A recent survey from The Wealthy Dentist investigated the number of dentists who lease or own their facilities. According to the dental practice marketing and management blog, 60% of dentists who responded own their dental practice facilities, while 40% lease their facilities. However, according to the site’s survey, only 4% of dentists are worried about their business mortgages. The survey had 179 respondents.
“Historically, they [dentists] have been qualified for loans almost automatically because dentistry is such a stable business. You sort of need to be a real screw-up to fail in dentistry, and banks know this,” writes Jim Du Molin, host of the blog.
Other figures about the dentists who completed the survey include the following:
• 24% own their building free and clear;
• 32% own and pay a reasonable mortgage;
• 4% are worried about their mortgages;
• 20% have long-term leases; and
• 20% have leases up within the next 2 years.
The site’s commentary on the survey raises what could be a new real estate issue: With commercial real estate tanking, are you located in or near a commercial real estate center that may now be in trouble?
“Empty storefronts mean reduced property values, and fewer employed people passing through the area to use your services,” writes Du Molin. “The upside is that it is a great time to renegotiate your lease!”
One of the major dangers of owning, according to Du Molin, is that neighborhoods can go downhill. In contrast, the major danger of leasing is getting taken advantage of by a landlord, writes Du Molin.
Du Molin makes two recommendations for dental professionals: 1) When leasing a new facility, do not contact the landlord personally; and 2) If you currently have a lease, start your negotiation at least 2 years before it expires. The shorter the time line to the lease expiration date, the more money it will cost you.