To build or expand your veterinary practice, you will need to make significant investments. Office space, company vehicles, and medical equipment are essential for basic operations. However, there is more than one way to acquire these needed resources. Buying may save you a significant amount of money over the years. However, sometimes leasing can be a better choice, depending on your current practice needs. At Reliance Consulting, LLC, we can assist you with a buying vs. leasing analysis. Having helped many veterinarians through this process, we understand the particular requirements of this industry. We are also knowledgeable about current economic and real estate trends that can affect veterinary practices. After getting to know you and your business, we will help you make a sound decision that will carry your practice into the future. If you are trying to decide between buying and leasing, contact our office for guidance.
The Benefits of Buying Your Assets
Whether you are dealing with property, equipment, or a vehicle, buying outright can save you money over time. A purchase will generally cost more upfront, but is usually less expensive than leasing in the long term. Other advantages of buying include:
- It increases the gross value of your practice.
- You can take annual depreciation deductions.
- You can often purchase second-hand equipment. However, used equipment is often not available for lease.
- You will never have to worry about the rising costs of rent. Your clinic will be able to stay in the same space for years and maintain ongoing relationships with loyal clients.
- You can modify property as desired. This consideration is especially important if you are investing in real estate. In the future, you will be able to expand or remodel to meet your growing needs.
The Benefits of Leasing
While purchasing property can be a sound choice, leasing can also be a good option. The advantages of leasing include:
- You can obtain needed equipment or a clinic location, even if you have limited cash flow. This is an especially important benefit for brand new veterinary practices.
- Rental costs are tax deductible.
- You can continue business operations until you find the ideal space for your clinic.
- In many cases, you will not have to worry about maintenance on rental property.
- You will not have to obtain loans to purchase property or equipment.
- You can try out a new technology or office space before making a final decision.
- You will not have to worry about declining real estate values in your area.
- Leasing may allow your practice to stay ahead of the curve. When you rent equipment, you can utilize growing technology and upgrade when the newest version comes out.
In many cases, rental agreements may come with a purchase option. Once your lease is up, you may be able to buy the property at a reduced rate.
Determining the Right Choice for Your Practice
The decision to buy or lease is a personal one. The best answer will depend on your current financial situation, your location, and the various needs of your practice. With a buying vs. leasing analysis, your accountant will calculate the costs of both options. Then he or she can help you make a decision that will benefit your practice for many years. To make an accurate estimate, your accountant will consider:
- The total cost of a purchase vs. the total cost of a lease
- The estimated resale price at the end of a lease
- Periodic discount rate
- The initial deposit for a lease and how much of the deposit you will get back
- Purchase option price
- Whether you make payments at the beginning or end of a payment period
Reliance Consulting, LLC Can Help You Make a Sound Financial Choice
Deciding to buy or lease can be a stressful process, but it does not have to be. At Reliance Consulting, LLC, we have helped hundreds of small business owners expand their practices. We offer services specifically tailored for veterinarians. Therefore, we also understand the unique concerns that you may have as you plan for the future. By analyzing both your financial data and the overall trends of the industry, we can help you make a prudent choice for your practice.
Contact Reliance Consulting Today
Before you invest in your business, contact Reliance Consulting for an appointment. At our Tampa firm, we work with clients from the surrounding communities, including St. Petersburg, Clearwater, Sarasota, Pasco, Lakeland, and the greater Tampa Bay area.