What to Consider When Deciding on Buying or Renting Medical Office Space

What to Consider When Deciding on Buying or Renting Medical Office Space

When looking for a medical office, doctors will be faced with the choice of renting or buying a space. Owning a medical office building can mean either a small office condo or a large medical office building. The decision to own or lease is a business decision and must be considered carefully, as it involves a contract. Here are a few things to consider before making the jump.

Cash Upfront

When renting, you will not have to put as much money upfront as you do when buying. Renting can mean just writing a check for the first month’s rent, security deposit and possibly other smaller costs. When buying, you will need to pay for building inspections, loan fees, improvement costs as well as other bigger costs besides for the building itself.


Leasing a medical office space means that you will hope to grow, meaning that moving is inevitable. With buying, you don’t have the flexibility. You will need to make sure you get the right place for space and size you will need right then and there. However, you could lease out your building after it is bought, when you decide to move away after your company grows out of that space. It is always important to consider your future needs rather than only focusing on current ones.

Fixed Vs Variable Costs

Purchasing a medical building means that you will have more control of costs and will have a good idea f what your costs will be each year, especially if your loan is a fixed rate, making managing much easier. Depending on your loan term, you may need to prepare for refinancing fees. A lease, you never know if the prices will change over the course of time and you don’t have control over market conditions and tax increases.


Owning medical office space makes you a commercial real estate investor. If you are in an good location, you could sell your building at a profit later on. You can also just lease a part of the building that you will not be using, making yourself a landlord. This can be profitable or you end up losing money. Either way, owning a building is a lot more work than you think.


When buying, you must remember to consider all taxes. Consult someone to help you with finding out what you can and can’t deduct from taxes. When you are leasing, you can deduct the total amount you pay in rent. You are also able to deduct loan interest and property taxes.


While the best locations have most likely already been purchased, you want to be in a particular location. Sometimes your only option is to lease in these convenient locations. As there may be nothing to rent in the most desired location, your only option would be to buy an existing building or build a new one.

Return on Investment

Before purchasing you need to determine the profitability of your work. You can either get lucky and earn enough to pay off what you’ve put down, or you may not. If you overpay for the property, don’t maintain it, or it’s just not in a desirable location, you could be in for a letdown. Try to run the numbers and make sure that it is completely profitable before investing in anything.

Clinic Cube provides state of the art medical offices that help you grow at your pace, get in touch today to see how we can help.




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