AFTCO

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 and I grew a relationship over several meetings. He gained the trust of my wife and myself over this time. He really took the time and energy to get to know me, my personality, my abilities and goals. Using this, he brought me information on practices that he thought would be a good fit. I really appreciate his diligence and dedication to me throughout the process."

Chapin Densmore, D.D.S.
Kirkland, WA

"AFTCO made the difficult process of selling my practice very simple, and helped me in every phase along the way. My AFTCO Analysts were very nice to work with, were as attentive as could be, and always available to discuss any hiccups along the way. They made everything very simple for me, in other words, THEY did all the work, and this was a BIG bonus for me, as other companies wanted ME to do all the work, and pay them to evaluate my practice. Overall, I would gladly, and enthusiastically recommend anyone I know to work with AFTCO on buying or selling a practice."

George F. Kirkland III, D.D.S.
Durham, NC

"My experience with AFTCO was excellent from start to finish. My AFTCO Analyst was very easy to get along with and communication was always open. I would recommend the services of AFTCO for selling your practice."

Robert D. Ruiz, D.D.S.
El Paso, TX

"My AFTCO Analyst was very helpful to work with. This was my first purchase of a dental practice and he walked me through the process step by step. He was very knowledgeable about what needed to be done and the sale went smoothly. All the help I received from him during this process was well worth the small fee to me as the buyer. I would have spent far more on a private broker to help with the sale. Overall working with AFTCO made this stressful process much more manageable."

Benjamin L. Byrd, D.D.S.
Kellogg, ID