Deciding on premises

Buying or leasing premises may allow you to start work in your new practice sooner than if you build, and can reduce your initial costs.

To get started, talk to real estate agents about:

• potential properties - if you find a property that suits your needs but is already occupied, consider approaching the agent with an offer, as the current occupants might be thinking of moving out
• current commercial leasing valuations, including packages on offer.

Assessing a building’s suitability

Before you commit to buying or leasing a particular building, ask the local council about zoning regulations, car parking requirements, and approval processes for operating a general practice.

When assessing a potential building, consider:

• Accessibility:
  • ease of access for ambulances and taxis
  • car-parking for staff and patients: is there enough parking on the premises (as a guide, aim for five car spaces per consulting room)? Is other parking readily available on the street or nearby (eg at a supermarket), and will patients have to pay for it? Is there space to extend the on-site parking? Have you checked the local council’s car parking requirements?
  • public transport for staff and patients: how easy is it for them to get to and from the closest public transport stops and stations? Are there any proposed or planned changes (eg rerouting of bus routes, significant infrastructure work) that would affect this?
• Nearby services:
  • ​patients’ access to other health facilities, such as allied health professionals, pathologists, radiology, pharmacies, hospitals, aged care facilities, disability services
  • patients’ and staff’s access to other services, such as childcare, schools, shops
• Visibility:
  • Is it in a shopping centre, adjacent to public transport, or out of sight? Is there a shop front where passing traffic can see signs? High visibility means your premises are easy for people to find, and easy for potential patients and staff to notice and become aware of.
• Potential for co-location:
  • Give serious consideration to the potential to co-locate your practice with other health care providers, such as allied health and mental health professionals and medical specialists. Ideally, choose premises that already have co-located services or have adequate space for them.
    Co-locating with other health professionals can increase patients’ awareness of your practice, and make it more convenient for them to visit multiple services. It can also increase mutual referrals.

Buying premises

Before buying premises, consider:

• the terms and conditions of the sale contract, including any specifications
• your need for finance, the availability of loans, and associated costs (such as interest you will pay, mortgage insurance, conveyancing and other professional fees, loss of interest from your savings)
• building regulations, especially if you are considering changing the interior or exterior
• the work, cost and time required to fit-out the space as a general practice
• what you plan to do with the practice and premises when you decide to move on.

Leasing premises

Before leasing premises, consider:

• the current rent and possible rental increases
• the potential to negotiate your lease to include, for example, an initial rent-free period and a portion of the fit-out costs
• the terms and conditions of the lease contract, including notice period, length of the lease, options to renew the lease, what is and what is not covered by the lease (eg insurance, rates, maintenance)
• the amount of work and cost required to fit-out the space as a general practice, or to upgrade an existing fit-out.

Fit out

Whether you build, buy, or lease premises, you may need to fit-out the space so that it can function as a general practice, or you may want to upgrade an existing fit-out.

There are companies that specialise in medical fitouts who can:

• identify and develop the spaces and facilities you need
• ‘look past the walls’ and visualise new rooms and areas in the short-term and the long-term
• provide expert advice to help you manage government and council building codes and zoning regulations
• supervise the planning and construction.

If you are leasing, you will also need to consider the time and cost to return the premises to the original condition at the end of the lease, if this is a condition of the lease.

Although it could take 12 months or more to design, construct and commission your practice as well as obtain all the necessary permits, building a new practice means that you and others will be working in a facility that is tailored to your vision and needs, and that will be useful for many years.

Before deciding to build:

• check whether there are any plans for purpose-built developments in the area that might be suitable for a general practice
• talk with other practice owners to understand what has and has not worked for them. Many practice owners find that they outgrow the space they only recently designed, or that they can’t deliver the sort of healthcare they wanted to because their premises do not accommodate their new and anticipated needs.

Consider your long-term plans and build with flexibility in mind. Consulting with a builder, draftsperson or architect can help you to design premises that cater for your immediate, medium-term and long-term needs. Think about whether you might want to expand the premises, or re-locate and take equipment and other fittings. In addition to having knowledge of required building codes, these specialists are experienced in creating workspaces from a client’s brief.

What size premises will you need?

When calculating the size of the premises you will need, consider:

• functional spaces (eg consulting rooms, waiting areas, office and reception areas, toilets, staff tea-room)
• connecting spaces (corridors, entranceways, stairs)
• storage areas
• whether you are proposing a single or multi-level construction.

Guidelines

Use these guides to calculate the area you are likely to need:

• building: 250 m² for a practice with four consulting rooms
• carpark: 850 m² for 25 cars
• land size: 1100 m² for a four-room practice with car spaces.

Fees and taxes

Identify the fees and taxes associated with purchasing a property, such as:

• council rates: municipal councils charge rates on property improved values. If you own or lease a property, you will need to pay council rates
• land transfer duty (also known as stamp duty): this fee is payable to state revenue offices on the transfer of land
• land tax: a state tax calculated on the value of land, this is payable by the owner of the practice’s property.

Consult with your local council so you can find out about, and comply to, all relevant building regulations. This is important even if you think you know what’s required, not only because regulations are complex, but because they often change, and non-compliance can expose you to substantial risk and loss.

Find and work with a reputable architect and builder who is familiar with medical practices, as you will also need to adhere to regulations that are specific to medical premises, such as those relating to electrical circuits, piped oxygen, nitrous, and hazardous goods.

If you have found a site that you like, check for any proposed or planned developments in the vicinity that might affect your practice.

Although the construction of new premises can be costly, it does allow you to tailor your new practice to your exact specifications and needs.

Seek professional advice and prepare a thorough budget that includes a contingency fund to cover unexpected expenses. A quantity surveyor can also give accurate advice on construction costs. To find a quantity surveyor, visit the Australian Institute of Quantity Surveyors website.

Estimates of construction costs are based on the quantities of various trade items, the labour involved, and expenses that may be incurred. There are three types of construction estimates (calculable at different stages of construction), allowing you to work with increasingly accurate estimates as your requirements:

• Feasibility estimate, in the early stages. This is an approximation of the cost of a project for budgeting and planning purposes. Based on concept sketches or designs, it allows you to determine if a project is financially feasible without paying for the preparation of detailed design and documentation pre-construction. 
• Budget cost estimate. This is an estimate of what the project’s cost, based on preliminary designs and documentation. It is usually given at the beginning of the design process.
• Tender cost estimate, when you are ready to build. This is a detailed estimate of the cost, based on a clearly defined project scope and a complete and detailed design. It is prepared by determining the cost of all specified requirements necessary for acceptable completion of the work.