.5k/mo. The rest of the space is more than enough for me being a single person. The obvious problem is the huge investment out of proportion to my wealth, which would heavily concentrate my assets toward debt and a single unit of real estate. I would likely be able to convince my parents to supply the 20% down payment if I was certain this was a good idea. This would be a significant investment for them. Using the rent vs. buy calculator from Khan Academy (attached), it is a bit of a tossup until you consider the office-lease-saving potential of a DADU (can simply plug in the rent as 4k/mo) and the income potential of the basement ADU, at which point there is a present value benefit of owning the home for 10yrs between 300-550k depending on speculative variables. Furthermore, I would likely be able to deduct some portion of my mortgage as a business expense (though this would apply to a regular office as well). In the likely event that I am not able to decide quickly enough to get this particular house, please help me create some price range and expected ADU rental parameters to more quickly make this decision in the future. If you feel renting is the better option, please provide some expected length of time or amount of capital saved until this is no longer the case.

*Note: I have no interest in getting opinions on the clinical/personal implications of seeing patients at a home office, or the interpersonal ramifications of getting a down payment from my parents. I am purely interested in the financial sensibility of this decision. If I were to buy this house, I am also interested in opinions on 30 vs. 15yr fixed mortgages in my situation.

Thank you for helping.

[soccerluvof4]

Just curious if you are in an Urban area? Reason I ask is because have you considered living above said office . Alot of towns like where I reside on the main drag the Doctor/Insurance agent /Dentist have a commercial front below and live upstairs as well as in some cases rent out other parts of the building. For me the closer you are to home but the farther you are with in it to work the better.

To answer your question from strictly a #'s point I think you should look at both Renting and owning and seeing which #'s workout the best for you. Depending on what you practice in your specialty patients will follow you within the area once you have established your reputation so I would focus on that as my highest priority for as little cost as I can. Taking in consideration that you have to have some sense of " Success" when people walk in the door.

Wish you the best on your hunt..!

[Villanelle]

Could *you* live in the cheaper basement unit until you've finished school and your practice is up and running?  So maybe 2 years  (or even just 1) of leasing out the main space, and then swap and move into the bigger space once your practice is well-established and making money?  And rent the ADAU or airBNB it for extra income until your start up your practice?

It's hard to give you more input without more information.  Would this be a loan from your parents, and if so, what would be the repayment terms?  How much could you rent the basement for?  (And if you are at all open to my plan above, how much could you rent the ADAU for, and the main unit?)  Is there any possibility of sharing the ADAU office space with someone else, perhaps a part time practitioner, so that while you can't take appointments on Tuesdays and Friday mornings, you get income from that other person, especially as you work to get your practice up and running?

To me, the uncomfortable part of this plan is that gap while you have the mortgage and other business expenses but don't have a robust practice yet.  That's why I'd look to rent the larger space until you are up and running, and to rent the ADAU until you finish school, and perhaps consider an office share (but being up front that if your practice takes off, it could be only a medium-term arrangement for the other person).

It seems like you could easily afford an $800k mortgage with basement rent income and $300k annual revenue.  But you could be setting yourself up for difficulties for the next year+, until all that happens. 

It does seem like you can afford this.  Whether or not it is the best option financially requires you to research the other options out there.  But it may also be that the best financial option isn't the best option for your life.  I can see why the convenience of working from literally your backyard would be with more than 100% optimizing the finances. 

[ysette9]

Is encourage you to read the White Coat Investor because his target audience is high income professionals, especially those who make a big jump in salary in a short period of time as you anticipate doing.

His advice is always to wait in home purchases a few years after you start making the big bucks. As he puts it, make sure your personal and professional life is stable. Make sure you like your job and your job likes you. Don’t buy counting on a salary you aren’t making yet.

[Trygve]

Just curious if you are in an Urban area? Reason I ask is because have you considered living above said office . Alot of towns like where I reside on the main drag the Doctor/Insurance agent /Dentist have a commercial front below and live upstairs as well as in some cases rent out other parts of the building. For me the closer you are to home but the farther you are with in it to work the better.

