In the February practice management article we explored some of the pros and cons of buying a practice versus squatting (starting from scratch). Notwithstanding the variety of influences and scenarios raised it is the writer’s personal bias that a purchase is usually the better financial result for the practice principal. When analysing the decision about whether to purchase your premises or not the results are less clear cut and throughout this article we will explore the financial and non-financial realities of the decision.
Any analysis of this scenario needs to be broken up into metropolitan and non-metropolitan based practices. The rationale in this is that those dentists practising in the metropolitan areas of our capital cities have limited access to space that is not in commercial or retail centres, whereas non-metropolitan practices have access to retail, commercial as well as residential space.
Commercial space is space used densely for business-to-business tenants (office towers in the CBD); specialist commercial space for healthcare practices (large medical rooms/centres); and business centres in non-metropolitan locations. Retail is that space predominantly occupied by businesses providing a good or service directly to a non-business consumer (a Westfield or local mall). Residential space is characterised by those properties that are amongst residences on neighbourhood streets, and in areas that are council zoned as mixed use properties or with a low grade commercial zoning.