As a dentist, you must understand the implications of subleasing a space when starting a new dental practice.
Of course, it’s completely understandable why you’d want to start with a sublease. However, a new dental practice requires a significant investment in capital (and time). You may be compelled to offset these costs by subleasing space from another dentist instead of building out your practice.
But, here’s the truth: subleasing has major drawbacks. Let’s explore these pitfalls and why you should avoid them.
Why Subleasing Space is a Bad Long-Term Play
A sublease leaves the subtenant-dentist vulnerable for many reasons. Here are just a few:
- The subtenant doesn’t have a contractual relationship with the landlord. If the tenant’s lease is terminated, so is the sublease.
- Often, patients are conditioned to visit a specific practice location. It becomes routine. When the subtenant-dentist eventually moves to a permanent location, there is a risk that patients won’t move with the practice.
- Dentists who sublease space have a hard time selling their practice. Even if they find an interested buyer and can assign the sublease, it’s unlikely a bank will finance the buyer’s purchase because of the sublease.
- Eventually, a subtenant-dentist has to move to a new location. Unfortunately, it may be difficult to time the start of a new lease with the end of a sublease. And the downtime can result in the loss of patients.
If Not a Sublease, Then What?
Take the time upfront to understand commercial lease options and requirements. Many healthcare lenders provide 100% financing for new practice buildouts. While the short-term cost savings are attractive, subleasing space for a dental practice is not a great long-term play.
If you’re worried about doing this yourself, we can help. We work with dentists every day to help them start their practices with confidence, clarity, and peace of mind. So book some time with us for a free consultation — we’d be happy to help.
