Selling a Dental Practice Is Different from Selling the Building
The time has come, and you’re preparing for selling a dental practice. Whether it’s for retirement or another reason, you want to ensure your patients and employees are left in good hands. But not only do you own the practice, you also own the building. So is selling both of them the same thing? Not necessarily. Usually, you’re discussing two separate transactions. And, and in some instances, two different buyers.
Questions to Ask Yourself
Some owners of dental practices may choose to keep the building to maintain the landlord option. But before selling a dental practice and the building, consider the following:
- Where is the building located? Consider if the area will attract investors and thrive for a while into the future.
- What is the condition of the building? If you’ve been in your location for a couple of decades, assess if the exterior, interior, or both need upgrades to be market ready.
- What are the tax advantages to selling or keeping the building? You will want to know if you have realized all of the tax advantages through depreciation and interest deductions.
Selling a Dental Practice with the Building
Although this might seem like a good idea, especially if you don’t want to move into the role of landlord, such an investment might be too much for a new buyer. But, in some cases, it certainly could work to sell both together. That might happen when the buyer has other tenants in the building to offset mortgage payments. Or, if the mortgage is lower than rental payments. You may even choose to maintain the building for a year or so after selling a dental practice, and then renegotiate with your buyer at that point. There are a few different directions you could take here.
To review, here are your choices when selling a dental practice:
- Keep the building and act as a landlord, whether short- or long-term.
- Sell the building, even at a loss, to get it off your hands.
- Find the right buyer who is a good fit for your staff and patients.
Regardless of what you choose to do, when you’re ready to retire, we recommend focusing on selling a dental practice first. You can always negotiate a building transaction with any potential buyers. Or, you can find a buyer for your building separately if you decide to sell it. If you just have questions about what your specific options are, we invite you to contact us at Menlo Dental Transitions. We will be happy to share some insight and discuss your what might work best for you.