If you're a small practice owner who only needs a few thousand feet of office space, consider buying a medical condo.
It's great for practice owners who want all the benefits of ownership without the higher costs. Buying an entire commercial building allows the opportunity for expansion and renovations as your practice grows. However, if your practice is small, a commercial building might be too big for your needs.
Also, new construction can be prohibitively expensive!
Medical office construction can cost two to three times what residential construction costs. Even something as small as getting the right to tap into the water system can cost you $100,000 or more. However, expensive fees aren't the only reason to think twice before building your own space.
When you construct your own space, you'll have to suffer through tedious hearings, deal with pesky zoning issues, and put up with long construction timelines.
If you don't want to go through this process, buying a medical condo can be a better way to get your dream office space. However, purchasing space for your medical practice is one of the most significant decisions you'll ever make.
So, make sure you weigh all the advantages and disadvantages.
The History of the Medical Office Condo
The idea of condominiums emerged in the 1970s as an alternative to traditional building ownership.
Instead of buying expensive beach property, an owner could buy a portion of a building, making her purchase more affordable.
The condo concept migrated to commercial real estate when, during the 1990s, there was a spike in construction of office space because of the dot.com boom. However, when that bubble burst, developers were left with a surplus of space that they couldn't sell.
Then, they had an epiphany. What if we sell individual office suites?
On that day, the office condo was born.
Planning for the Future
Your office condo space should be large enough to accommodate any expansion plans you have for the future. One way to do this is by "space banking."
Space banking is buying some extra space and keeping it in reserve until you need it. You can lease this space out until it's time to put your expansion plans into effect. However, if you're planning on renting out extra space, think carefully about whether you want to be a landlord.
Even if you don't bank any space, you can sell your condo to buy a new one if you suddenly find you need more room.