For many practices, one of the largest expenses is the medical office space, likely second only to payroll. Clearly, we are seeing a trend that those costs continue to rise with less vacancy and increased demand for medical space.
Perhaps it makes to strongly consider owning the space which drives value to the practice. One of best potential assets a Physician can own is the office that they conduct their practice and deliver care to patients. Over time, property values can increase to be worth more than the practice itself.
Owning real estate holds numerous advantages:
- Long term practice stability
- Physical and operational control
- Tax advantages
- Wealth Building (retirement asset)
- Potential Passive cash flow at retirement
Additionally, owning real estate serves as a hedge against inflation. As inflation rises, so do property values and rental income, helping to preserve wealth and purchasing power.
During the ownership period there are distinct tax advantages. Owners often benefit from deductions on mortgage interest, property taxes, and certain expenses related to property maintenance.
Furthermore, investing in real estate can diversify an investment portfolio, spreading risk across different asset classes. It provides a stable, physical asset that tends to have a lower correlation with stock market fluctuations, offering a buffer against market volatility.
Ownership may offer an important sense of security and stability and potentially customization. In some cases, leased premises may limit structural or design changes to suit preferences or specific practice needs. From an economic perspective clearly, there is a benefit for direct spend and investment in your own space versus improving a Landlord’s property.
Lastly, the numbers behind real estate ownership can have a dramatic impact on retirement strategy. During a practice life space can be leased for 25+ years while paying off a mortgage secures a valuable asset providing a source of income in retirement or generational wealth transfer.
Michael Ulin has over 17 years experience representing physicians, dental professionals, and veterinarians. He draws from his accounting background and has a proven record of success advising clients on navigating real estate transactions that impact their practices and financial health.
We focus on the best interests of our clients and advocate with a dedication to highest standards while achieving optimal results.
