Medical centres are actually some of the most sought after investment properties in the commercial market – they have good rental returns and stable tenants. But there are a few pros and cons you need to think about before going down the medical centre road.
The positives
To start with, the medical centre market remains largely unimpacted by changes to the economy like residential or retail investment. No matter what’s happening financially around the globe, people still need doctors and dentists, chemists and day surgeries.
Medical centre tenants are generally more stable, and more likely to stay for longer periods of time.
The negatives
They’re not cheap. Yields are often lower on medical centres, reflective of reduced risk.
As mentioned, tenants are generally more stable, but when they do leave, they can be harder to replace. And if you replace them with someone who isn’t in the medical field, the value of your property could decrease.
When choosing a centre
Make sure the area doesn’t have too many buildings that are zoned for medical use, that way there’ll be less competition and you’ll attract longer term tenants.
Always ensure you know what comes with the sale and what doesn’t, and make sure you do your research.
Finally, negotiate. Be sure your advisors know the local area and understands the market. They will be able to tell you what the property is worth and give advice on what you should be paying – and what that price will give you.
If you’re on the hunt for a medical centre, get in touch with the team at McGees today to discuss.