Should I lease or buy my dental office?
On this page
Most dentists should lease their first office in 2026 and consider buying once the practice is stable. A leasehold build-out typically takes 6 to 9 months from planning to opening, versus 9 to 18 months for ground-up construction (Dental & Medical Counsel). Buying makes sense when you'll stay 10+ years and can occupy at least 51% of the building.
Key facts
| Factor | Lease | Buy or build | Source |
|---|---|---|---|
| Time to open | 6–9 months (leasehold improvement) | 9–18 months (ground-up) | Dental & Medical Counsel |
| Typical commitment | 10-year lease, one or two 5-year renewals | Ownership | Curve Dental |
| Extra cost for land and site work | n/a | Adds 15–25% (ground-up) | Dental Strategy Institute |
| SBA 504 maximum | n/a | $5.5 million, fixed assets only | SBA |
| SBA occupancy rule | n/a | Occupy ≥51% (existing building) or ≥60% (new construction) | 13 CFR 120.131 |
| Building depreciation | Rent is deductible | Nonresidential real property: 39 years | IRS Pub. 946 |
Why do most startups lease?
Speed and cash. A leasehold build-out is "the most common route" and typically takes six to nine months, while a ground-up build takes 9 to 18 months (Dental & Medical Counsel). Every month before opening is a month of loan payments without revenue.
Leasing also lets the landlord fund part of the build-out through a tenant improvement allowance. Medical-office shell space averaged $92.50 per SF in TI in PwC's 2025 survey (PwC). See how much TI allowance to ask for.
And it keeps your bet smaller. A dental lender recommends starting with 1,500–2,000 SF and negotiating lease options for expansion (Panacea Financial). You learn your market before you commit to a building.
To turn these ranges into a number for your own project, the free build-out cost & timeline calculator (coming soon) is planned to combine square footage, operatory count and region into a budget and schedule.
What does a dental lease commit me to?
More than many first-time owners expect. Dental leases usually run ten years with one or two five-year renewal options (Curve Dental). Landlords require personal guarantees on new practice leases, and standard restoration clauses can require you to remove plumbing, cabinetry and specialized infrastructure at lease end (Dental & Medical Counsel). You will invest hundreds of thousands of dollars in plumbing, vacuum and cabinetry that you don't own, in a building you don't control.
Negotiate the renewal options, assignment rights (you will want to sell the practice one day), relocation clauses and restoration terms with a dental attorney before signing.
When does buying make sense?
Buying or building tends to work when:
- You plan to stay 10+ years. Owning turns rent into equity, and you control renewals, restoration and resale.
- The practice is established. Lenders and you both have real numbers to work with.
- You'll occupy most of the building. SBA real-estate loans require the business to occupy at least 51% of an existing building, or at least 60% of new construction (13 CFR 120.131). You can lease out the rest.
- You want room to grow. Building lets you design the plumbing and layout for future operatories.
Ground-up is the most expensive path. Dental Strategy Institute estimates land and site work add 15–25% for ground-up projects (Dental Strategy Institute), and Dental & Medical Counsel puts California ground-up construction at often $400 or more per SF, against $150–$350 for a leasehold improvement (Dental & Medical Counsel).
To test this on your own suite before paying for drawings, the free dream-practice builder (coming soon) is planned for sketching rooms, operatory counts and layouts.
How do dentists finance a building purchase?
Two SBA programs are the usual starting points (SBA 7(a); SBA 504):
| Program | Maximum | Covers | Notes |
|---|---|---|---|
| SBA 7(a) | $5 million | Real estate, improvements, working capital, equipment | Flexible use |
| SBA 504 | $5.5 million | Major fixed assets: land, buildings, long-life equipment | Cannot be used for working capital or inventory; 10-, 20- and 25-year terms; rate pegged to 10-year Treasuries |
Dental-specific lenders also finance real estate. Compare total cost, not just rate. More in how to finance a dental build-out.
How do taxes differ?
When you lease, rent is generally a business expense. When you own, the IRS depreciates nonresidential real property such as an office building over 39 years (IRS Pub. 946). Interior improvements and equipment can recover faster: for 2026, Section 179 allows up to $2,560,000 of expensing, phasing out above $4,090,000 of qualifying purchases (IRS Pub. 946), and qualified improvement property can be expensed under Section 179 (IRS Topic 704). Have your CPA model both paths for your situation.
