The Age-Old Question: Lease or Buy?

The Age-Old Question: Lease or Buy?

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Most of the time, residential buying vs. renting, works out well for the first-time homeowner. It is quite different from a commercial purchase.  Many commercial purchases are made as a way of securing a location, without the threat of rising rent, with the incorrect assumption that equity is a part of the equation, etc. Maybe or maybe not. The buyer could be trading rent increases for ownership expenses that include loss of value of the building. It’s important to note, that in the residential arena, the first-time homebuyer is committing to a much smaller amount of funds for a down payment for a “starter home” than the required funds a new dentist needs for a startup practice.

Equity on any property is only realized at the time of sale. Market value at the time of sale determines the selling price. Very important aspects that affect the value at the time of sale are:  

  • Demographics of surrounding businesses that are sources of patients can leave the area
  • Economic conditions of neighborhood can deteriorate, creating less patient affordability  
  • Functional obsolescence-the ever-changing advances in dentistry could change the functionality of the dental office. This applies to both interior AND exterior.
  • Mortgage rates

These aspects can either increase or decrease the property value at sale, depending on stages, and gyrations, of the economic market cycle.  

DENTREXX Does What Others Don't.

DENTREXX exclusively represents dental tenants and buyers in selecting strategic locations, negotiating money-saving Letters of Intent, and in negotiating business protective stipulations throughout the dental lease.


Leave the real estate portion of your dental practice to us.


"I would like to formally recognize Mr. Gelfand and his team for Lease Negotiation services. My husband had known “Norm” for several months and we are thankful for the decision in selecting him to negotiate for us. He is very knowledgeable and detail-oriented, all while providing exceptional customer service. Throughout our lease negotiation process, he took the time to explain each and every decision and secured lease terms that were very favorable for my practice. His team actually cares about their clients. Although our negotiation process was complete, Norman himself called to check on us as we received record hurricane flooding. He offered his services to revisit the lease if we were affected in any way.

I highly recommend DENTREXX.  Please, if you have any questions, call or email me."

Courtney P. Jones, DDS
Jones Creek Family Dental
Baton Rouge, LA

All dental start-ups require huge amounts of capital investment.

A building purchase requires a large additional cash down payment up front – and yes, the location is secured.  So, the practice owner has two huge loans:  one for all aspects of the practice start-up, PLUS the building mortgage. Therein, lies the risk.  Funds are tied up that could be used for further practice operations i.e., marketing, increasing personnel, equipment upgrades, etc.  None of us has a crystal ball.  Considering the four aspects noted above, a purchase is a gamble – a real win or a devastating loss – and it all depends on the market conditions.  If a practice owner owns his/her building, and market conditions deteriorate, it is very difficult to realize any profit from a sale of a building, if it ever happens.  There is always the possibility of taking a loss in a sale. The owner could get stuck in an outdated office, in a has-been location with few options to change the trajectory of the practice.  

The flip side for a start-up is to secure a well-negotiated initial long-term lease with guaranteed renewal options at set prices.  The lease should protect the dental tenant against hidden business risks that are not typically negotiated by attorneys.  The tenant-protective portion of a dental lease will allow for future flexibility as the practice dynamics change, will positively affect profitability, and can increase practice value at the time of sale.   


Buying or leasing is a BIG decision.  Weigh all the positives and negatives.  The financial interest of the tenant/buyer representative/unlicensed consultant is never a noble reason for advising a client to buy or lease space.  Any business professional, whether licensed or unlicensed, that puts his/her own interests above that of the client’s interests is not worthy of the client’s trust.  Fiduciary responsibility is key in a real estate transaction.  

What dental practices don't know can cost them thousands...

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