To answer your question from strictly a #'s point I think you should look at both Renting and owning and seeing which #'s workout the best for you. Depending on what you practice in your specialty patients will follow you within the area once you have established your reputation so I would focus on that as my highest priority for as little cost as I can. Taking in consideration that you have to have some sense of " Success" when people walk in the door.

Wish you the best on your hunt..!

Thanks for your reply. I do live in a very expensive urban area, but zoning restrictions favor large homes so those predominate at high cost. The reason I provided #s is to get others' assessments, as you can see I have already calculated net present value at 10yrs of home ownership. Of course if I were going to rent an office it would be best to do it as near to my home as possible, but I don't see myself living in a condo directly above my office. There would inevitably be some additional friction in commuting and opening/closing the office if I rented it, not to mention the limited control I would have over the space. The “success” aesthetic would be easier with a home office I think. I'm not worried about patients following me - when I graduate residency I will likely begin with an entirely new patient panel. However, I am well-positioned to get a large influx of referrals right when I finish residency and it would help to be clearly settled into a space at that time.

[Trygve]

Could *you* live in the cheaper basement unit until you've finished school and your practice is up and running?  So maybe 2 years  (or even just 1) of leasing out the main space, and then swap and move into the bigger space once your practice is well-established and making money?  And rent the ADAU or airBNB it for extra income until your start up your practice?

It's hard to give you more input without more information.  Would this be a loan from your parents, and if so, what would be the repayment terms?  How much could you rent the basement for?  (And if you are at all open to my plan above, how much could you rent the ADAU for, and the main unit?)  Is there any possibility of sharing the ADAU office space with someone else, perhaps a part time practitioner, so that while you can't take appointments on Tuesdays and Friday mornings, you get income from that other person, especially as you work to get your practice up and running?

To me, the uncomfortable part of this plan is that gap while you have the mortgage and other business expenses but don't have a robust practice yet.  That's why I'd look to rent the larger space until you are up and running, and to rent the ADAU until you finish school, and perhaps consider an office share (but being up front that if your practice takes off, it could be only a medium-term arrangement for the other person).

It seems like you could easily afford an $800k mortgage with basement rent income and $300k annual revenue.  But you could be setting yourself up for difficulties for the next year+, until all that happens. 

It does seem like you can afford this.  Whether or not it is the best option financially requires you to research the other options out there.  But it may also be that the best financial option isn't the best option for your life.  I can see why the convenience of working from literally your backyard would be with more than 100% optimizing the finances.

Thanks for your thoughtful message.
-I could definitely live in the basement apartment and rent out the nicer portion of the house for a year while I ensure the income potential of my practice.
-I estimate that the basement ADU would go for ~1400/mo, the DADU ~1600/mo, and the nicer portion of the house ~2800/mo, but I could be off.
-There is potential to lease the office space to other providers when I'm not using it by the day or even by the hour. I will have several colleagues who are interested in trying part-time private practices but don't necessarily want to commit to a full lease, much less owning.
-The down payment would be a gift from my parents, though I could also contribute about 50k if I liquidated by brokerage account. I am thinking about the impact of accepting such a large gift.
-I agree that the next year would be a strain as I get my practice up and running. As I mentioned in the reply above, there may be intangible benefits to a large upfront home office investment including 1) I will be positioned to get a large influx of referrals right when I finish residency and other providers will take me more seriously; 2) it would be good to have a permanent location so that I don't end up moving around on long-term patients over the coming years; 3) the aesthetic of a home office will likely be an additional asset in terms of marketing to patients and the demographic I attract.

[Trygve]

Is encourage you to read the White Coat Investor because his target audience is high income professionals, especially those who make a big jump in salary in a short period of time as you anticipate doing.

His advice is always to wait in home purchases a few years after you start making the big bucks. As he puts it, make sure your personal and professional life is stable. Make sure you like your job and your job likes you. Don’t buy counting on a salary you aren’t making yet.

