Why Veterinarians Should Invest in Commercial Real Estate
It’s generally accepted that home ownership is a great long-term investment. In fact, owning a home is the truest sign of the American Dream realized, according to this survey by Bankrate.com. This makes sense, with the steady increase in home value over time and realized gains during a sale, buying a home is something that has been accepted as a wise investment.
As a veterinarian, if you run or own a practice, you may be wondering if those same ideas apply to owning your practice building. Owning your veterinarian practice facility carries significant upside. Here are six reasons why veterinarians should consider commercial real estate ownership.
Generates Long-Term Wealth
When you own the building your veterinary practice is in, you’re investing money in an asset that has historically outpaced inflation, but more importantly, it creates leverage. Leverage is the idea that borrowing from the future will allow you to grow more today, providing enough value to pay back your loan many times over. Credit is one of the most powerful tools a business owner can utilize, and buying real estate for your vet practice is a loan that can pay for itself.
If you’re hoping to grow your veterinary practice to multiple locations, it’s advantageous to pursue the route that gives you the best chance to realize the most value over the long term.
Build the Veterinary Office of Your Dreams
When you buy commercial real estate and build your practice, it gives you the option to create a veterinary office that perfectly accommodates your needs and style of practice philosophy. Are you focused on helping livestock? Or maybe you want to move to a more holistic approach for family pets. Either way, when you build your practice, you can approach every detail with your business vision in mind, rather than fitting a building to your needs.
Generates Awareness and Passive Income
As more and more healthcare services gravitate toward retail spaces, it creates a unique opportunity for veterinarians to join the movement. Vet practices are often more visible in retail spaces, as businesses nearby create opportunities for word of mouth and convenient walk-ins.
Maybe even more valuable is the possibility of passive income. When you design and build your own facility, you’ll have the opportunity to plan for additional businesses to set up shop alongside yours — creating passive income.
In addition, passive income from renting your practice space is a prudent way to transition into retirement. It provides a steady revenue stream, that can be boosted from the sale of your practice or space.
Investment in commercial real estate is a great sign for the economy, which is why a variety of tax benefits and deductions for business owners exist. Some of the key tax benefits include:
- Depreciation – As a physical asset, your practice building will wear down over time. To offset this, you can deduct a certain amount from your income every year for 39 years, before taxes, as an expense.
- Interest expense – In the same way, the interest that you pay on your mortgage is also an expense that can be deducted.
- Various utility expenses – Aspects of owning a property such as maintenance or renovations can also be deducted during tax season.
All of these deductions can offset some of the costs of investing in commercial real estate.
Stake in the Community
Veterinarians are valuable members of communities, especially as more and more people become pet owners. When you own your commercial property in a community, it can showcase a commitment to serving the population and that your business is here to stay, leading to an increase in trust and loyalty from your customers.
Creates a Legacy
A business is something that can be passed down for generations. When you own your veterinarian practice, it creates a space for your family to grow. Whether you have children that hope to become vets themselves or just need somewhere for them to work after school, owning your practice allows you to create those opportunities.
At Ashton Gray, we regularly work with veterinarians to help build the practices of their dreams. To find out if investing in commercial real estate is right for you, discover how Ashton Gray’s proven process is making vet practice real estate ownership more accessible and successful with our full-service approach.