This article will explore the issues relating to buying in to practice real estate. Most medical practices are structured as professional corporations. Typically, if practice real estate is not leased, it will not be owned by the practice corporation itself for both liability and tax reasons. Rather, the building or condominium unit will be owned by a separate entity. That entity is usually structured as either a partnership or limited liability company, or if only one doctor is involved, the real estate may be owned jointly with the doctor's spouse.
Some young doctors have no interest in becoming a partner in the real estate entity.
They may not feel it is a good investment. They may not have the financial resources to buy-in to the entity. They may not like the location or may feel the practice will outgrow the space and eventually need to sell. On the other hand, some senior doctors may not want to allow new practice partners to become partners of the real estate entity. They may feel that they put a lot of time, effort and money into building the structure and may want to hold on to it as an investment even beyond retirement or death.