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PRACTICE MANAGEMENT
Real Estate: Three Common Mistakes Healthcare Professionals Make
By Fred Schaard
Carr Healthcare Realty
Real estate is the second highest expense behind payroll for most healthcare practices. The benefits of capitalizing during lease negotiations can include a healthy raise through increased profitability, reduced debt, a nicer office and more. On the contrary,
if negotiations are not handled properly, the results can be decreased profitability; resulting in the need to produce tens to hundreds of thousands of additional dollars just to pay the same bills that should have cost dramatically less.
While there are many key concepts and strategies you should always do prior to and during any lease or purchase negotiation, there are an equal or greater number of mistakes you should avoid. Having represented thousands of healthcare professionals over the last decade, we have gathered some of the most common mistakes healthcare professionals make during lease and purchase negotiations with the goal of helping others avoid the same mistakes. Here are three of the most common mistakes:
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1. Believingthelandlordorsellerwill simply offer their best terms
Landlords and sellers are in business to make money. They are no more likely to voluntarily reduce lease rates or give up any extra money through concessions as you would be to voluntarily reduce your reimbursement from an insurance company or cut your patient fees if you didn’t have to. While it sounds pleasant to hear a landlord talk about giving a ‘fair deal’ or ‘reasonable price’, your odds of getting either are bleak without truly understanding the market, entering the negotiation process with multiple other options and having the needed guidance to capitalize. Trusting a landlord or seller without the help of professional representation will most likely result in the forfeiture of tens to hundreds of thousands of dollars that could have stayed in your checking account. Case and point: if you were about to sell your home and a fair price was $400,000... but your agent told you a buyer would pay $500,000... what would you list or sell it for? The “fair” price of $400,000... or the most you could get for it? Exactly. You would sell it for the most you could. Your landlord will treat you the same way. They will charge you the highest they can while giving you the least they can get away with.
DECEMBER 2021/JANUARY 2022 | WWW.OCMS-MI.ORG