Reviewed September 26, 2026.

For a dentist planning a start-up, relocation, practice acquisition or second location, one of the most important decisions is whether to purchase the clinic property or lease commercial space.

In many cases, buying the right property can be financially stronger over the long term.

A dentist who purchases the real estate makes mortgage payments toward an asset they may ultimately own. In some properties, rent may be comparable to certain ownership payments, but this must be tested using actual financing terms, taxes, maintenance and capital requirements. At the end of a lease, the real estate remains the landlord’s asset.

However, buying is not always possible.

The right property may not be available for sale in the location where the practice needs to operate. The available property may not satisfy zoning, parking, access, visibility or construction requirements. In those circumstances, leasing may be the more practical path—even when ownership would otherwise be preferred.

The decision should therefore begin with the location and the practice strategy, not with a general assumption that leasing is more affordable.

The Cost of Construction and Equipment Exists Either Way

One of the most important points in this comparison is that dental construction and equipment costs generally do not disappear when the premises are leased.

Whether a dentist buys or leases, the clinic may still require substantial investment in:

plumbing and drainage;

electrical capacity;

HVAC;

treatment rooms;

sterilization areas;

cabinetry and millwork;

flooring and finishes;

accessibility improvements;

dental equipment;

technology;

signage;

permits;

and professional fees.

A leased location may sometimes include a tenant-improvement allowance from the landlord, but that allowance may cover only a portion of the total build-out and may be reflected in the rent or lease structure.

Therefore, the comparison should not be:

Buying requires construction, but leasing does not.

The more accurate comparison is:

In both cases, the dentist may need to fund the clinic build-out and equipment. The major difference is whether the ongoing occupancy payments build equity in a property or remain rent paid to a landlord.

Why Buying May Be the Preferred Strategy

Purchasing the clinic real estate may provide several long-term advantages.

1. Building Equity

The principal portion of mortgage payments reduces the loan balance and can build equity; interest and other ownership costs remain expenses.

Over time, the dentist may build equity through principal repayment and potential appreciation in the real estate.

With leasing, the rent supports the landlord’s investment rather than creating a property asset for the dentist.

2. Greater Control

Ownership can provide greater control over:

renovations;

clinic layout;

signage;

operating hours;

future expansion;

building improvements;

and the duration of occupancy.

A tenant remains subject to the lease terms and, in many cases, the landlord’s consent.

3. Reduced Renewal Risk

A leased dental clinic may become highly dependent on remaining in the same location.

After investing heavily in construction, equipment installation, branding and patient acquisition, relocating the practice can be expensive and disruptive.

At the end of the lease term, the tenant may face:

higher rent;

difficult renewal negotiations;

changes in lease conditions;

redevelopment risk;

demolition or relocation provisions;

or a landlord who is unwilling to offer acceptable renewal terms.

Ownership reduces many of these occupancy risks.

4. A Separate Long-Term Asset

The real estate may eventually become a separate investment from the dental practice.

A dentist may later:

sell the practice and retain the property;

lease the premises to the practice buyer;

earn rental income;

use the equity for another investment;

or sell the practice and property together.

This can create more flexibility when planning retirement, succession or the eventual sale of the practice.

Financing Can Make Ownership Achievable

Many qualified dentists can access specialized financing for:

dental practice acquisitions;

commercial real estate;

equipment;

and clinic construction.

The lending structure for the real estate may be different from the financing used for the practice, equipment or working capital.

This means purchasing a property does not necessarily require the dentist to pay the full cost in cash.

However, financing availability and terms depend on factors such as:

the dentist’s financial profile;

projected or existing practice revenue;

down payment;

property value;

appraisal;

debt-service capacity;

location;

and lender underwriting.

Financing should therefore be investigated early—before assuming that leasing is the only affordable option.

When Leasing May Still Be the Practical Choice

Leasing may make sense primarily when the right property is not available to purchase or when the practice needs to prioritize a specific location.

