RENTING VS. OWNING: WHAT’S RIGHT FOR YOUR PRACTICE—PART 1
Where to situate your podiatric practice is a big decision. Once you have decided on a particular area, however, the next big question is if you should you rent or buy the space for your office. For the majority of practitioners, just starting out buying may not be an option because you may not have access to the capital necessary for the down payment. However, it’s worth considering the pros and cons of both options as it will help you answer important questions about your business plan.
Pros and Cons of Renting
Renting the space for your practice has its own unique advantages and drawbacks.
- As previously mentioned, start up cash needed for a rental property is much less than a purchase. Most landlords look for the first month’s rent and an additional month for security.
- Renting gives you greater flexibility than buying in terms of how much space you get. You can choose a space that suits the size of your practice now (instead of paying for heating, cooling and maintaining empty space for “someday”). When it’s time to expand, you can rent a larger space.
- You’re making less of a commitment to a location. If you find the location isn’t convenient for your patients or the neighborhood changes in an unfavorable way, you’re not locked in. Once the lease is up, you can leave.
- Location, location, location: many rental companies offer high-quality space in high-visibility areas such as shopping centers and medical office parks that you would not be able to match if you were buying or building an office.
- Maintenance is not your responsibility. Heating problems, snow removal, landscaping—all come out of the landlord’s pocket, not yours.
- You don’t build up any equity in your property.
- You are limited as to the improvements and customizing you can do for your practice. Any cosmetic type upgrades that you wish to make will most likely be on your dime but they will stay with the building when you leave.
- You have no control over the common area maintenance fees and this can wreak havoc with your practice budget if they go up unexpectedly.
- Unless space is available where you are renting, expansion may not be possible.
- The landlord may place limits on the services you can offer.
When you join the Institute for Podiatric Excellence and Development (IPED) one of the great advantages of membership is being able to draw on the experience of other practioners on issues such as renting vs. buying. For more information, contact us at: 978-296-7634.
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