Are you thinking about starting a new practice as an eye doctor? As an optometrist, you are going to be a small business owner and you will have a lot of significant decisions that you need to make about the future of your practice. That includes how you are going to manage your optometry practice startup costs.
Starting an optometry practice comes with numerous choices, and you need to decide whether you want to purchase or lease a commercial space. Learn more about this important aspect of your optometry business plan below, and figure out whether leasing or purchasing a space for your practice is better for your specific situation.
Why You Want To Buy
So, what are some of the biggest benefits of purchasing office space for your optometry practice? Some of the most important benefits to keep in mind include:
If you decide to purchase space for your optometry practice, you should have more control over your location. Sure, you can rent office space just about anywhere you want, but you may have a difficult time finding office space that has already been designed for an optometry practice. You would have to ask the landlord for permission before redesigning the space.
Therefore, if you want total control over where you put your optometry practice, you may want to purchase office space instead. Maybe you want to build your own building, or perhaps you want to redesign the existing building to match your specifications.
As alluded to above, you will have more freedom if you decide to purchase space for your practice. You do not want to have limits placed on your optometry practice growth, and that means you need to think carefully about your optometry office design.
If you decide to rent your office space, you will have limits placed on what you can do with the space, which might make it hard for you to accommodate a growing practice. The ability to completely control the property can be invaluable.
3. Capital Appreciation
Finally, perhaps the biggest benefit of purchasing space for your optometry practice is the opportunity for capital appreciation. What this means is that, over time, the land on which your practice sits should go up in value. You should view your practice’s real estate as an investment, and when you go to sell your practice down the road, you should get a significant return on that investment.
In addition, if you purchase a space that is big enough, you may be able to rent out the other areas of the building to generate more income for your practice. Do not overlook the importance of capital appreciation if you decide to purchase property for your optometry practice.
These are just a few of the biggest reasons why you might want to purchase space for your practice. On the other hand, there may be a few reasons why you want to rent space for your practice as well.
Why You Want To Rent
A few potential reasons why you might want to rent space for your optometry practice instead include:
1. Save Time
Your time is your most valuable resource, and you must make sure you use it wisely. If you decide to purchase space for your practice, you will also have to handle all of the maintenance
that comes with that practice. For example, you might have to deal with problems with the plumbing system from time to time, or you might need help dealing with the roof.
If you rent space instead, it will be the responsibility of the landlord to handle all of these maintenance issues. This will free up your time to focus on taking care of your patients.
2. Greater Flexibility
If your practice is growing rapidly, you may need to make changes to the building to accommodate that growing practice. It can take time and money to scale the building to match the needs of your practice, but you don't necessarily have to worry about this issue if you are renting the space instead.
Once the contract ends, you can simply vacate the space and move on to a different location that suits your practice better. It isn’t as easy if you need to sell your property and purchase a new one, so leasing office space may provide you with more flexibility.
3. More Working Capital
If you are starting a new practice, you may require a significant amount of working capital to purchase equipment and hire staff. You might not have enough capital left over to purchase property. Therefore, if you want to free up your working capital to focus on other areas of the business, then it might not be the best idea to purchase property right now. You might also have a difficult time qualifying for a loan to purchase space for your practice if you are right out of school.
Clearly, there are benefits and drawbacks to both options. How can you decide what is right for your needs?
Questions You Need To Answer
There are several important questions you need to answer before you decide whether you want to purchase or lease space for your practice. Some of the most important questions you need to answer include:
How long can you commit to being in a single location or in a single building?
One of the first things you need to think about is how long you plan on being in the same location. If you think you are going to be in the same location for a long time, then you might want to purchase property for your practice instead. On the other hand, if you feel like you might have to move quickly, then you may not want to purchase property. You might want to lease instead.
How quickly do you think your practice is going to grow?
Next, you need to think about how quickly your practice is going to grow. If the size of your practice is going to change quickly, then you might want something with more flexibility, which makes leasing the better option. If you feel like the size of your practice will be stable, then it might be better to purchase property.
What does the local real estate market look like?
You should also take a look at the real estate conditions in the local area. If you feel like the real estate market is a bit down right now, then now might be the right time to buy. On the other hand, if you feel like you would have a difficult time qualifying for a property loan, then you might want to rent office space instead.
Work With Dental & Medical Counsel for Help With Optometry Practice Management
It can be difficult to decide whether you want to rent or purchase space for your optometry practice, and that is why you should reach out to an expert team that can help you. We are Dental & Medical Counsel, and it would be our pleasure to help you manage your optometry practice, which includes real estate transactions. Contact us today to speak to a member of our team to learn more about how we can help you.
Q: How do I determine whether buying or leasing is the right choice for my optometry practice?
A: There are several factors to consider when making this decision, including your financial situation, your long-term goals for your practice, the local real estate market, and the availability of suitable commercial spaces for lease or purchase in your area. It can be helpful to work with a real estate agent or financial advisor who has experience working with optometrists and other healthcare professionals.
Q: What kind of financing options are available for buying a commercial space for my optometry practice?
A: There are several financing options available for purchasing commercial real estate, including traditional bank loans, Small Business Administration (SBA) loans, and commercial mortgages. The best option for your practice will depend on your financial situation, credit history, and the specific terms and rates offered by different lenders.
Q: What should I look for in a commercial space if I decide to lease?
A: When evaluating commercial spaces for lease, it is important to consider factors such as location, accessibility, visibility, parking availability, and the overall condition and layout of the space. You should also review the lease agreement carefully to ensure that it includes favorable terms for your practice and that you understand your obligations and responsibilities as a tenant.
Q: Can I negotiate the terms of a commercial lease?
A: Yes, it is possible to negotiate the terms of a commercial lease, especially if you are working with a real estate agent or attorney who is experienced in lease negotiation. Some areas where you may be able to negotiate include rent, lease length, maintenance and repair responsibilities, and tenant improvement allowances. It is important to approach lease negotiations with a clear understanding of your needs and priorities for your practice.
At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every doctor deserves the best advice and service so doctors can do what they do best, treat their patients. We make their lives easier by providing expert guidance, so they can focus on their personal and professional aspirations.
About Ali Oromchian, Esq.
In addition to practicing law for almost 20 years, Ali is also a renowned speaker, throughout North America, on topics such as practice transitions, employment law, negotiation strategies, estate planning, and more! Ali has helped hundreds of optometrists realize their professional goals and looks forward to aiding you in navigating the legal landscape.
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