Should a practice buy or lease its office?

What you're really comparing

Leasing: rent, pass-through costs and tenant-improvement terms, with flexibility to move. Buying: a down payment, a mortgage payment, taxes, insurance and maintenance — plus control and potential long-term equity.

Questions that decide it

• How long will you practice at this location?
• Can the practice afford both acquisition debt and a building loan in a slow year?
• What would build-out cost, and who pays — you or a landlord?
• Is the building specialized (plumbing, imaging) or easy to re-lease or sell?
• Would the down payment be better spent on equipment or working capital?

A common structure

Many owners hold the building in a separate entity that leases it to the practice. That separates real estate risk from operating risk and can simplify a later practice sale. Get legal and tax advice on structure.

Don't let the building starve the practice

The most common mistake is buying property that leaves the practice short on cash after closing. Model both payments together before committing.