Among the biggest challenges facing physician-owned practices today include the rising cost of operations and the imminent threat of consolidation.
Property ownership could be one way for physicians to alleviate the pressures of owning and operating an independent practice, argues Invision Development, a commercial real estate company, in a LinkedIn post from December 2023.
Here are five key points on physician real estate ownership from Invision's article and Becker's coverage:
1. Because of real estate’s historic tendency to appreciate, physicians who own the building in which they operate could stand to earn passive income through leasing or renting properties while having a hedge against inflation, as property values tend to increase with inflation.
2. Property investment also provides a stable, physical asset for physician owners, with some insulation from stock market fluctuations. This can alleviate the need for continuously growing profit from the business itself, freeing physicians to focus more on patient care and outcomes.
3. Real estate is a tangible asset that can be transferred. Ownership opens up the possibility for property transfer to a next generation of physicians, ensuring the practice’s future.
4. If possible, purchase real estate without a mortgage. . "Debt accumulation is not the goal; but real estate holds its market value in prime locations and assures diversity," Kenneth Candido, MD, CEO and president of Chicago Anesthesia Associates, told Becker's.
5. Physicians also warn of the dangers of real estate investment. Brian Gantwerker, MD, neurosurgeon at the Craniospinal Center of Los Angeles, told Becker's that physicians should be "aware of what their 'net-net' will be after paying a mortgage and a management company. And of course, [physicians should be aware of any] onerous local regulations that could allow squatters to stay indefinitely."