Real Dentist Earning?

[charlestweed]

for those of you who own a practice but are tenants...what can you do to have some control over maintaining a reasonable rent? what keeps the landlord from raising your rates? i would imagine it's very difficult to move a practice once you are established (which I'm sure the landlord recognizes), leaving you at a major disadvantage while negotiating.

so what i guess i'm getting at is: what are typical terms to a lease regarding years, and what are your options once that lease expires?

At my first office (used to be an OBGYN office), my 5-year lease contract expired 2 years ago. The landlord’s management company called me and asked if I wanted to renew the lease. After I said yes, they faxed me a 2-page renewal contract and I signed it. I love this landlord because he (who is a retired engineer) hires a management company. Whenever there is the problem with the plumbing or the AC unit, the management company sends someone to fix the problem right away.

At my second office (which I started from scratch), the 5-year lease contract expired about 3 years ago. Neither the landlord nor I called each other to renew the contract. So it is now pretty much month-to-month lease and I’ve been enjoying the same low monthly rate of $2059/month for the past 3 years.

At the third office (which I bought from a retired orthodontist), I signed a 7-year lease contract. I’ve only been at this location for 3 years so I don’t know what the landlord will do when the contract expires. There is an empty 600sf suite right next door. This landlord has begged me to lease this space (for a very good deal) but I said no.

Many landlords don’t have 100% ownership of the building. Many of them had to take out loans to purchase the buildings. When the tenants leave, the landlords will have the problem paying the monthly mortgage. This is why many landlords like to rent the spaces to the dentists and doctors because they are most stable and most reliable tenants.

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[charlestweed]

What city are you living in?

In Southern California….not very far from Western University dental school.

 

[UnimaasMED]

Hi hear you Demeter. The last time I checked, 82% of every dollar I pay back on student loans right now goes to paying off interest

Can't u deduct the interest from taxes?

 

[DrJeff]

Can't u deduct the interest from taxes?

If your modified adjusted gross income is less than 75k for a single filer or 150k for joint filers under the current guidelines you can deduct upto $2500 of loan interest paid from your taxable income.

Most dentists don't get to take advantage of this

 

[davaidavai1]

If your modified adjusted gross income is less than 75k for a single filer or 150k for joint filers under the current guidelines you can deduct upto $2500 of loan interest paid from your taxable income.

Most dentists don't get to take advantage of this

 

[yappy]

Charlestweed,

From another post you put up in a public thread - that I'm too lazy to find - I ran some numbers of yours.

You said you had ~15 ortho starts per month at 5k a piece with a 35% overhead.

15*5,000*0.65 = $48,750.00

That is your gross monthly income? Or am I missing something? Are you kidding me?

In Southern California….not very far from Western University dental school.

 

[Cold Front]

Charlestweed,

From another post you put up in a public thread - that I'm too lazy to find - I ran some numbers of yours.

You said you had ~15 ortho starts per month at 5k a piece with a 35% overhead.

15*5,000*0.65 = $48,750.00

That is your gross monthly income? Or am I missing something? Are you kidding me?

Just noticed few things in your post (I'm not an orthodontist).

1. In this day and age, no orthodontist collects 100% of the treatment from his/her patients at the start of treatment. Most of the patients get into a payment plan with about $1,000 or more down to start the case. Essentially, in your example (and mine), the orthodontist might be collecting $15k from those new patients, along with 100's of monthly fees from on-going cases, maybe $150 from 600 other patients from various offices ($90k). So the office might be collecting $100k a month in this example.

2. IMO, overhead for orthodontists, is very different than most other dental offices. Payroll for 3-4 experienced DA's and 2 front desk staff can easily add upto $20k a month (including payroll tax). Rent, CAM, taxes, insurances, utility for 2-3 locations (which many orthodontists operate on) can be another $10k on the low end. Supplies, lab bills, marketing, etc will also easily come in around $10k for the month. You will still have miscellaneous costs, and will soon realize the overhead will be around $40-50k a month. Still a good number if you have the business to pull $100k a month.

3. There are cycles in any given year for the # of cases you do each month. December versus April. This applies to overhead as well. So, the word "average" might be what you are looking for.

4. $5k treatment is not a static number. In reality, many orthodontists do incentives to reduce treatment fees. Cash vs Financing, etc.

