Ask the Dental Practice Transition Experts

Recent Posts

Filter Posts

What should office rent be as a percentage of gross collections for a general dental practice?

Ideally, office rent should account for 4% - 5% of the gross revenues for a general dental practice (+ or - 1%). If the rent is less than 4% then the current owner either (i) owns the building and has not kept the rent up with other rents in the same area, or (ii) it is a sub-prime location that may require moving the practice to another location if this practice is under consideration for acquisition, or (iii) this is a rural practice where rents tend to be much lower than in metro areas.

On the other hand, if the office rent percentage is more than 8% of gross collections, then (i) this office is either too large for this practice, or (ii) this office is over improved and the leasehold improvement costs are included in the rent, or (iii) the building is owned by the practice owner and this owner is charging an artificially high rent in order to justify paying off this expensive property.

If you are considering purchasing a practice whereby the current rent is high, then it is possible that only a practice merger (where an existing practice in the same area would be merged into this office) should be the primary consideration since it would not work well for a new purchaser (unless this practice is greatly underproducing).
See Less

Don't see the answer to your question?

Ask us your question!

Client Testimonials

"My AFTCO Analyst was very helpful and knowledgeable. There were no surprises in the process. I would recommend AFTCO to anyone considering a practice transition."

Paul M. Schubert, D.D.S.
Harriman, TN

"My AFTCO Analysts asked about, understood, and showed a caring attitude about the professional and personal needs that were involved in my search for the right practice. They displayed this compassion during every step of the process."

Andrew J. Krantz, D.D.S.
New Castle, PA

"I am pleased with AFTCO's services and would recommend anyone considering selling their practice to speak with my AFTCO Analyst."

Michelle Morrow, D.M.D.
Dawsonville, GA

"I am happy with the support provided and information offered to me by my practice analyst during and after practice transition."

Anna Ellerin, D.D.S.
Westwood, NJ