I have read WCI and PoF extensively. Even if my private practice tanks (which it almost definitely will not), I have demonstrated my ability to make at least $150/hr on nights and weekends during this year, which is roughly equivalent to a 300k/yr revenue if I were to do this full time after residency. The fantastic thing about my profession is that it is possible to work by the hour and there is extremely high demand, so I can mix and match various moonlighting and private practice days until my private practice is built up enough to do that alone. As I tried to describe in the last two replies, there appear to be outsize benefits to a large investment in private practice up front, not to mention that the space would be rentable in multiple different ways if I decided not to do as much private practice. I worry that if I delayed it would be harder to make the switch later.

[Villanelle]

Could *you* live in the cheaper basement unit until you've finished school and your practice is up and running?  So maybe 2 years  (or even just 1) of leasing out the main space, and then swap and move into the bigger space once your practice is well-established and making money?  And rent the ADAU or airBNB it for extra income until your start up your practice?

It's hard to give you more input without more information.  Would this be a loan from your parents, and if so, what would be the repayment terms?  How much could you rent the basement for?  (And if you are at all open to my plan above, how much could you rent the ADAU for, and the main unit?)  Is there any possibility of sharing the ADAU office space with someone else, perhaps a part time practitioner, so that while you can't take appointments on Tuesdays and Friday mornings, you get income from that other person, especially as you work to get your practice up and running?

To me, the uncomfortable part of this plan is that gap while you have the mortgage and other business expenses but don't have a robust practice yet.  That's why I'd look to rent the larger space until you are up and running, and to rent the ADAU until you finish school, and perhaps consider an office share (but being up front that if your practice takes off, it could be only a medium-term arrangement for the other person).

It seems like you could easily afford an $800k mortgage with basement rent income and $300k annual revenue.  But you could be setting yourself up for difficulties for the next year+, until all that happens. 

It does seem like you can afford this.  Whether or not it is the best option financially requires you to research the other options out there.  But it may also be that the best financial option isn't the best option for your life.  I can see why the convenience of working from literally your backyard would be with more than 100% optimizing the finances.

Thanks for your thoughtful message.
-I could definitely live in the basement apartment and rent out the nicer portion of the house for a year while I ensure the income potential of my practice.
-I estimate that the basement ADU would go for ~1400/mo, the DADU ~1600/mo, and the nicer portion of the house ~2800/mo, but I could be off.
-There is potential to lease the office space to other providers when I'm not using it by the day or even by the hour. I will have several colleagues who are interested in trying part-time private practices but don't necessarily want to commit to a full lease, much less owning.
-The down payment would be a gift from my parents, though I could also contribute about 50k if I liquidated by brokerage account. I am thinking about the impact of accepting such a large gift.
-I agree that the next year would be a strain as I get my practice up and running. As I mentioned in the reply above, there may be intangible benefits to a large upfront home office investment including 1) I will be positioned to get a large influx of referrals right when I finish residency and other providers will take me more seriously; 2) it would be good to have a permanent location so that I don't end up moving around on long-term patients over the coming years; 3) the aesthetic of a home office will likely be an additional asset in terms of marketing to patients and the demographic I attract.

It's unlikely to tip the scales on a decision, but don't forget that there are tax implications for large gifts!

[SavinMaven]

Are you certain you want your home attached to your office? There are safety concerns in all areas of medicine, I am not saying this only because you are a psychiatrist. The vast majority of patients in all specialties are emotionally stable, but it only takes one to make your life a living hell. Many physicians take multiple steps to insulate their personal life from their professional one, including using pseudonyms on social media, delisting their home number from the phone book, not putting their name on their mailbox, etc.

[MrThatsDifferent]

Are you certain you want your home attached to your office? There are safety concerns in all areas of medicine, I am not saying this only because you are a psychiatrist. The vast majority of patients in all specialties are emotionally stable, but it only takes one to make your life a living hell. Many physicians take multiple steps to insulate their personal life from their professional one, including using pseudonyms on social media, delisting their home number from the phone book, not putting their name on their mailbox, etc.

This would seem like something to consider. Have you spoken to other practitioners who have the home/office set up and how they manage this? That would be helpful for you.

Also, I think you need a third option: buying a smaller place that you’re happy with and renting an office nearby. Then do the figures and pros/cons for the 3 options: 1. rent home, rent office; 2 buy home with office; and, 3 buy home, rent office

Speak to an accountant regarding those options so you get a good understanding of the various tax implications.

