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March 12, 2024

How Medical Real Estate Ownership Can Diversify Your Income and Build Generational Wealth

As a doctor, you’re busy. Long hours, stressful work, oftentimes the last thing you want is to spend your time thinking of the best ways to invest your money for the long term. For those doctors juggling patients, a practice, and a personal life — medical real estate can offer a quick and familiar on-ramp to building generational wealth. 

Below are the key ways that medical real estate can diversify your income, as well as build toward generational wealth — while actually improving your current practice. 

Leasing

Leasing of medical real estate space is particularly advantageous for doctors who already own or plan on opening a practice. Doctors can leverage their medical practices to “anchor” a larger building, renting out the additional space to other businesses. On its own, leasing extra space to other businesses can create an additional income stream, but it also creates the additional benefit of increased visibility for the anchor practice. That means more walk-ins, word-of-mouth referrals, and higher traffic around your business. 

Property Value Appreciation

Leasing can provide value in the short term. In the long term, the appreciation of commercial real estate such as healthcare can lead to an influx of cash if you decide to sell. According to Statista, the U.S. commercial real estate market is projected to grow 2.6% annually over the next four years. Historically, commercial real estate values typically rise and rise — making them a great investment in the long term and a tool to generate income. 

Property value appreciation is an important advantage to note because the money made can be used to further the growth of your practice through new locations, additional equipment, and other investments.

Independent of Stocks and 401(k)

First, let’s start with a classic investment adage. Don’t put all of your eggs in one basket. A 401(k) is one of the most popular investment strategies not just for doctors but professionals in all industries across the United States. A 401(k) typically consists of a collection of stocks and bonds that are spread across different industries to limit the reliance on one or a few particular sectors of companies. With medical real estate investment, doctors can add one more layer of diversity, and therefore security, to their wealth. 

Healthcare real estate also has the advantage of short-term gains. Instead of waiting decades for a 401(k) to be cashed out, investment in healthcare real estate can quickly increase your income in as little as a few years — leaving you, your practice, and your family more money to compound investments.

With The Right Partner, It Can Take Less Time and Learning Compared to Other Investment Vehicles

Other options for building wealth, such as starting a side gig or startup can mean stepping outside of your realm of expertise and investing most of your extra time for the foreseeable future. With medical real estate, you’ll be learning more about the spaces you’ve occupied for your entire career, and outside of the initial lift, it can be a hands-off investment — with the right partner. Without a partner, medical real estate ownership takes a tremendous amount of time and capacity from your practice.

When you partner with a full-service development firm like Ashton Gray, you’re getting years of experience and our team of experts in real estate, construction, navigating municipalities, medical facilities, and real estate investments. This allows you to focus on providing the highest quality care possible, while the Ashton Gray team can handle everything related to medical real estate ownership and development. 

 

Potential to Increase the Performance of Your Practice

Imagine building the practice of your dreams, rather than fitting your practice to an existing building. You and your staff would probably work a lot more efficiently, right? Some of our partners have also indicated that new practices not only lead to better performance with current staff but also help recruit new staff. That’s what investing in medical real estate can do — change business as usual into a booming business.

It’s not just being able to have more control over the design of your practice, a new building can create buzz in a community often leading to an increase in business. Patients are attracted to an easily accessible building that’s clean and new. 

At Ashton Gray, we recently worked with Bodyworx Physical Therapy in Oklahoma. After opening their new stand-alone facility, Bodyworx was able to double their business and build a facility that matched the vision of what their practice should be. 

Investing in a new facility gives you control over your practice, but the income and wealth investing in medical real estate can provide true personal and financial freedom.