5 Benefits of Owning Your Healthcare Real Estate
When you run a healthcare practice of any sort, it is safe to say that you will be faced with some
considerable expenses—from payroll to equipment purchases as well as rent for your office space. In fact, it is the latter that will likely be a big expenditure on a monthly basis and a major part of your overhead as a healthcare practitioner.
However, it is possible to optimize healthcare real estate expenses by owning the property
where you run your operations. In this new blog, the financial professionals at LenDRgroup Consulting will explain the benefits of owning your own building.
The Perks Associated with Healthcare Real Estate Ownership
There are five primary perks associated with healthcare real estate ownership.
Consider the following:
- You contribute to your retirement and exit strategy. Most people understand that
planning for retirement is important, and it’s likely that you are saving and investing
presently in order to welcome the future with peace of mind. However, you can grow
your retirement pot even more if you leverage healthcare real estate ownership as part
of your strategy. For instance, when you rent the only thing that you could potentially
sell is your healthcare practice. When you own, you have the potential to sell the
property along with the practice to the practice buyer, or even sign a long-term lease,
which will enable you to receive cash flow after you have sold your practice. At the end
of the day, your healthcare real estate could be worth more in the long run than your
- You can save on what you pay in tax. If you make the decision to purchase your
healthcare real estate, it is likely that you will be advised to form an LLC that will
ultimately own the real estate. Then, the practice entity can pay the LLC for rent and
operating expenses, which can be written off, thereby saving on taxes in the same way
you would if you were paying an outside landlord. Additionally, the LLC can also write
off other expenses that will reduce the tax liability associated with the rental income
earned, including mortgage interest, property taxes, repairs, maintenance, and more.
- You can increase your net worth. When you pay rent to a landlord, you pay someone
else. When you own the property, you are paying into your own assets, giving you a new
revenue stream without adding to your office overhead. Plus, you likely will pay less on
your property’s mortgage when compared to monthly rent.
- If a loss is generated from your healthcare real estate, you still technically win. It’s true! Even if a loss is experienced, this can be used to offset your income for tax purposes. Of course, we recommend that you consult with a financial advisor or accountant to learn
the ins and out of this benefit.
- You can take advantage of cost segregation, which is a strategic tax tool that is
commonly used to increase cash flow by speeding up depreciation. Ultimately, when
you buy healthcare real estate, you don’t simply buy the physical building, but also the
items that are in the property itself. In turn, these items tend to depreciate more quickly
than the property, allowing you to write them off on a faster timeframe, which will
postpone your federal income tax liability to later years, letting you realize more
favorable cash flow in the earlier years of your property ownership.
Are You Interested in Learning More about Healthcare Real Estate Ownership?
The team at LenDRgroup Consulting welcomes the opportunity to speak with you more about
the pros as well as the cons associated with healthcare real estate ownership in order to help
you determine if it is the right move for you. Additionally, we can also assist you as you seek out
financing for healthcare real estate as well as for other practice needs.
Reach out to our company today and set up a consultation.