Lastly, at one point you mention your parents giving you the money as a gift, then you say it’s a significant investment for them. It’s wonderful that they have $200k to help you out. Considering your future income, you may want to consider structuring it as a no interest loan that you pay back, because you’re an adult with a promising career who can stand on his own. If you do that, you’ll feel guilty, with less pressure (there is a weight to anyone giving $200k),and you’ll remove the natural parent thing to hold that over your head, if/when, they want to. You get to maintain independence, while be humble for help along the way. Win/win. Just a thought...

[Trygve]

Are you certain you want your home attached to your office? There are safety concerns in all areas of medicine, I am not saying this only because you are a psychiatrist. The vast majority of patients in all specialties are emotionally stable, but it only takes one to make your life a living hell. Many physicians take multiple steps to insulate their personal life from their professional one, including using pseudonyms on social media, delisting their home number from the phone book, not putting their name on their mailbox, etc.

This would seem like something to consider. Have you spoken to other practitioners who have the home/office set up and how they manage this? That would be helpful for you.

Also, I think you need a third option: buying a smaller place that you’re happy with and renting an office nearby. Then do the figures and pros/cons for the 3 options: 1. rent home, rent office; 2 buy home with office; and, 3 buy home, rent office

Speak to an accountant regarding those options so you get a good understanding of the various tax implications.

Lastly, at one point you mention your parents giving you the money as a gift, then you say it’s a significant investment for them. It’s wonderful that they have $200k to help you out. Considering your future income, you may want to consider structuring it as a no interest loan that you pay back, because you’re an adult with a promising career who can stand on his own. If you do that, you’ll feel guilty, with less pressure (there is a weight to anyone giving $200k),and you’ll remove the natural parent thing to hold that over your head, if/when, they want to. You get to maintain independence, while be humble for help along the way. Win/win. Just a thought...

Blending a home and office is an important personal decision that I have thought extensively about for years. I have several colleagues who have done this and have only had good experiences. I am also in a particular niche of my field where a home office is more common. It will require that I am more selective about the patients I see. As I mentioned before, my field is great because I can work by the hour in multiple different jobs at once, and there is no shortage of demand. As I'm building my private practice I can cover the inpatient unit in the hospital over the weekend, work in the emergency room, etc., to fill the extra time.

I am considering buying a small home and renting an office nearby. However, it seems wasteful to have a lease on an office space that I may not use full-time (especially during the first year). One important calculation seems to be: what is the price difference between equivalent homes with and without DADUs, and would I be willing to buy an office near my house for that amount? It seems like the price difference is around 100k or less, for which I would definitely buy a freestanding office (small office buildings are minimum 500k in my area and very difficult to find). The equivalent office rental to my DADU would be 1.5-2k/mo, and if I don't use the DADU as an office I could rent it as an apartment for that much, which exceeds the 1% rule (though I'm not very knowledgable here). I would also be able to deduct some part of my mortgage as a business expense if it was my sole place of work. However, the problem with my calculation here is that it forces me to compare houses that are a minimum size large enough to have a DADU. Given that I'm single with no dependents I could technically live in a much smaller house - these seem to be going for about 600k - but this would obviate my ability to rent half the house. I am trying to work out the numbers on all these options.

Agreed that I need to develop a relationship with a good accountant.

Regarding the 200k from my parents, I agree that a no-interest loan would be superior for many reasons.

[Metalcat]

Speaking as a fellow medical professional, I STRONGLY advise against making long-term career and lifestyle decisions for yourself at this stage of the game.

Take some time, get to know yourself as a practicing professional, grow into your identity, leave space for new priorities to form and develop.

You're looking at major lifestyle decisions from a lense of what's "optimal" but from the perspective of student you.

Student you is a different person from professional you. Student you should not make major decisions for professional you, because I guarantee that professional you will have a much better sense of what's actually optimal moving forward.

Take this time to be as free as possible and give your professional self as much space as they need to become who they will become. Don't let student you box future professional you in to a predetermined version of yourself.

