When it comes to setting up a medical practice, one of the key decisions doctors face is whether to lease or buy their office space. To shed light on this topic, we spoke with Randy Rodgers, a Regional Healthcare Manager at Panacea Financial, who shared valuable insights into the financial, strategic, and operational considerations of owning medical real estate.

What are the benefits of owning versus leasing medical office space?

Owning your medical office is more than just a real estate decision; it’s a long-term investment. According to Rodgers, some of the biggest advantages are that owning the property provides an additional source of income, it allows doctors to keep the improvements they make, and significant tax benefits may be realized. In contrast, leasing means investing in someone else’s asset.

“There are significant tax benefits, and the potential for long-term income,” Rodgers says. “Plus, you’re building equity instead of just paying rent.”

One of the biggest barriers to ownership? Liquidity. Acquiring real estate requires capital upfront, which can be a challenge for early-career doctors or those reinvesting heavily in their practice.

How should doctors choose the right location for their practice?

Location is everything in real estate, and for medical practices, it can influence visibility, patient access, and long-term viability. Rodgers recommends using demographic tools and market data to evaluate potential sites.

“You want to understand traffic counts, visibility, market rent, and the income profile of the area,” he explains. “Especially if you’re buying, because that’s a long-term commitment.”

“You don’t want to be investing in a part of town that’s dying,” he cautions. For long-term success, physicians need to ensure that the local market is sustainable and supportive of growth.

What types of properties are best for medical practices?

The ideal property type—whether a standalone building, medical condo, or mixed-use development—depends on the nature of the practice. Referral-based practices may not need high-visibility locations, while specialties like dermatology benefit from foot traffic and signage. Physicians should weigh the cost of visibility against alternative strategies, like redirecting saved funds toward marketing.

“It’s about balancing visibility with cost,” Rodgers says. “Sometimes saving on real estate lets you invest more in marketing.”

What financial documents do lenders require from doctors?

To secure financing, doctors need to provide:

• Personal tax returns
• Liquidity statements
• Personal financial statements
• Details about the property (e.g., income potential, tenant structure)

“Banks want to know you have the reserves to handle unexpected costs—just like with homeownership,” Rodgers notes.

How does owning real estate support retirement planning?

Owning real estate not only helps with practice stability, but it also strengthens retirement planning. Doctors can choose to sell both the practice and the building or retain the property as a source of passive income post-retirement. Either way, ownership gives them more control and more options.

“In 20 or 30 years, if you’ve only leased, you have nothing to show for it,” says Rodgers. “But if you own, you have a physical asset that holds value.”

“It’s like having an annuity,” Rodgers says. “You’ve paid down the mortgage over your career, and now it’s a valuable asset.”

Why work with a real estate broker who specializes in medical practices?

Specialized brokers understand the nuances of medical real estate. They can provide recent comps, market rent data, and demographic insights, helping doctors make informed decisions. Legal and tax advisors also play a key role—especially when it comes to structuring ownership through a holding entity for liability protection and tax efficiency.

Should doctors buy property in their own name or through an entity?

Rodgers strongly recommends forming a separate legal entity to hold the real estate. This approach offers liability protection and tax advantages, such as rent deductions and depreciation.

“It’s about risk mitigation and maximizing tax benefits,” he says.

What financing options are available for doctors?

Doctors can choose from:

• Conventional loans (typically 80% loan-to-value)
• SBA 504 loans (around 10% down, longer terms)
• Physician-specific lenders (often offer low or no money down)

“Specialty lenders understand the industry and can offer flexible terms,” Rodgers explains.

How can owning an Ambulatory Surgery Center boost revenue?

Ambulatory Surgery Centers (ASCs) allow doctors to capture facility fees that would otherwise go to hospitals. This not only increases revenue but also gives doctors more control over patient care and operational efficiency.

“It’s a way to stay competitive and fully benefit from the procedures you perform,” Rodgers says.

Making the Choice

For many doctors, owning their medical office space is a smart move that supports both their practice and their long-term financial goals. With the right guidance and planning, it can be a powerful tool for building wealth and ensuring a secure retirement.

Ready to invest in your own medical office? Panacea Financial offers tailored practice financing solutions designed exclusively for doctors. Whether you’re purchasing your first space or expanding to a new location, our team understands your needs and makes the process fast, flexible, and doctor-focused.

Explore practice financing options »