5. There a lot more practice-owner GP's (let alone specialists) that make $50k/month than most people realize. Their accountants get very creative with the actual numbers and provide a much smaller number for uncle sam.

 

[TheOralFixation]

1. In this day and age, no orthodontist collects 100% of the treatment from his/her patients at the start of treatment. Most of the patients get into a payment plan with about $1,000 or more down to start the case. Essentially, in your example (and mine), the orthodontist might be collecting $15k from those new patients, along with 100's of monthly fees from on-going cases, maybe $150 from 600 other patients from various offices ($90k). So the office might be collecting $100k a month in this example.

2. IMO, overhead for orthodontists, is very different than most other dental offices. Payroll for 3-4 experienced DA's and 2 front desk staff can easily add upto $20k a month (including payroll tax). Rent, CAM, taxes, insurances, utility for 2-3 locations (which many orthodontists operate on) can be another $10k on the low end. Supplies, lab bills, marketing, etc will also easily come in around $10k for the month. You will still have miscellaneous costs, and will soon realize the overhead will be around $40-50k a month. Still a good number if you have the business to pull $100k a month.

 

[charlestweed]

Charlestweed,

From another post you put up in a public thread - that I'm too lazy to find - I ran some numbers of yours.

You said you had ~15 ortho starts per month at 5k a piece with a 35% overhead.

15*5,000*0.65 = $48,750.00

That is your gross monthly income? Or am I missing something? Are you kidding me?

If I charged $5k a case, the number of ortho starts per month at my office would be zero. I’d have to close my business and I wouldn’t be sitting here writing how awesome this orthodontic specialty is. If you only have 15 starts a month (which means that you only have 350-400 active patients), you only need to work 7-8 days a month. I currently work 11-12 days/month to take care of my 700+ active patients.

My overhead is between 40-45% because my fee is low. If the fee was $5k a case, my overhead would be between 30-35%.

Another reason that I charge much less than $5k a case is I don’t feel I deserve to get paid that much…for doing so little. My GP, endo, OS, perio colleagues work a lot harder (both physically and mentally) than me and they make the same or less. Ortho procedures aren’t as complicated as other dental procedures.

That’s just the income from working 11-12 days/month at my own practice. I also work 11 days/month for a dental chain.

 

[Cold Front]

If I charged $5k a case, the number of ortho starts per month at my office would be zero. I’d have to close my business and I wouldn’t be sitting here writing how awesome this orthodontic specialty is. If you only have 15 starts a month (which means that you only have 350-400 active patients), you only need to work 7-8 days a month. I currently work 11-12 days/month to take care of my 700+ active patients.

My overhead is between 40-45% because my fee is low. If the fee was $5k a case, my overhead would be between 30-35%.

Another reason that I charge much less than $5k a case is I don’t feel I deserve to get paid that much…for doing so little. My GP, endo, OS, perio colleagues work a lot harder (both physically and mentally) than me and they make the same or less. Ortho procedures aren’t as complicated as other dental procedures.

That’s just the income from working 11-12 days/month at my own practice. I also work 11 days/month for a dental chain.

Charles,

Why not open another office instead of working for another chain? Isn't there a conflict of interest between the chain and your office business, assuming they are both in the same city?

Also, this is a good time to buy a real estate property, why not just buy a building or buy out your landlord? I'm doing something imilar right now.

 

[charlestweed]

Charles,

Why not open another office instead of working for another chain? Isn't there a conflict of interest between the chain and your office business, assuming they are both in the same city?

Also, this is a good time to buy a real estate property, why not just buy a building or buy out your landlord? I'm doing something imilar right now.

Opening up another satellite office now means that I will lose some of my income because I have to cut down my associate days at the dental chain. Having a new office right now means that I have to go from door to door to talk to the new referring GPs…..this is something I really hate to do and I haven’t done this for the past 3-4 years. Buying a commercial building now means that I have to take out more loans. More new loans mean I have to work longer to pay them off.

I’ve worked 5-6 days a week for the past 10+ years and I am getting tired. I just want to pay off the only debt I have left (my home mortgage) and leave my associate job as soon as I can. This long recession has taught me a very valuable lesson…..stop spending, start saving, and live within your means.

