This question comes up a lot in dental groups. If you have had this question of which way to go, hopefully I can give you a few insights to help.
Most people understand buying homes, it is a concept so common in America. Think if you want to find a home. You have three basic options to choose:
1) Build the house. This option will allow you to get exactly what you want from every room to every cabinet handle. However, just like a car the depreciation on the investment is huge. With customization comes cost. You get exactly what you want, however it will take time to build. Financially these are some of the toughest purchases to make an investment profit though.
2) Buy a house with all the upgrades. This option allows you to just walk in and enjoy all the work someone else put into it. However, because of the upgrades you are likely to spend top dollar for it. You are also likely to have a hard time selling it for what you bought it.
3) Buy a fixer-upper. Think of a house that is run down, not well taken care of, and the seller just wants out. Due to the lack of current value the seller likely will let it go for pennies on the dollar. If you know how to fix it up, you can get a great house for cheap or something that flips very well. These often have the highest return on investment if you have the knowledge and the willingness to put in some hard work.
Dental practices aren’t much different than houses. They are often the most expensive investments you will ever make, and are also share a lot of similarities.
1) Starting a practice from scratch is like building a house. It can be the most expensive way to start, it takes time to build, however you get to customize exactly what you want from the size to the cabinet handles.
2) Buying a high end practice is like buying an upgrading house. You get to walk in and enjoy all the hard work someone else put into the practice. However, the owner is going to know it is a high end office and therefore comes with a top dollar price tag.
3) Fixer-uppers are like failing practices. The building might be run down; the owner maybe should have retired a few years ago; maybe the dentist got caught in a divorce, got disabled, or died. Regardless the reason you can often buy these offices for pennies on the dollar. They have the highest return on investment if you have the knowledge and willingness to put in some hard work and fix the problems.
All options can be good depending on what you are looking for. All of us are looking for something different. Know the options and pick what is best for you and your situation.
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