Here at Max Out of Pocket, we love passive income.
To keep things entertaining around here while we learn about maximizing our healthcare benefits and early retirement, we are running a little passive income experiment.
As I like to say, Max OOP is just your Average Joe Max with a questionable blogging career. So when I throw out intimidating lingo like ‘passive income’, keep that in mind. We can work our way through phrases like this together, and will even manage have some fun along the way. The primary focus of this personal finance blog is to learn about healthcare, but that doesn’t mean we can’t run a few entertaining side projects as we go.
Max OOP has been running an investment experiment of buying up medical office buildings. Since this is a financial blog with a focus on healthcare, I try to stick with what we know.
We are buying these buildings through a Healthcare REIT that owns over 250 buildings across the Unites States. As of today, the main objective of this experiment is to learn a few things about Healthcare REITS. A nice side benefit? This investment spits off dividends every three months. I like to consider this rental income that will fund Max OOP’s future healthcare expenses, particularly in early retirement. As of now, it is sending about
$1,000 $1,100 $1250 $1,340 in passive income my way annually.
Since Mr. and Mrs. Max OOP haven’t pulled the trigger on early retirement yet, we don’t have time to manage traditional rental houses. So we buy medical office buildings instead and let people who are actually talented at doing this take care of the managing. Hence the phrase, passive income.
If you need to catch up, all the posts are below.
- How I Bought a Medical Office Building – The Healthcare REIT Experiment
- Healthcare REIT Experiment – Yield, Conference Calls, and Expansion
- Healthcare REIT Experiment – Tenant Issues, FFO, $1000 Passive Income
- Healthcare REIT Experiment – How Does DOC Make Me Money?
- Healthcare REIT Experiment – Lunch Break
- REIT For Rent: Who Is Living In My Medical Office Buildings?
- $314.41 – Passive Healthcare REIT Income
I need to mention here, this is just a small portion of my overall portfolio so as of now diversification is not an issue for me. Also, Max OOP fully expects the value of this investment to come down when interest rates rise. Notice that isn’t an ‘if’ statement, it is a ‘when’ statement.
I also need to add my usual disclaimer – this is not a recommendation to buy a healthcare REIT or any stock. You need to do your own research and you are responsible for your own investing decisions.
As we move forward, I will aim to keep the portfolio and passive income updated monthly below. The numbers are as of 7/5/2019.
Remember, Max OOP is more interested in the passive dividend income than the overall capital appreciation (there’s another intimidating phrase). Most of the fields are self explanatory, but I thought I would point out that the cost basis includes the fidelity transaction fee, and the total gain includes dividends already paid.
Max Out of Pocket to put this portfolio together = about
$50 $55 $60 $65, and a few hours of my time. Enjoy!