For example:

1. The Desired Location Is Not Available for Sale

The dentist may need to be near:

a particular patient population;

a growing residential community;

a medical centre;

a retail plaza;

schools;

transit;

or a referral network.

If suitable properties in that area are available only for lease, leasing may be the only realistic way to enter the market.

2. The Available Properties Are Operationally Unsuitable

A property offered for sale may not have:

adequate parking;

sufficient electrical capacity;

suitable plumbing access;

proper ceiling height;

accessible entry;

adequate visibility;

or the necessary zoning.

Buying the wrong property simply to become an owner can be more damaging than leasing the right location.

3. Timing Is Critical

A dentist acquiring a practice or relocating may need to take possession within a specific timeframe.

Purchasing real estate can involve:

financing conditions;

environmental review;

building inspections;

zoning review;

appraisal;

and a longer closing process.

A lease may occasionally allow the clinic to secure the location and begin construction sooner.

4. The Dentist Is Not Ready for a Long-Term Location Commitment

A dentist who is uncertain about:

the target market;

future practice size;

partnership structure;

or long-term geography

may prefer leasing until the practice strategy becomes clearer.

Even in this situation, the lease must provide sufficient security, renewal rights and flexibility to justify the investment in the clinic.

A Lease Must Protect the Value of the Dental Practice

Because the dentist may invest heavily in the leased premises, the lease is not merely an occupancy document.

It can directly affect the future value and saleability of the practice.

Important provisions may include:

permitted dental use;

exclusivity;

lease term;

renewal options;

assignment rights;

landlord consent;

demolition clauses;

relocation clauses;

signage;

parking;

additional rent;

repair obligations;

restoration requirements;

and the ability to transfer the lease when the practice is sold.

A successful dental practice operating under a weak or short-term lease may become more difficult to sell.

The Property Must Work as a Dental Location

Whether the dentist buys or leases, the property must be suitable for the intended use.

The review should include:

zoning and permitted use;

parking;

patient accessibility;

visibility;

surrounding demographics;

competition;

signage;

construction feasibility;

plumbing;

electrical capacity;

HVAC;

building condition;

accessibility requirements;

and future expansion.

Ownership does not correct a poor location.

Leasing does not correct a poor location either.

The best real estate strategy begins by identifying a property that supports the practice operationally and financially.

Compare Ownership and Leasing Properly

A professional comparison should include the complete economics of both options.

Ownership costs may include:

down payment;

mortgage payments;

property tax;

insurance;

maintenance;

repairs;

due diligence;

legal fees;

appraisal;

environmental review;

and closing costs.

Leasing costs may include:

base rent;

additional rent;

HST;

annual rent increases;

leasehold improvements;

legal fees;

maintenance obligations;

restoration costs;

and renewal risk.

The comparison should also consider what remains after ten or fifteen years.

Under ownership, the dentist may have accumulated equity in the property.

Under leasing, the dentist may have paid a similar level of occupancy cost without acquiring the real estate.

Choose the Property and Financing Together

When a suitable property is available for sale and the dentist can obtain sustainable financing, purchasing the clinic location may offer stronger long-term economics, control and security.

Leasing is often selected not because it eliminates construction or equipment costs, but because:

the required location is available only for lease;

the dentist needs greater short-term flexibility;

timing makes leasing more practical;

or the properties available for purchase are not suitable for dental use.

The right decision requires evaluating the practice, the financing, the location and the real estate together.

Plan Your Dental Location Strategy

Planning a dental start-up, relocation, practice acquisition or second location?

Book a Dental Practice & Location Strategy Consultation to compare available properties, ownership and leasing costs, financing readiness, zoning and site feasibility before making a commitment.

Kian Mousavi, Broker

Royal LePage Signature Realty

416-616-2002

This content is provided for general information only and does not constitute legal, financing, accounting, tax, construction or zoning advice. Financing remains subject to lender qualification and approval. Buyers and tenants should obtain independent professional and municipal advice.

Further reading

• BDC: Buying or leasing commercial real estate
• RBC: Financial planning for dentists
• City of Toronto: Zoning Use Review