If you have a private dental practice, you’re in a unique position to be in an industry to help others improve their health. Furthermore, startup dental businesses have only a 1% – 2% failure rate, which is a remarkable feat compared to other industries that fight to keep their doors open during the first five years of business.
While the field of dentistry can prove to be a reliable industry in which to work, it’s not foolproof in terms of generating profits. Considering this, you might be thinking of ways to improve your dental practice.
Therefore, if you’re renting office space, you might be researching information about buying commercial real estate for your dental practice. If so, here are a few surprising advantages to owning versus renting a building for your dental practice that could greatly improve your bottom line.
One of the most obvious benefits of owning over renting is that you are investing into your practice with every monthly payment. If you rent, that money is just going out the window. However, owning a building means you are building equity. As you build equity over time, you can potentially borrow against it in order to pay down debt. Additionally, you could stand to make a profit in the future should you ever decide to sell the property.
Many dentists who rent office space are exceedingly aware of rent increases. When you own your own building, you can put an end to the escalated cost of rent. You can also avoid pricey lease negotiations which often include costly fees or built in expenses that only line the pockets of landlords. Owning a building can pose a big expense initially, but long-term, you are saving money by dodging inevitable rent hikes.
Many dentist offices are rented in buildings that lease office space out to other businesses. For instance, if you rent in a shopping complex, you may find your dental practice right next door to a doughnut shop, which isn’t ideal for obvious reasons. Having your dental practice locked next to an unfavorable business neighbor can put a huge cramp on your business success.
However, when you make the decision to buy your own commercial building, you are in total control of where and near whom you practice. Furthermore, if you purchase a building with additional office space, you can pick and choose your own tenants instead of being stuck with an undesirable business next to yours.
As an owner of a dental practice, you know full well that your business demands a lot of specialized equipment. Much of this equipment such as lab chairs and sterilizing machines can be extremely cumbersome to move as well as expensive to relocate in the office. Furthermore, some equipment such as x-rays machines and dental 3D printing machines need dedicated space so you can get the results you and your patients deserve.
Renting office space can hinder your practice’s ability to rearrange or move specialized equipment to accommodate office staff needs or evolve with your business’s growth. However, if you own, you can plan where your dental equipment will be situated in the office. You can also have the option to renovate the space in order to accommodate machines and equipment necessary to your dental practice.
When you rent, you miss out on financial incentives such as tax breaks. By owning commercial real estate property, you can factor in depreciation and deduct interest when you prepare your business taxes. You can also write off non-mortgage related expenses from your taxes. This could result in significant savings compared to if you rent property or office space for your dental practice.
The Last Word on Renting or Buying Real Estate for Your Dental Practice
Of course, there are a lot of factors to consider when buying commercial real estate versus renting for your dental business. Between location, space accommodation, budget and other details – the choice can be immobilizing at times.
Nonetheless, the choice to own presents a slew of benefits for your business. From gaining better control over expenses, having spatial flexibility, and the freedom to make autonomous choices about your business space – owning is a clear advantage.
While the initial investment might seem intimidating at first, the long-haul benefits can add up to clear gains for your dental business. So, if you are looking for ways to improve your profit margins and boost your bottom line, add purchasing real estate into your calculations. Once you crunch the numbers and consider all the perks, you might find owning an office is the best advantage for your dental practice.