Making an investment in the commercial real estate industry can be a big move. You can have the option to invest in different types of properties. Understanding it all and knowing what will work well for you is the key to making the most of it. There is a possibility that you might have considered making an investment in the medical office buildings or the parks as they can be highly beneficial.
As per a study conducted by the United States Bureau of Label tax, health care occupancy is projected to grow by 16% by the year 2030. It will add about 2.6 million new jobs, which is quite faster than the average job growth rate. So it can be said that health care is projected to bring in more jobs than any other industry.
There is a range of reasons why the medical industry is expanding. This is because the aging population of the United States is ever-increasing, leading to demand the medical services. Besides, more people are now getting insurance coverage for care during their old age. The coverage rate every year is also increasing.
Thus there is a need for healthcare services and professionals to meet the diverse healthcare needs of the population. Today services right from mental health to traditional office spaces are required. This provides great opportunities for healthcare professionals to fill in.
With all of the activities, the health care providers now will require more space for establishing or expanding their current office space. So if you have been planning to invest in the medical sector, then you need to know how you can benefit from the growing need for medical buildings.
But it is vital to note that it will require a great amount of investment for which you have to be prepared. There are alternative options available for you that can be helpful. This includes the CRE loans.
Make sure to take assistance from an expert in the industry who will provide you with proper understanding and information about the available loan options and guarantee you are able to get the financing at a good rate.
Medical office loans
- For the Buyers
Starting with a new medical office can be the most vital financial decision a doctor can make in their career. Whether you are just out of the residency or have the experience, having a trusted financial partner who can help you get the financing to expand the practice can be quite beneficial.
No doubt the traditional medical office loans are available, but there are other financing solutions available too that can help address the needs of the health care industry you are involved in. There are commercial real estate loans available for all.
However, it is vital that you consider getting in touch with a good company that know how to help the doctors at all stages of their career for building a practice that they can be proud of
But you must know that the loan terms for each individual customer vary greatly.
Thus understanding things in advance and comparing the available options is the key to getting a fair deal. For most doctors, when starting a practice, the SBA 7(a) loan has served to be a great option.
Besides the other benefits that the loan provides, it can be a great experience for the doctors to buy out a partner or acquire the medical practice of the competitor.
But it is important to keep in mind that such loans might not be available to the doctor who does not have good credit or the doctors with a huge amount of student debt. It can be disqualified for most young doctors still carrying debt from medical school. The basic terms of financing include.
- The loans amount herein can be between $30000 to $5 million
- Loan can be used for financing the equipment, commercial real estate, and working capital
- There is the requirement of about 660 minimum credits to get the loan
- Providing collateral for the loan is a must
- In the case of real estate, the loan term can be 25 years. For equipment and working capital, it happens to be ten years.
- There are certain documentation requirements for the medical practice, including a year-to-date balance sheet, business license, business charts, projected returns, financial statements of 1-3 years, personal tax returns, etc.
- For the Investors
There are commercial construction loans available that can be used for developing a medical park right from scratch. Using the right help, one can have access to the required financing for the project, the term loan.
Besides, commercial term loans also happen to be a great option for developing or acquiring health care commercial real estate. It will include a fixed or variable interest rate alone, which will be repaid between 1-and 5 years. Besides, there can be a clear structure on what the money can be used for.
No matter whether you are entering the commercial market as an investor or a buyer, there are loans available that can be helpful for you to get the required funding at a good rate and avoid any complications.
But finding a lender that can assure positive outcomes can be difficult. So it is vital to research well and take proper measures to avoid any complications later. When you have support from a reliable expert, then things won’t be difficult for you, and there will be an assurance of getting the required funding on time, ensuring you are able to make use of the opportunity to the very best.
Benefits of investing in medical building
Besides the positive outlook data the medical industry provides, there are other reasons why investing in the medical building is quite a popular option now.
- Medical buildings are resistant to economic changes
No matter the condition of the economy, there will be a huge demand for medical care. Thus it makes a medical building resistant to the economic changes. In fact, when the market isn’t performing well, the medical facilities might see more business.
In such a time of economic hardship, most people prefer to visit the smaller patient clinics near their place or provide convenience instead of the costly emergency room located far away.
- Multiple uses of medical office buildings
Medical buildings are not just limited to family health care practices, but there is a range of medical-related services that require more than typical office space for practice. This includes specialty physician service, full service, urgent care center, mental health care center, etc.
The versatility guarantees demand medical office buildings, and the investors thus can find suitable tenants for the lease space.
- The centers have the highest occupancy rates
As there is a great need for the hospital systems having the clinics present in the areas near shopping center, medical parks, etc., have proven to be successful. In the last few decades, this has proven to bring in favorable occupancy rates.
By the end of 2020, the vacancy rate for the medical office buildings was about 8.6% which is quite lower than the overall other sector’s vacancy, which happened to be 13.2%.
- Provides a predictable revenue stream
The medical office commercial real estate, besides providing high occupancy rates and being resistant to the economic changes, is also stable, unlike the other industries like the retails and warehouse that might change from one lease to another. Healthcare practitioners stay in the same place for a period of time.
Thus from the investor’s point of view, this would be a predictable revenue stream that will be consistent and will last for a longer time. Medical office buildings are quite popular among real estate investors for different reasons.
Medical real estate is an asset class that is known to provide a positive future outlook as it is resistant to economic change and provides great opportunities.
You must know investing in a medical office building is not too different than the regular real estate investments, but you need to have a solid business plan and find a lender that knows about the local market and can provide the financing you need for your job. It will assure you are able to make the investment right on time and benefit from the available opportunities.
The medical industry has started to provide great benefits and opportunities for investors and buyers. If you are planning to invest in medical office buildings, then it is just the right time to change the industry.
But you need to have a proper idea so as to avoid any complications. Private Capital Investors is the company you can trust for expert help. They have got the professionals who will be there to guide and assist well. The experts right from helping you find the right loan choice for your investment property will do it all.
They will stay by your side to assure you are able to make the investment easily and that you do not face any difficulty. So when the time arises, you can always rely on them for the professional assistance you need.