To Buy or To Rent a Property for Your Medical Practice

Written by Posted On Sunday, 07 January 2018 07:33
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As a medical professional you can choose to open your own private practice. When you do this you have one big decision in front of you: to buy or to rent? There are many benefits and disadvantages on both sides, which make the decision difficult. You need to consider each of these pros and cons according to your own situation. For example, a young doctor is likely to have a small budget, while an experienced practitioner might have a little more to spend on a property.

Here are the main points to consider when you want to choose between renting and buying a property.

Cash

As a lot of things in life, cash plays an important part in the decision to rent vs. buy a property. A lease requires less money than a buying process. Dr. John Habib remembers she preferred to rent her first office, as she was required to pay only the first month' rent and the deposit, which allowed her to use the rest of the money to invest in medical equipment.

By comparison, buying an office set you back with a lot more money: the appraisal, the inspections, the loan and the improvements, as well as other additional costs, which show up on the go.

The monthly payments can increase

When you rent a space, the contract might have a clause that allows the landlord to increase the lease in the future, for example with 5% every six months. When you buy a property, you might also have to deal with increases in the monthly payments, depending on the type of loan you acquire. There are fixed rate loans and variable rate loans. If you will need a refinance, you are also going to pay additional charges. When you consider which way to go, you need to calculate the costs of buying vs. renting, estimating how much you will have to pay in the next two, three years (at least).

Outgrowing the medical practice

Most doctors start with a small office and then work hard until they grow their business. This might pose a problem when it comes to buying a location. You can't start in a big place, so you will have to settle for a small office. When you outgrow the location, you can either sell and buy a new one, either rent it and buy or rent a new office.

This depends on the type of building you have at the moment: for example, a mall rental might not allow you to expand, so you might have to move into another location.

Location is important

Any business depends on the right location. Renting might allow you to establish your practice in a heavy traffic place, like a mall or a community center. On the other hand, most properties available for buying a located in less crowded areas, which don't offer the same visibility as a rental. Even if you do find a great location, it might be way over your budget to even consider buying it.

Breaking it in a business is always hard and comes with a lot of challenges, but if you analyze them carefully and make the best choices for your business, you will be able to grow and establish yourself as a medical practitioner in your neighborhood.

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Narendra Sharma

Naren is an interior designer and real estate expert. I’m grateful everyday to my wonderful clients who have entrusted me with their homes.

www.amarillorealestateguide.com/

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