Office Relocation Made Easy – And Affordable

Dentist Office Relocation | Negotiation | Bright Dental CPAs

A common mistake many dental professionals make when they decide to relocate to a new office is that they can do it by themselves. And while it’s quite possible to serve your patients full time, manage your practice and facilitate property negotiations, you may be cheating yourself out of the best deal. Read on to learn why you should put a team together to manage your office relocation.

There are many reasons why you may want to move your dental practice to a new location, but if you want to be sure you are moving to the right location at the right price, consider looking to your business advisory team for guidance.

Want a better deal on a great office location? Call in the experts.

Your financial advisor is one of your best resources when it comes to painting a clear picture of your practice’s overall financial wellness. Their expertise will help you arrive at an accurate cash flow projection, make sense of any tax implications that are associated with the move and will help you determine if the space you are eyeing is financially realistic. But your financial advisor isn’t the only professional who should have a seat at the table during your relocation discussions. For even better results, consider working with somebody who makes it their job to know the various nuances of your local real estate market.

Read Also: Nine Questions To Ask When Purchasing A Dental Practice

A common mistake many dental professionals make when they decide to relocate to a new office is that they can do it by themselves. And while it’s quite possible to serve your patients full time, manage your practice and facilitate property negotiations, you may be cheating yourself out of the best deal. Rather than spend more on your relocation than necessary or letting your other daily responsibilities slip, a real estate broker will not  only manage the legwork associated with choosing your office’s future, they will make sure you get exactly what you are paying for and then some.

I recently spoke with Justin Fodor of Carr Healthcare Realty, a real estate brokerage firm that works exclusively with professionals in the healthcare industry, to find out about the benefits a dental professional might be missing out on when they choose not to work with an expert real estate broker.

Best Deal For The Dollar

Your real estate broker understands the art of negotiation and will work to secure terms that are favorable to you and your practice, regardless of whether you will be buying or leasing the property. For example, while you may be concerned about “ruffling feathers” where pricing is concerned, your real estate broker will be ready to negotiate. They have been through the song-and-dance many times, and they know that the “sticker price” is only the starting price.

Justin said sometimes the healthcare professionals he works with are unsure about bringing in a third party to negotiate. This, he said, should never be a concern.

“Landlords work with brokers all the time,” explained Justin. “In fact, they hire their own brokers. They expect you to bring one to the table as well.”

Your Ideal Location

Oftentimes, if a real estate brokerage firm doesn’t specialize in demographics itself, they will work with professionals who do. This information helps you identify the best office location for your unique needs. Whether you want to find out how many general dentists are in a certain area or whether an area has access to a specialty practice, utilizing demographic information helps optimize your office’s geography.

“We’ve worked with a lot of practices that are coming from larger office buildings. They aren’t really sure what type of space they should be looking for,” explained Justin. “We can help them decide the type of environment that’s right for them by taking into consideration foot traffic, visibility, population, and other demographics.”

A Head Start

“We work with dental professionals to maximize their deal as much as possible,” said Justin. “It takes time to move into an office, remodel and then get patients back through your doors.”

A broker, especially if they specialize in serving healthcare clients, can help you negotiate the time you need to stabilize your practice’s cash flow. Justin said it’s not uncommon for him to secure a 5-month build-out period and 3-4 months of rent-free office space. By that time, everything should be up and running again.

Work With A Team That Knows Your Business

If a new office location is in your practice’s future, email the Bright Dental CPAs at Rea & Associates. We can help you identify your options from a financial perspective and will work with your real estate broker to make sure you are able to secure the best deal for your dental practice.

By Ryan Dumermuth, CPA, CFP (Mentor office)

Are you looking for more great advice to help you plan your career in dentistry? Check out these articles:

What To Expect From Your Career In Dentistry
Dentistry: It’s Not All White Coats And Drills
What To Consider When Purchasing A Dental Practice

Dentists Want More From Vacation Homes

Second Houses Can Trigger Tax Relief

Second Houses Can Trigger Tax Relief for Dentists - Bright Dental CPAs - Ohio Accounting Firm

If you rent your vacation home to friends and family at a cost that’s less than what is considered to be a fair rental price during the weeks you are not using it, it’s considered personal use property, which allows you to deduct real estate taxes and mortgage interest as itemized deductions on your personal tax return.

