How Much Should You Pay for a Dental Office Rental?

When in business and solo practice, an important consideration is the office space you set up your business, which can cost quite a bit for dental service businesses.

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Dental health care space. Photo: Roseneath Dental Care / Wikipedia

In order to operate any brick-and-mortar business or practice, the cost of renting your office space is among the first considerations you must pay attention to.

Paying the rent for your dental office space is no different. It is a long-term commitment you need to consider carefully and abide by your commitments and rental obligations.

If you are considering renting a dental office and are wondering just how much you should pay for a dental office rental that’s a fair price, there are some key factors that come into play when determining the cost of renting an office space you must keep in mind.  


Factors affecting office rent


The rent can vary greatly as it depends on various factors, including location, size of the space you will be using, amenities, and external factors like the demand. Altogether, those things and more determine a suitable and reasonable rent for an office.

Let’s look at each of those factors in a bit more detail:


1. Location


Location is a primary factor, and a dental office rental will usually cost more if it is in a highly developed, populated, and easily accessible location.


2. Size of the office


Shared spaces will typically cost you less. However, if you many employees, a bigger, dedicated space is best, but it will cost you more in rent.

Usually, for a dental practice, you will need at least 2000 square feet of office space. Some landlords also offer amenities to tenants, which can increase the rent.

Moreover, if the location is an easily accessible one, the rent will be higher.


3. Market rental rates


Do some research of your own before agreeing to the rental rates put forward by the landlord to ensure you are not overpaying. Find out the standard rate per square foot for the spaces in the building and the neighborhood.

Also, check how much the rent increases per year before signing on the contract. This will help you better determine if the proposed rental rates are reasonable or not.

If the rent proposed is reasonable and within the market rates in the area, then it is probably a good deal, and you can go ahead to sign the lease if other terms are satisfactory, too.


4. Type of lease on the table


When comparing the rent, it is also essential to consider the type leases on offer at each rental office and their total expenses.

In a full service, also known as gross lease, for example, the office rent covers all the expenses, including taxes, maintenance, insurance, and janitorial services.

However, under a dental office net lease, the rent will be lower, but additional expenses are associated with maintenance and operation.

There are at least three types of net lease: single net lease, double net lease, and triple net lease. Beware of all these types of net leases when long for a rental office.

The monthly base rent under a dental office triple net lease is usually lower than other leases because other additional expenses are also included in the rent.

Also, look into monthly versus yearly leases. Some landlords only offer one type of lease while others are more flexible. In many cases, a yearly lease may cost less for your business.


So, how much should you pay for a dental office rental?


The rent for office space is often finalized by negotiation between the landlord and tenant. Don’t be afraid to negotiate. Negotiating the rental with the landlord is important for dentists, because there are many requirements and expenses involved in running a dental practice.

If you are not up to negotiating, hiring a professional to negotiate the dental office rental on your behalf can help save your time and settle for the best deal. A professional will likely identify and know the best worth of the dental space suited for your needs and budget.

In the US, the average cost for office space is between $8 and $25 per square foot. But lots of factors go into this cost, with the location of the dental office being a big contributor to rental rates. In big cities, for example, rent is usually higher. Rental rates also do tend to go up over time as well.  

However, when you find the right dental office rental at a fair price, reports suggest an estimated 60% to 80% of patients’ payments will generally cover your overhead costs and keep the office running.

When patients pay for a filling, they’ll likely also be paying for the rent, supplies, and more.

Alexis Davis is a senior staff writer at (WWS). She covers different topics for the publication, including business, health, and technology stories.