If you’ve been thinking about building your own dental practice, now’s a great time to jump in. Market conditions continue to support favorable mortgage rates and construction costs. In addition, owning your commercial property still appears to be a reliable and potentially profitable investment for your future.
Favorable commercial property values
Commercial property values are at their lowest level in decades, providing purchasers an opportunity to obtain far more for their investment than they could have just a few years ago. Plus, property values are likely to increase over time as the economy recovers, making commercial real estate a relatively secure long-term investment. Commercial property can also become a potentially valuable source of retirement revenue – either through outright sale of your practice and the underlying property, or through sale of your practice and lease of the property, creating a life-long revenue stream.
Historically low mortgage rates
As with residential properties, commercial real estate mortgages continue to be at historically low levels. Today it is possible to secure long-term commercial mortgage payments that rival the rental payments for a comparable leased space. In addition, down payments for financing can be as low as 10% of the total loan amount if financing is obtained through an SBA program.
Stable construction costs
Costs for construction materials like plywood, copper, and diesel fuel have climbed during the “Great Recession,” jumping 5.4 percent during 2010.* Nevertheless, construction companies are still holding the line on bid prices due to intense competition and weak demand for their services. As demand for commercial building construction increases with a recovering economy, expect construction costs to increase as well. Now is an excellent time to build your own practice, while the costs of building remain relatively stable.
So if you’re considering building your own practice, don’t wait. Current market conditions have created an unprecedented opportunity to invest in your future at historically low costs. But the opportunity won’t last forever.
*Modern Distribution Management, “Construction Firms Face higher Materials Costs, Flat Building Prices,” www.mdm.com, January 13, 2011.