If you spend any amount of time around physicians who own practices, one question comes up over and over again:
“Why don’t you just buy the building?”
It’s usually framed as common sense. Real estate appreciates. There are tax advantages. You can pay yourself rent. You’re building equity instead of “throwing money away” on a landlord. From the outside, it sounds almost irresponsible not to buy.
And yet, with one exception, every location in my primary care practice is rented.
This isn’t theory. It’s not something I read in a book or heard on a podcast. It’s a decision shaped by real capital constraints, growth goals, lender realities, investor math, and a hard-earned understanding of how medical practices actually scale.
What follows is not tax advice or accounting advice. It is simply my experience as a physician who started with one exam room and grew into a multi-location practice—and why, at this stage of my career, renting has been one of the most strategically important decisions I’ve made.
My first office was about 800 square feet. Two exam rooms—shared with a general surgeon. In practice, that meant I usually had one exam room. I drew blood in the hallway. I hustled. I made it work.
I outgrew that space very quickly.
That early phase matters, because it shaped how I think about space. When you’re small, every square foot feels precious. When you grow faster than expected, space becomes a bottleneck. And when space is a bottleneck, owning can become a liability instead of an asset.
I did buy my first location. There were very specific reasons:
It was directly next to one of the largest hospitals in my city
It was the last developable parcel of land in that area
The hospital later announced an ~$800 million expansion
From a pure real estate perspective, it made sense. The land alone is likely to appreciate significantly over time.
But even here, the experience was far from smooth—and it exposed the hidden costs of buying early.
When I bought that building, I had less than two years of tax returns.
Most major banks—Wells Fargo, Bank of America, and others—wouldn’t touch the deal without two full years. The only bank willing to work with me was Truist.
That came with strings attached:
Minimum 20% down on the purchase
40% down on the build-out
Roughly 30% down all-in when everything was said and done
The total project cost was about $1.8 million.
Do the math. That’s a massive amount of capital tied up in a single location—capital that I could not deploy elsewhere.
At the time, that decision handcuffed my growth.
Let’s acknowledge reality.
Owning real estate does come with advantages:
Depreciation
Paying yourself rent
Mortgage payments that build equity
I enjoy those benefits on that first building. It’s nice. I’m not anti-ownership.
But tax efficiency is only one dimension of business decision-making. And for a growing practice, it’s often the wrong dimension to optimize first.
Here’s the question that changed everything for me:
What is the highest-return use of my capital right now?
Putting ~30% down on a $1.8M building tied up roughly half a million dollars.
For that same capital, I can:
Open multiple new locations
Test new markets
Hire staff
Invest in marketing
Build infrastructure that scales
In fact, my most recent location cost me roughly:
~$60,000 build-out
~$30,000 reimbursed by the developer
~$50,000 all-in to open
For the cost of buying one building, I could open ten locations.
That’s not a subtle difference. That’s an order-of-magnitude difference.
This is where many physicians get tripped up.
A single-location practice producing $200,000 in true profit (after paying yourself a real market salary) might sell for a 2–3x multiple.
That’s a $400,000–$600,000 valuation.
Why so low?
Because:
The owner is often the key revenue generator
The business is fragile
Growth is limited
Key-man risk is high
Investors don’t pay premium multiples for small, owner-dependent practices.
Now let’s look at the same math at scale.
If a multi-location practice produces $1 million in profit, and 90–95% of that profit is derived from ownership—not the physician seeing patients—everything changes.
That business might justify:
A 5x multiple ($5M valuation)
Or at larger scale, 10x+ multiples
Same $1M in profit. Radically different valuation.
Why?
Because:
Systems exist
Management is in place
Growth is repeatable
Risk is diversified across locations
Owning real estate does not meaningfully increase that multiple. Scale does.
When you rent:
You can start smaller
You can move faster
You can relocate if demand shifts
You can outgrow your space without regret
I’ve personally outgrown a 3,300 sq ft, eight-exam-room clinic in about two years.
If I had over-built and owned that space, I would have been stuck—or forced into a suboptimal decision.
Renting keeps your options open.
My typical approach looks like this:
3-year lease with a 3-year option
Prove the market
Validate demand
Scale operations
Once the market is proven:
Expand into a larger space
Sign a 5–7 year lease
Or open an additional nearby location
Only after maturity do I even consider buying.
At that point, the income supports it effortlessly—and the opportunity cost is much lower.
When you’re running a single clinic, rent feels enormous.
When your business generates $30,000–$40,000 days, rent becomes a line item—not an existential threat.
Context matters.
The same $50,000 expense can be terrifying or trivial depending on scale.
There’s another reality many physicians underestimate.
When you’re small, insurance companies don’t negotiate.
Their message is simple:
“There are plenty of doctors in your area. If you don’t like it, leave.”
Scale changes that dynamic.
It’s one of the drivers behind why I’m building a Management Services Organization (MSO). Size creates leverage. Leverage creates sustainability.
Buying a building does not give you negotiating power. Scale does.
If your goal is:
One location
Minimal growth
Lifestyle optimization
Buying your building may be a fantastic decision.
If your goal is:
Rapid expansion
Multi-location growth
Enterprise value
Renting is often the superior strategic choice.
Neither path is morally superior. They simply optimize for different outcomes.
Early in your journey, capital is sacred.
The question is always:
How can this dollar make me more dollars?
At my current stage, the answer is clear: reinvest into growth, not into walls.
The real wealth in my business today does not come from seeing patients. It comes from owning systems, teams, and scalable infrastructure.
That only happened because I prioritized growth over real estate ownership.
Renting is not weakness.
It is not “throwing money away.”
It is a strategic decision aligned with growth, flexibility, and long-term enterprise value.
One day, buying may make sense for more locations. And when it does, I’ll do it gladly.
But right now, I’d rather have ten thriving clinics than one beautiful building.
And at this stage of my career, that trade-off isn’t even close.
