Buying consulting rooms or practice premises is commercial lending, and some lenders offer health professionals better terms on premises their practice will use.
Buying your own consulting rooms is financed as a commercial property loan: lenders usually lend a smaller share of the value than on a home, over a shorter term, so the deposit is larger.
Some lenders with health specialist teams lend more against rooms your practice will occupy, and home equity can cover part of the cash.
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Charles and the team at links property finance recently assisted me with my purchase of my first property in Burwood. As a first home buyer, Charles made the process simple and easy. I would recommend Charles to all first home buyers
Charles went above and beyond to help us secure our home loan. He worked hard to find the best option for us and kept us updated throughout the whole process. His knowledge of the lending market was impressive and he made everything straightforward.
Charles looked after us really well and his knowledge gave us the confidence to purchase our property. He wasn’t pushy and always ensured we felt comfortable with the repayments.
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Practitioners often consider buying their rooms through a family trust, a company or a self-managed super fund, which then leases the premises to the practice. See SMSF loans.
A self-managed super fund can generally buy business real property and lease it to a related business at market rent, but any borrowing has to use a limited recourse arrangement with strict rules.
These structures carry tax, legal and super consequences, so get advice from your accountant and a licensed financial adviser before you buy.
If you plan to let rooms or sessions to other practitioners, a lender may count some of that income, especially with written agreements in place. The wider case for owning your premises is in buying your business premises.
Buying jointly with other practitioners is possible too, but needs a clear agreement on what happens if one owner leaves the practice.
Generally more than for a home loan, because commercial lenders lend a smaller share of the value. Some lenders lend more to health professionals buying premises their practice will occupy, and equity in your home can sometimes stand in for part of the cash.
Sometimes: some lenders prefer two years of practice financials, while others consider a shorter history for an experienced practitioner with strong personal income. A practice with no trading history usually has fewer options.
That is a question for your accountant and a licensed financial adviser, because it turns on tax, asset protection and your retirement plans. Lenders can work with most common structures, though the documents differ.
It can be, depending on whether the vendor is registered for GST and whether the sale is a going concern. Your accountant and conveyancer can advise before you sign the contract.
Not necessarily. Some lenders’ health professional policies cover dentists, pharmacists, physiotherapists, psychologists and other registered practitioners, while others are limited to doctors. Eligibility differs by lender.
Buying a home as well? Our guide to home loans for doctors covers mortgage insurance waivers on residential loans.
Charles can compare the repayments with the rent you pay now, check how lenders would read your practice income, and see whether home equity could reduce the cash you need.
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General information only, not credit, tax, legal or financial advice. Commercial lending policies for health professionals vary between lenders and change over time. Ownership structures and super fund borrowing need advice from your accountant and a licensed financial adviser.
