For many veterinary practice owners, leasing space is the natural—and often necessary—first step when starting or expanding a clinic. Let’s be real: when one is starting, there often isn’t a backyard ATM to fund a new practice and all it entails AND construction. Leasing offers flexibility and lower start up costs. But as a practice matures, there often comes a point when owning the real estate becomes a smart move rather than a distant dream. Things to consider…..

Signs It May Be Time to Consider Buying

1. Your Practice Is Stable and Profitable
If your clinic has consistent revenue, strong cash flow, and predictable patient volume, ownership may be a logical next step. Yes, there are fluctuations with foot traffic but if you find you have cash in the bank, aren’t worried about making payroll and aren’t living paycheck to paycheck, might be a good time to think about this step.

2. You’ve Outgrown the “Short-Term” Mindset
When you know you want to stay in a location long term—whether due to patient demographics, referral networks, or your brand stability—continuing to lease may mean paying rent indefinitely with no equity gained. Ownership affords the ability to continue to build you practice for an eventual transition and retain the property and the lease revenue from that transition (think retirement income and stability). Ownership allows the building of equity much like a home but better in that you can sell the “insides” (the business) and the property as well (think of this as double dipping) so it’s a win all around.

3. You’re Facing Rising Rent or Lease Uncertainty
Rent escalations, CAM increases, or lease renewal uncertainty can impact profitability. CAMs (Common Area Maintance) is a cost that many tenants incur and, similar to HOA, it generally keeps up the exteriors of your location yet it’s money spent that you can’t recoup. Lease renewals often come with rent increases. Buying can provide cost control and predicability, insulating your practice from market rate rent increases that you have no control over. Granted, those CAM charges are now your upkeep costs but there are potential tax benefits with building maintenance as well (more to follow on that in the next post).

4. You’ve Invested Heavily in Build-Outs
Veterinary clinics often require substantial and very specialized improvements—surgery suites, xray rooms for full body and dental xray, oxygen lines, reinforced flooring, and sound attenuation not to mention drains for kennels. Owning the building ensures that the value of those improvements stays with you rather than the landlord. Unfortunately, in a lease, once you move out, many owners will lease to another vet (yeah, ugh) so transitioning to ownership keeps you in control of what happens with your building and your business.

Benefits of Being an Owner-User Veterinarian

Equity Instead of Rent
Instead of rent being a pure expense, ownership allows your monthly payments to build equity—often at a cost comparable to leasing when structured properly.

Greater Control Over Your Space
As an owner-occupied veterinary practice, you control renovations, expansions, and equipment upgrades without landlord approval delays. This flexibility is critical as medicine, technology, and patient expectations change. Want to consider a rehab segment to retain patient revenue in the face of declining pharmacy revenue? Landlords might not be keen on this addition but as an owner, that is your choice now.

Long-Term Wealth Creation
For many veterinarians, the building becomes one of their largest retirement assets. Ownership can provide appreciation, tax advantages, and an eventual sale or lease-back opportunity upon retirement.

Practice Sale Advantages
A practice housed in owned real estate is often more attractive to buyers. You gain options here and so does your buyer: you can sell the practice and keep the real estate as income property, or sell both together for a cleaner exit. Or you can sell your practice owner the real estate later on down the road which is hugely appealing for most buyers.

Ownership Isn’t Right for Everyone—And Timing Matters

Buying too early can strain cash flow, while waiting too long can mean missing favorable pricing or financing opportunities. The right time is highly individual and depends on practice performance, growth plans, and local real estate conditions.

Working with advisors who understand both veterinary practices and commercial real estate is essential to evaluate whether ownership supports—not distracts from—your core mission: delivering great patient care while running a profitable and sustainable business.

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Next up:

Financial considerations in leasing vs buying….