Some business owners may find it appealing to lease their medical office space, while others may wish to own. Owning the building will be a long-term investment, allowing you to have more control over the cost, and the rate of the space will remain the same.
Purchasing The Building
There are options in financing the building in which your medical practice will exist. A popular option is applying for an SBA loan, this will require a smaller down payment and will finance up to 50% of the loan. To finance the remaining portion, you can apply for a standard commercial loan. These are great options for small business loans with low capital.
Lease My Own Building
If you create an LLC for your practice, you can lease the building you own from yourself. This will enable you to deduct the payment on the practice’s taxes.
Other Tax Deductions
When you are a business owner and you purchase a building to house your business, then a CPA can do a cost segregation analysis to determine how the building will depreciate. As such, your personal property (desks, chairs, light fixtures, and landscaping can be segregated.) You can tax portions of your building on different schedules, 5, 7, or 15 years versus the 39-year schedule your building will span.
There is a set time in which your building has useful life, and it depreciates each year. A process that is often used by accountants is called Accelerated Depreciation. This allows you to pay a large amount in the beginning which lowers the net income you are taxed on. Lower net income equals lower taxes.
Owning a property has many benefits but the most attractive aspect is the return you will receive in the long run. Another way to continue to profit once you retire is by leasing the building to another physician for their practice.
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Complete Structural Partners (CSP) provides commercial and residential contracting, renovation, and remodeling services to the Greater Cincinnati / Northern Kentucky area. We specialize in retail, office, healthcare, warehouse, and manufacturing construction projects. CSP provides quality craftsmanship that is completed on time and under budget. Our Interior Design Division provides decorating, staging, and space planning services as well as construction services for small remodeling projects.