Is there a middle path?
Yes. Many owners lease the first location, then buy a building later, often through a separate real-estate entity that leases to the practice. SBA rules contemplate this setup: when an "Eligible Passive Company" owns the building and leases it to one or more operating companies, those operating companies must meet the same 51% or 60% occupancy test (13 CFR 120.131). In practice, that means your dental practice, not an unrelated tenant, has to fill most of the building. If you plan to lease space to a specialist or a pharmacy, run the occupancy math before you make an offer. Another middle path is buying a condo unit in a medical office building. Either way, negotiate a purchase option or right of first refusal in your lease if you think you may want to own the building.
How FloorStack helps
FloorStack is a dental build-out platform that helps you compare paths before you commit. The Build-Out Cost Calculator (coming soon at /tools/build-out-cost-calculator) is planned to estimate construction and soft costs for a leasehold or ground-up project from your square footage and market. Then bring the numbers to your lender and CPA. Start at the Build a Dental Office hub, and see the build-out timeline and startup cost guides.
Free tools on the FloorStack dental build-out platform for this step: Dream-practice builder (free tool, coming soon).
Free tools for this step
- Build-out cost & timeline calculator (free tool, coming soon): estimate budget and schedule from your square footage, operatory count and region.
- Dream-practice builder (free tool, coming soon): sketch rooms, operatory counts and layouts on your own suite before you pay for drawings.
Frequently asked questions
Is it better to lease or buy a dental office?
For most startups, leasing is faster and needs less cash. Buying makes more sense for an established practice that plans to stay 10+ years and will occupy most of the building.
How long does a dental office lease usually last?
Usually ten years, with one or two five-year renewal options.
Can I use an SBA loan to buy a dental building?
Yes. SBA 7(a) loans go up to $5 million and 504 loans up to $5.5 million. The business must occupy at least 51% of an existing building or 60% of new construction.
How much longer does it take to build than to lease?
A leasehold build-out typically takes six to nine months; ground-up construction takes 9 to 18 months, per a dental law firm.
Do I have to remove my build-out when the lease ends?
Possibly. Standard restoration clauses can require removing plumbing and cabinetry. Negotiate this before signing.
Can my practice rent from a building I own?
Yes, commonly through a separate real-estate entity. Work with your CPA and attorney on the structure and SBA occupancy rules.
Sources
- Dental & Medical Counsel: A Dental Lawyer's Guide to Your Dental Office Build-Out
- Curve Dental: How to Start a Dental Practice, a Launch Sequence
- Dental Strategy Institute: How Much Does It Cost to Build a Dental Office in 2026?
- U.S. Small Business Administration: 504 Loans
- U.S. Small Business Administration: 7(a) Loans
- 13 CFR 120.131: Leasing Part of New Construction or Existing Building to Another Business
- IRS Publication 946: How to Depreciate Property
- IRS Topic 704: Depreciation
- PwC Investor Survey, Q2 2025 (PDF)
- Panacea Financial: 12 Tips for Starting Your Own Dental Practice
More in Build a Dental Office
- Dental Office Build-Out Cost per Square Foot (2026)Dental office build-outs run about $150–$400 per sq ft in 2026, and a full startup averages near $1M. See what drives the range and how to budget yours.6 min read
- How Much Does a Dental Operatory Cost? (2026)Building one dental operatory costs about $35K–$55K before equipment in 2026, and $90K–$140K turnkey. See what's included and how to phase extra rooms.6 min read
- How Long Does a Dental Office Build-Out Take? (2026)A dental office build-out in leased space takes about 6–9 months in 2026; ground-up builds take 9–18. See each phase, what causes delays and what to do first.6 min read
- How to Build a Dental Office: The 12-Phase Startup RoadmapOpening a dental practice from scratch takes about 9 to 12 months in 2026. Follow 12 phases, from financing and lease to permits, credentialing and opening.6 min read
- Startup vs Acquisition: Which Dental Path Costs Less Over 5 YearsBuying a practice or starting one in 2026? Compare price-to-collections data, startup build-out budgets, ramp-up risk and the hidden costs on each side.6 min read
- Dental Startup Consultant's Master ChecklistA 2026 master checklist for dental startup consultants: entity, financing, site, lease, design, permits, equipment, IT, HIPAA, credentialing, hiring, opening.6 min read