6 Factors that Influence Medical Property Prices
You can invest in medical properties for stable and secure cash flow. Medical real estate is more stable since doctors and health professionals are long-term tenants. Therefore, they are more likely to sign long term leases. Plus, healthcare professionals are more likely to do better during tough economic times.
Here are 6 factors that influence medical property prices:
1. Supply and Demand
If the demand for medical properties exceeds the supply, medical property prices increase. The prices increase since more people are looking for medical properties. The competition can, therefore, drive medical property prices up. Low demand can, however, limit the growth in value of medical properties.
Doctors and health professionals consider the location of the property. The location can affect the value of the medical property. Doctors will always choose an accessible and convenient location for their patients. If the patients cannot access the location, the medical properties in these locations are cheap.
3. Market Performance
The medical real estate market is more stable. However, if the medical properties sell below the asking price, you can expect the medical property prices to fall. If the prices are rising, the value of these properties is more likely to increase.
4. Interest Rates
Changes in interest rates can affect the prices of medical properties. If the interest rates are low, then it is cheap to borrow money. Therefore, doctors and health professionals are more likely to borrow more money. They can drive up prices. If the interest rates rise, then it is expensive to borrow money, slowing price growth.
If more people are living in a specific suburb, then the demand for medical services in that specific suburb is very high. More doctors and health professionals will want to start their medical practices in that suburb. They can drive up medical property prices in that suburb. If the population grows, it increases the demand for medical services. This can drive prices up.
6. Renovation Potential
Doctors and dentists rarely move. They can stay in the same location for the rest of their lives. They just add more rooms to the medical practice since they are not planning to move. If they can renovate the property in the future, they can add value to their property. Renovating the medical property can increase the price of the property.
The population, demand and supply, interest rates, market performance and even renovation potential can influence medical property prices. Once you decide to invest in medical real estate, it is better to talk to professionals. If you want to find out more about medical real estate opportunities, speak to Realforce Property today.