If my career, practice, and lifestyle had gone the way that new-grad Dr. Malkynn was certain I would want it to go, I would be utterly miserable right now. It's been shocking to me how wrong I was about where I would end up and how I would choose to work and live.

You may not change, your priorities may stay exactly the same, you may be right that your future self will be thrilled with these decisions...but maybe not.

Part of my career now is actually advising medical professionals on major financial/career/life decisions, and my advice for all new grads is to give themselves space for at least the first year.
I can tell you that nearly every single one of them significantly changed their goals and outlooks within that year, and I get A LOT of gratitude down the line for pushing them not to rush any major financial commitments early on.
No one ever says "I really wish I had limited my options sooner".

You are far more of an expert on human behaviour than I am, so you know I'm speaking basic common sense here.

Try to avoid letting your expertise give you the illusion that you somehow are above this. You are about to go through an enormous change in your life. You are about to retire from a very long career as a student. You are about to begin an entirely new professional life with an entirely new professional identity.

These are HUGE changes. Give yourself the space to experience them. Give yourself the space to become your new self without constraints. Open as many doors for yourself as possible, and let future you choose which ones to walk through. Accept that future you knows better than current you.

Those first few years are a wild ride, but it's a lot of fun if you go into it open minded with as few expectations as possible.

[ender]

I don't feel like you want advice.

It sounds like you have everything figured out already and want validation to buy this house, not advice. You want to buy this house, just buy it. If it ends up poorly and you take a $100k loss or something you'll have the income to recover, unless your career tanks for some reason.

Anyways, I do not know why you are looking to buy this house nearly a year in advance, too, that seems premature to me.

I would have a very hard time accepting $200k in interest free loans from my parents if I was going to start making $250k-$450k profit a year from my practice (I don't know if you mean "profit" or "revenue", but profit implies takehome pay after the business expenses to me, which means effectively your salary after paying all necessary business expenses - at the higher end of this, you easily could save the $200k in under a year). That income will literally save that money in 1 year. You can buy the house without that loan, whether by putting down less on the house in the first place or waiting barely 12 months.

All your objections are basically irrelevant from a financial perspective, too. Worrying about a large percentage of your net worth being tied up in real estate hardly matters if you are going to pull $450k profit from your business. You could pay this off in 5 years easily and then put $200k into investments a year for the next 5 years and quit working entirely.

One thing worth considering is you are currently single. If you have any plans/desires to change this, it may be worth asking others who have home practices how that generally is received by partners, especially if you have desires for children.

[Villanelle]

Re: a no interest loan, look into whether there would still be tax implications on a loan that. Assuming you pay the approved minimum interest and meet a few other qualifications, you'd be okay, but they would need to claim that interest as income. 

If there is no interest, then you have to claim the unpaid interest as income, and it can trigger gift limits as well.  IANALawyer or Accountant, but it is something of which to be aware. 

[lutorm]

Student you is a different person from professional you. Student you should not make major decisions for professional you, because I guarantee that professional you will have a much better sense of what's actually optimal moving forward.

Take this time to be as free as possible and give your professional self as much space as they need to become who they will become. Don't let student you box future professional you in to a predetermined version of yourself.

This sounds like extremely good advice to me.

[SavinMaven]

Blending a home and office is an important personal decision that I have thought extensively about for years. I have several colleagues who have done this and have only had good experiences.

If you have only spoken to those for whom this went well, you only have half the story. It would be wise to speak to someone who has not had a good experience to make a fully informed decision.

Malkynn has given you fantastic advice. You will thank yourself someday soon if you follow it. Good luck.

[ericrugiero]

It seems like from a pure money perspective if everything you think now is true the purchase is a good idea.  I do have one question - What's the rush?  Are you afraid this is the only property of it's kind?  That is the only reason I can see that you need to pull the trigger on this before you finish residency.  It might be worth it to take a hard look at how common or scarce this type of property is.  Don't put self imposed pressure on yourself that you might "lose" this particular property.  It's a common mistake to become emotionally invested in a particular piece of property before considering all options. 