There will come a point in your dental career when you will have finally paid off your student loans, updated your equipment, remodeled your practice and have secured a large, dependable customer base. This will be a pinnacle moment in your life and certainly cause for celebration. Oftentimes, dental professionals choose to celebrate such an accomplishment by making a large purchase – a tangible representation of their professional success. For many, a second home not only becomes a symbol of their achievement, it can be a useful (and potentially lucrative) investment that can bring added tax benefits.

Read Also: Debunking Common Personal Finance Myths For Dentists

I frequently field questions from clients who want to know more about their tax implications with regard to purchasing a vacation home. Below are some common scenarios to consider, based on the insight I have provided to dental professionals in the past.

Change The Scenery

If you rent your home 14 days out of the year or less and use the home for personal use for 14 days or more, the property will be classified as personal use property, which allows you to deduct your real estate taxes and mortgage interest as itemized deductions on your personal tax return. In addition, if you rent your home out to your dental practice for meeting space a few times a year (fewer than 14 days), your practices can take a deduction for the expense of renting the property. Just make sure that the business purpose of the space is clearly defined.

Generate Extra Income

Rather than buy a vacation home that sits empty for the majority of the year, you may find that it makes sense to rent it out to others while you aren’t using it. If you do decide to go this route and rent it for more than 14 days of every year, remember that all income generated as a result of this transaction is taxable. That being said, a portion of the mortgage interest and real estate taxes may be deductible as rental expenses while some of your other expenses could qualify as itemized deductions. You might be able to take depreciation on the property as well. Furthermore, rental losses are limited based on your adjusted gross income and are carried forward during the years in which the loss cannot be taken. This whole process can get confusing. Therefore it’s important to sit down with your tax advisor to ensure that Uncle Sam gets his cut.

Welcome Friends

So you aren’t really on board with the prospect of renting your vacation home to strangers while you are away, but you really don’t like the idea of letting the house sit empty either. In this case, you might consider renting the property to friends and family. If you take this route and rent it at a cost that’s less than what is considered to be a fair rental price during the weeks you are not using it, it’s considered personal use property, which once again allows you to deduct real estate taxes and mortgage interest as itemized deductions on your personal tax return.

Four Interesting Facts To Know Before You Buy

If you are struggling to figure out which state you should consider as the location of your second home or whether investing in a piece of land, timeshare or even a mobile home is more favorable to your specific situation, consider these interesting tax facts.

  1. If you decide to invest in a portion of land on which to build your home then, for whatever reason, change your mind and decide to sell the property prior to personal use, the gains or losses would receive capital gain or loss treatment. On the other hand, if you buy the land, build a home, and, after a while, decide to sell it at a loss after having used it personally, you will not be able to claim the loss on your tax return.
  2. Ever wonder if that boat, mobile home or house trailer qualifies as a second residence for purposes of the mortgage interest deduction? Good news – it does! That is, it qualifies for the deduction as long as it includes sleeping, cooking and bathroom facilities.
  3. Looking to purchase a vacation home far from the obligation of state income taxes? Then look no further than Florida, Texas, Alaska, Nevada, South Dakota, Washington, Wyoming, New Hampshire or Tennessee. These states don’t have a state income tax, which could lower the tax impact on your rental income and any gains realized from the sale of a piece of property.
  4. Listening to a salesman pitch the benefits of owning a timeshare can be terrifying, but taking the plunge and making the investment doesn’t have to be – at least from a tax standpoint. Timeshares can be considered second homes for the purpose of deducting interest expenses. However, if you decide to rent the timeshare to a third party, you may end up forfeiting the mortgage interest deduction. Another common misconception about timeshares is that letting a charitable organization stay there for a period of time will qualify as a charitable contribution. This is not the case. The only way to get a charitable deduction for your time share is to donate the entire property to a charity.

Want to find out if owning a vacation home is right for you? Email the Bright Dental CPAs at Rea & Associates today.

By Alan Hill, CPA (Mentor office)

Want to master the various stages of your dental career?
These article may provide some insight.

What To Expect From Your Career In Dentistry
Factors In Determining Dentist Compensation
What To Consider When Purchasing A Dental Practice