4. Not Choosing the Right Area
common mistake of first-time practitioners is selecting a location
before they know which kind of patients they want to attract. This is
backward. Choose the type of patient you want to work with first, and
then choose a location.
Because then, you can look for a
geographical area that has people who fit your target demographic.
You'll end up with a steady stream of precisely the kind of patient with
whom you want to work. Before doing this, you'll have to put together
an ideal patient profile. Your tenant rep can help you with this.
Ask yourself what kind of patient you want to target. Is it going to be men or women, young or old, blue or white-collar?
course, if you own an elective practice, part of your demographic
research will be to look at income and education levels in the area
After figuring out exactly who your ideal patient is, pick at least three geographical areas in which to look.
U.S Census Bureau has a super useful site for conducting demographic
research: https://www.census.gov/. You can also glean rich demographic
information from newspapers, Chambers of Commerce, and local, state, and
city governments in each region. Try to get statistics on household
incomes, age distribution, blue-collar vs. white-collar, race and
ethnicity, and education.
Map these by areas in the cities or
towns you're considering. Then, determine whether these regions are
growing or shrinking. Try to find communities that are growing. This
way, you'll be serving an ever-increasing customer base.
5. Not Understanding Lease Types
If you don't understand the different types of leases, you won't know which one is most advantageous to you.
A gross lease means the tenant pays one lump sum for his rent, including utilities and janitorial services.
landlord then deducts his expenses. If you're negotiating a gross
lease, ask which janitorial services the landlord provides and how often
you'll get them. Sometimes, the tenant has to pay for electricity usage
beyond an agreed-upon amount.
With a gross lease, the landlord
assumes all responsibility for the building, while tenants concentrate
on growing their practices. It's supremely easy for the tenant, who can
forecast expenses without worrying about unexpected charges.
Net leases are the opposite of gross leases.
a net lease, a tenant pays base rent and some of the maintenance costs,
taxes and insurance for a property. These include such expenses as real
estate taxes, property insurance, janitorial services, property
management fees, sewer, and water.
There are several types of net leases:
- Single Net Lease (N Lease): The tenant pays one operating or maintenance expense.
- Double Net Lease (NN Lease): The tenant pays two operating or maintenance expenses.
- Triple Net Lease (NNN Lease): The tenant pays three operating or maintenance expenses.
Even with these breakdowns, the actual definition of a net lease is dependent on the details of each contract.
lease expenses can fluctuate from month to month and year to year as
operating expenses increase or decrease, making expense forecasting
Modified Gross Leases
The modified gross lease
(sometimes called a modified net lease) is a combination of the two. The
rent is paid in one lump sum and can include any of the nets. Tenants
and landlords will have to decide which of the nets to include in the
The modified gross lease is popular with renters because its flexibility makes it easier to negotiate an agreement.