When you start looking at potential locations for your chiropractic practice, you’ll likely discover that buying or leasing your property isn’t a simple either-or choice.
In fact, the most common reason tenants lease space instead of buying it is because of supply and demand—95 percent of all commercial space is for lease and not for sale.
But if you are in the enviable position to purchase property for your practice, there are several opportunities available to you: a business condo where you occupy one unit, a group of units, a small strip plaza, or center where you’re a landlord to other tenants as well; or standalone buildings on a small parcel of land.
Major factors that impact this decision for the average chiropractor are the long-term commitment of purchasing a building and the ability to obtain the requisite financing.
If you are in a position to purchase your property, there are a few pros and cons to consider.
The case for ownership
Paying a mortgage is better than paying rent. Lease payments are forever, but your mortgage will eventually be paid off. Often, the amount of a mortgage payment may be very close to that of a rent obligation.
In most cases, you will gain equity in the property you buy. Over the course of time, your property may double—or even triple—in value. This increase in value is in addition to the value of your business contained within the property.
You’re in charge. You don’t have to deal with the hassles of a landlord or property manager.
Downsides to consider
If you are determined to own your chiropractic practice space, you might have to sacrifice on location, because many of the prime spots in which you’d like to locate may not be available for purchase.
Also, if you’re vacating a location to move to a new one, you may be creating an opportunity for a competitor to move into your former spot.
Being in charge is a con as well as a pro. When you purchase property, you’re the one responsible for all repairs and maintenance that a landlord would normally handle.
When making the decision to purchase or lease commercial space, don’t make the decision to buy simply for the sake of owning real estate. Only consider purchasing a space or property if you would be prepared to lease that same location anyway.
Also, when deciding to purchase or lease, remember to think outside of the box. You want to consider all opportunities—both conventional and unconventional. We live in an “anything goes” or “whatever works” society. As a case in point, a major restaurant chain had a location near us and, when the branch went under, the freestanding building was quickly snapped up by a group of orthodontists who wanted new office space.
An empty retail space can accommodate any number of possible tenants. You might even choose to locate your chiropractic practice in a historic home.
There are both conventional and unconventional opportunities for every business looking for a location. Perhaps a trophy location will make the most sense for your business. This is a specific unit that outshines all the other spaces for lease or purchase in a property because of its prominence and visibility.
Trophy locations do not sell or lease cheaply; however, for some chiropractors, having a trophy location can make their practice far more conspicuous.
But do all chiropractors need to be located in the same type of buildings? Of course not. You need to evaluate every type of building or property that is available to you, because the unique qualities of a particular location can represent the 20-percent advantage you need to be successful over your competitors.
Given all these points raised here, you may want to retain the services of a professional consultant before making such a weighty decision.
Dale Willerton (left) and Jeff Grandfield (right) are The Lease Coach, commercial lease consultants. They are speakers and the co- authors of Negotiating Commercial Leases and Renewals for Dummies. For a copy of their free CD, “Leasing Do’s & Don’ts for Chiro Tenants,” email your request to email@example.com. You can also contact them through theleasecoach.com.