According to Dental Startup Academy, choosing a location for your practice is one of the most important decisions you’ll make. This involves selecting a general location for your practice and then finding out what’s available. There are several pros and cons you should consider regarding renting or owning a dental office.
Renting
If you’re currently renting your office, or thinking of renting, there are several pros and cons you’ll need to keep in mind.
Pros
Ability to Select a Better Location — If you’re willing to rent you’ll likely be able to find a better location. QuickBooks states that it’s easier to lease in a high-end area than it is to buy. It’s also important to remember that demographics and traffic flow can change over time. If you’re renting it will be easier to leave and find a new location.
Don’t Have to Worry About Maintenance — Everything from heating and air conditioning issues to general building maintenance is handled by the owner. This is often an ideal situation for those who are just beginning their practice. You can put all your time and energy into focusing on your practice and building your business.
Cons
Lease Payments Usually Increase – Over time, rent can steadily increase. Rent payments are sometimes almost as much as a mortgage payment. Even if your rent is reasonable, it’s something you’ll always have as an expense as long as you continue your practice. A mortgage, however, will eventually be paid off.
Terms Dictated by Landlord – When you rent you are basically at the mercy of your landlord for more than just the cost of rent. Not only can a landlord potentially tell you which days and hours you can be open but can sell unexpectedly. This means you’ll either have a new landlord to work with or possibly need to find a new location.
Buying
Multibriefs reports that one of the main reasons more professionals don’t buy office space is because 95 percent of all retail and office space isn’t for sale. If you’ve already bought office space or are in a position to do so, there are several pros and cons you’ll need to consider.
Pros
Flexibility & Freedom – When you own your own building you have the freedom to use the property as you want. Healthcare Business Today states that one of the benefits of buying a property is not dealing with landlord hassles. Eventually you’ll have equity in the property if you want to move or expand.
Potential to Sell – Whether you’re getting close to retirement or simply want to do something different, when you own a building you can potentially walk away with a large sum of cash after selling. You’ll also have the option to rent the property after retirement.
Cons
Excessive Debt – While one of the benefits of owning your own business is the potential to sell, you have to make the initial purchase and spend years paying off the property. Depending on the market, there’s no guarantee you’ll make a profit or even break even when you do sell. There is also the unpredictability of tax deductions from year to year.
More Responsibility – Buying a property is not only a major investment but it can potentially be time-consuming and include several new responsibilities. You’re a landlord with a building to manage. Responsibilities can include everything from cutting grass and providing snow removal to keeping up repairs and paying taxes on the property.
Deciding if you should buy or sell, or continue with the arrangement you currently have, will depend on your own personal and professional needs. It’s important to carefully consider the pros and cons of each. Whether you buy or rent will likely have a profound impact on the long-term success, both financially and professionally, of your practice.
