There is always much debate around the subject or owning vs. leasing, anything. We all immediately assume owning is the right choice because why lease it when you can own it, right? Or maybe wrong? I will further discuss the advantages and disadvantage of leasing a medical office, medical equipment and office furniture.
Medical Office or Headquarters
Advantages of leasing a medical office over owning is freeing up working capital. With the money that is freed up from a lease payment and not a property payment you can focus more on other aspects of the business. Also, the ability to borrow funds, if needed, are is there as opposed to if you have a commercial mortgage.
A second advantage of leasing a medical office is you have your choice of where to lease. A lease payment can and should be less than a if you bought the property. Leaving you the option of renting in a great location with high traffic and away from competition.
Lastly, is when you are not the landlord you are not responsible for the maintenance on the outside of the building and for some leases you are not responsible for the inside. Either way your lease agreement is written you will not be responsible for at least the outside of the building, once again freeing up more working capital.
The disadvantages of leasing a medical office is you lose out on the tax deductions that come from having a commercial mortgage. Deductions include mortgage interest and property taxes. Another disadvantage of leasing is the option of additional income from you becoming the landlord, i.e. owning the building and leasing out offices.
Owning an office space also can fund ones retirement. By owning the office you are able to let the p...
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... a decision. After going over the advantages and disadvantages of leasing a medical office, I recommend that we move forward with selling the headquarters building and leasing it back from the owners. There are more advantages to leasing medical office than owning it.
I also recommend that the medical equipment be leased and not owned. Technology moves to rapidly for any medical company to keep up with the new medical equipment. But I do recommend that all office furniture be bought out right and not leased. The risks involved in leasing the furniture and not buy are too uncertain.
In conclusion, leasing has plenty of advantages and disadvantage. Leasing works for some things and but not for all. In the healthcare field it is in our advantage to lease a medical office and medical equipment but not in our advantage to lease medical office furniture.
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