I also have concerns regarding Malkynn's advice about your career goals changing as well as you taking such a large gift from your parents when you will soon be able to easily afford this on your own.  Do your parents have the resources to do this comfortably?  If not, I think you should wait and build up the down payment yourself over the next couple years. 

If they can easily afford the $200K gift, look into how they can define it as an "early inheritance".  I don't know much about it but my understanding is that it is tax free money now and it reduces the amount of tax free money you can receive at their death by however much you receive now. 

[freya]

There are many uncomfortable aspects to this plan, beyond Malkynn's excellent advice.

First, you won't be realizing that $250K+ net income right away.  It takes time to build a practice, as in at least a couple of years.  You'll also be dealing with a lot of startup expenses.  I think your priority right now should be to build up a cash stash to get you through that time, and also investigate personal loan sources as you may be needing them.  After you are making that foreseen income, THEN you can start thinking about buying.  You'll also have a much better sense of what you want.  Residency is a protected bubble in many ways, and you will likely have a much different perspective 2 years from now.

Second, the parental gift idea may not work out as well as you think.  If they give you $200K outright it will incur gift taxes.  If they simply make the downpayment for you, the bank will know about it (obviously).  Based on your income history and inability to make the down payment yourself, you are unlikely to qualify for a mortgage of the size you're contemplating unless your parents cosign for the loan and prove that they can carry it on their own.   Essentially, THEY would be buying the house.   You see, the bank doesn't care what you think you will make.  They only care about what you ARE making.  They will also discount your self-employment income by something like 25% because they know it can fluctuate.  I strongly suggest you talk to a mortgage loan officer to understand these nuances more.

(face-punch warning) Finally...we of course don't know your parents' circumstances, but the way you present the idea of the $200K gift is a bit entitled-sounding.  You're basically planning to live beyond your means at your parents' expense, and it may also change your relationship with your parents if you make yourself dependent on them.  Think about it.

[BlueHouse]

Check the tax situation for home offices and for renting from yourself.  I bought a big home with a home office because I thought I'd be able to deduct that entire office.  Turns out my corporate structure (S-Corp) didn't allow for home office deductions at all, so that significantly changed the cash flow equation. 

If there's a weWork or other office share near you, I'd look at that for the first 6 months to a year until you are settled in your career and your home.   

Congratulations!

[Dr Kidstache]

Another +1 for Malkynn's advice from another physician. Your predictions and assumptions are *extremely* rosy (even for someone who has essentially no medical school debt - way to go on that front!). Maybe you are the rare residency graduate who, 3-5 years down the line, is in the place that they expected at the end of residency. But that is very unusual. Medical practice is a far more fragile career than any of us anticipate when we're at your stage. All sorts of things can happen: sudden disability, a bad patient outcome, malpractice suits, medical board complaints. Honestly, you can't control any of those things and there's nothing that makes you uniquely invincible. Private solo practice makes you, in fact, much more vulnerable.
Go slowly, make sure that you are covered for the worst as much as you can by having robust disability and malpractice insurance, don't incur more debt than you can cover if you had to stop working unexpectedly, build a solo private practice over years not months.

[Metalcat]

Another +1 for Malkynn's advice from another physician. Your predictions and assumptions are *extremely* rosy (even for someone who has essentially no medical school debt - way to go on that front!). Maybe you are the rare residency graduate who, 3-5 years down the line, is in the place that they expected at the end of residency. But that is very unusual. Medical practice is a far more fragile career than any of us anticipate when we're at your stage. All sorts of things can happen: sudden disability, a bad patient outcome, malpractice suits, medical board complaints. Honestly, you can't control any of those things and there's nothing that makes you uniquely invincible. Private solo practice makes you, in fact, much more vulnerable.
Go slowly, make sure that you are covered for the worst as much as you can by having robust disability and malpractice insurance, don't incur more debt than you can cover if you had to stop working unexpectedly, build a solo private practice over years not months.

On the flip side of the same issue, I experienced massive instantaneous success at levels that I thought would take years to achieve, if at all. I was living the dream and within 3 years discovered that it wasn't making me happy. I'm so happy I didn't lock myself in with an equity partnership when I had the chance early on.