 

[Cold Front]

Opening up another satellite office now means that I will lose some of my income because I have to cut down my associate days at the dental chain. Having a new office right now means that I have to go from door to door to talk to the new referring GPs…..this is something I really hate to do and I haven't done this for the past 3-4 years. Buying a commercial building now means that I have to take out more loans. More new loans mean I have to work longer to pay them off.

I've worked 5-6 days a week for the past 10+ years and I am getting tired. I just want to pay off the only debt I have left (my home mortgage) and leave my associate job as soon as I can. This long recession has taught me a very valuable lesson…..stop spending, start saving, and live within your means.

My lease is due for renewal is 3-4 yrs, and my rent will go up 13% minimum, variable CAM could go up as well. As someone who just started his career, with 25 more years to practice minimum, this is the time to save for the future by making sound investments.

I found this piece of land at a prime corner lot within my shopping complex, about half-acre in size. The seller is selling it cheap enough that I can purchase the land within my means today. Seller agreed to finance the purchase, so I don't have to go to a bank and get into credit based debt. I would simply sit on the lot for next 3 yrs, and develop it in my last year of my current space lease, the land would be fully mine by then.

When developed, the building would accommodate my office plus 1-2 more retail shops. The rent from the retail shops would cover the financing cost from the development, and my bigger office in the building would be rent free, a saving of $70k/yr rent over 20 yrs, more with inflation. The value of the building (and my practice) when paid off are tangible for retirement.

I still think we are in era where you can name your own price when it comes to commercial property, for most places.

 

[Daurang]

If I charged $5k a case, the number of ortho starts per month at my office would be zero. I'd have to close my business and I wouldn't be sitting here writing how awesome this orthodontic specialty is.

Another reason that I charge much less than $5k a case is I don't feel I deserve to get paid that much…for doing so little. My GP, endo, OS, perio colleagues work a lot harder (both physically and mentally) than me and they make the same or less. Ortho procedures aren't as complicated as other dental procedures. .

Let's be honest. You're in a hypersaturated market serving ethnic clientelles that simply refuse to pay more than $2000. There are just too many dentists there doing cleanings for $5, fillings for $20, crowns for $300, deep cleans for $200, braces for $2k. But hey the weather is great!

If you had moved elsewhere instead of staying in California, you'd be retired by now?

 

[TheToothsayer]

The bottom line is dentists make good money. If you're going into dentistry or any profession just for money, you're doing the wrong thing. Be passionate about what you do. You will not be a successful dentist if all you want is money. Money will not bring you happiness. Life satisfaction, family, and a good lifestyle will. Dentistry will enable you to obtain this, but it will not hand it to you.

That being said, as everyone else has pointed out, dentists make different amounts depending on their position, private practice vs public, location, patient pool, clinical ability, people skills, etc.

Dentistry is not a salaried profession in most cases. It's hard to tell.

 

[charlestweed]

Let's be honest. You're in a hypersaturated market serving ethnic clientelles that simply refuse to pay more than $2000. There are just too many dentists there doing cleanings for $5, fillings for $20, crowns for $300, deep cleans for $200, braces for $2k. But hey the weather is great!

If you had moved elsewhere instead of staying in California, you'd be retired by now?

I agree with you that it’s harder to retire early in CA but it is not because of the oversaturation of dentists and specialists. Just keep the overhead low and the problem is solved. People, who refuse to pay $5k for their children’s orthodontic tx, don’t mind seeing the orthodontists that have low tech offices...It's the results that count. Low fees help increase the patient acceptance and the office production. I don’t mind charging less and get all the chairs filled with patients. The patients usually view an office that has empty lobby as an unsuccessful practice. Would you eat at a restaurant that has very few customers? It’s actually more stressful for me to sit around doing nothing and pay the bill.

It’s harder for dentists in CA to retire early because there are just more expensive things to spend in CA…. more places to hang out, pricier restaurants, more luxury cars, more expensive homes etc. It is extremely rare to see a Mercedes S-class in places like Paducah, Kentucky or Juneau, Alaska. A decent 4 bed 2 bath house in Orange county, CA will cost you $600-700k.

It’s not what you make but what you keep (The Millionaire Next Door).

 

[CaliDDS1986]

Great post

I agree with you that it’s harder to retire early in CA but it is not because of the oversaturation of dentists and specialists. Just keep the overhead low and the problem is solved. People, who refuse to pay $5k for their children’s orthodontic tx, don’t mind seeing the orthodontists that have low tech offices...It's the results that count. Low fees help increase the patient acceptance and the office production. I don’t mind charging less and get all the chairs filled with patients. The patients usually view an office that has empty lobby as an unsuccessful practice. Would you eat at a restaurant that has very few customers? It’s actually more stressful for me to sit around doing nothing and pay the bill.

It’s harder for dentists in CA to retire early because there are just more expensive things to spend in CA…. more places to hang out, pricier restaurants, more luxury cars, more expensive homes etc. It is extremely rare to see a Mercedes S-class in places like Paducah, Kentucky or Juneau, Alaska. A decent 4 bed 2 bath house in Orange county, CA will cost you $600-700k.

It’s not what you make but what you keep (The Millionaire Next Door).

 

[newyorkblork]

I agree with you that it’s harder to retire early in CA but it is not because of the oversaturation of dentists and specialists. Just keep the overhead low and the problem is solved. People, who refuse to pay $5k for their children’s orthodontic tx, don’t mind seeing the orthodontists that have low tech offices...It's the results that count. Low fees help increase the patient acceptance and the office production. I don’t mind charging less and get all the chairs filled with patients. The patients usually view an office that has empty lobby as an unsuccessful practice. Would you eat at a restaurant that has very few customers? It’s actually more stressful for me to sit around doing nothing and pay the bill.

It’s harder for dentists in CA to retire early because there are just more expensive things to spend in CA…. more places to hang out, pricier restaurants, more luxury cars, more expensive homes etc. It is extremely rare to see a Mercedes S-class in places like Paducah, Kentucky or Juneau, Alaska. A decent 4 bed 2 bath house in Orange county, CA will cost you $600-700k.

It’s not what you make but what you keep (The Millionaire Next Door).

It's both? If you are working your tail off filling your schedule at a fourth of the price as a guy doing the same thing in a rural area, as well as spending more on luxury cars and expensive homes, you're losing in two ways.

 

[charlestweed]

It's both? If you are working your tail off filling your schedule at a fourth of the price as a guy doing the same thing in a rural area, as well as spending more on luxury cars and expensive homes, you're losing in two ways.

Lower fee allows more patients to afford the treatments that you recommended. Higher volume of patient will allow you to earn the same net income as the guy who practices in rural area. Higher volume of patients also allows you to hire in-house specialists, who will help you generate additional income. The more patients you have at your office, the higher number of people who will know about your practice, and the more referrals you will get (word of mouth is key). You also gain more experience from treating high volume of patients…..you will see more difficult cases, you will gain speed etc. I've seen more difficult ortho cases (such as impacted canine and orthognathic cases) than many my colleagues, who practice in rural areas because my practice has a lot more active patients than theirs.

If your office gets so busy, you can always hire an associate, who desperately need job in CA. For me, I only have to hire an additional ortho RDA. The key is to keep the overhead low. Be honest and do good work. Your patients will refer their friends and relatives to your office.

 

[Frank22]

I agree with you that it’s harder to retire early in CA but it is not because of the oversaturation of dentists and specialists. Just keep the overhead low and the problem is solved. People, who refuse to pay $5k for their children’s orthodontic tx, don’t mind seeing the orthodontists that have low tech offices...It's the results that count. Low fees help increase the patient acceptance and the office production. I don’t mind charging less and get all the chairs filled with patients. The patients usually view an office that has empty lobby as an unsuccessful practice. Would you eat at a restaurant that has very few customers? It’s actually more stressful for me to sit around doing nothing and pay the bill.

It’s harder for dentists in CA to retire early because there are just more expensive things to spend in CA…. more places to hang out, pricier restaurants, more luxury cars, more expensive homes etc. It is extremely rare to see a Mercedes S-class in places like Paducah, Kentucky or Juneau, Alaska. A decent 4 bed 2 bath house in Orange county, CA will cost you $600-700k.

It’s not what you make but what you keep (The Millionaire Next Door).

Unless I'm mistaken, the high expenses of living in California are partially negated by a higher income (I believe that the higher income still isn't enough to make dentists in California earn relatively as much as their Midwest and Southern peers but certainly makes things less difficult than many popularly believe).

I know general dentists in California that have six-million dollar homes!