ABA Centers: Rent, Buy, or Build?

In our discussions with our wide range of customers, the topic of ABA Centers’ option to rent, buy or build comes up often. This is an eternal dilemma for ABA business owners, so Motivity took the time to look into it and share the story of one of our customers who recently made the difficult decision to build a center! But first, let’s discuss the pros and cons of renting, buying, and building and why they chose to build.

Why Rent?

There are definitely pros to renting:

• Renting is a good decision if you are not sure exactly what you want, need to get into a place as soon as possible, or do not have the upfront capital to purchase. 
• Renting also helps build your credit if you are a new business and could increase your cash flow at the expense of equity. 
• Renters do not have the headache of having to make repairs. 
• See an area where you want to be but can’t stomach the high purchase prices? Renting may give you a more affordable option.
• Some landlords will even pay your utilities.
• Need to move out fast? Renters need to pay attention to a lease, but it is probably easier to exit a rented space over one that you own.

However, there are a few cons too:

• When you rent, making alterations to the building to suit your business model is difficult at the very least. 
• And what do you do if damage is done to the building? Most clinics have at least one client who engages in property destruction.
• Renters might need to make the challenging decision between the perfect building and the perfect location.
• Did you budget just enough for your rent? Be prepared for an increase when your lease is ready for renewal.
• While you aren’t responsible for the repairs on the property, you may need to wait for the landlord to get someone to take care of it and be satisfied with the repair, even if it’s not how you would have handled it.

Why Buy?

You think you want more flexibility and decide to buy. There are some upsides to this:

• Two words: Tax Deduction. There are some great tax deductions you can get when you own property including your mortgage and property depreciation.
• Owners can make most adjustments to their buildings as their hearts desire (although not all since you still have to follow building codes and local ordinances).
• Have extra space? YOU can be the landlord and rent it out for a little extra income.

But there are downsides too:

• Purchasing property is not something that behavior analysts know how to do well (unless in their former careers, they were commercial real estate agents), so be prepared to put aside some money in brokers’ fees.
• You’ve just made a huge financial commitment and the building is still not what you want. Now you need to make a plan for improvements and alterations.

Why Build?

Let’s say you have the money (or the ability to get a good loan) and you know exactly what you want. Maybe your best option is to find some property and build! This could be your dream clinic but be prepared for unexpected costs and delays. Are you interested in how one ABA company managed to pull it off? Check out what Motivity customer, Strong Foundations, was able to achieve!

Strong Foundations is the brainchild of three BCBAs – Ashley Hooks, Karma Flotkoetter, and Kellianne Montgomery. Strong Foundations was founded on providing quality and ethical ABA services to children diagnosed with Autism Spectrum Disorders and other disabilities.

Initially, the entire company was comprised of the 3 founders, and they provided ABA services within a handful of clients’ homes. After growing interest in their services, they began renting a small room from a chiropractic office. At that time, they began to again have greater interest and began searching for some assistance by hiring a few direct care staff. Over the past 6 years, they have continued to grow rapidly. Today, they have approximately 35 staff members and about 50 clients, many of whom have severe problem behaviors. Strong Foundations makes it a policy to never turn away those with the greatest need.

The Strong Foundations crew moved into their current building in 2017. They were renting the space and quickly outgrew it, needing to expand by adding a building in 2018 and then including another space in the same strip mall to further meet their needs. As they were looking into the future, they were concerned about the high cost of rent in their area. When shopping around, not only could they not find a building that perfectly met their needs, but those that were just adequate were way out of their price range! Purchasing land and building to suit was the logical thing to do.

As they often do in other areas, the owners of Strong Foundations decided to think out of the box and explore financing options that they could afford. They were concerned that it would be difficult to get such a large loan from the bank, so they sought owner-financed property. With the help of a local contractor, they were able to take the next step.

Suddenly faced with a blue sky of possibilities, the leaders needed to narrow down what they actually wanted. Ashley, Karma, and Kelli each drew a picture of their ideal center. They also asked staff and even clients for their preferences. One client drew a picture that is very close to the final design! They consulted with staff who had an eye for design. Armed with this information, the leadership worked with an architect to get a final vision.

As you might expect, not everything went according to plan. There were budget overages as vague parts of the initial architect drawing were finalized. And the timeline kept being exceeded. But ultimately, the Strong Foundations team is looking forward to the final product! The expected move-in date is late October 2021. 

So what goes into a dream ABA clinic? Some of their wish list items include a courtyard surrounded by the main building where children could safely play outside, a specific wing dedicated to more severe problem behaviors where senior staff have offices and can help as needed, 8 bathrooms in total including one that is reserved for staff, a shower, multiple enclosed rooms to keep noises to a minimum, a 3-foot wide hallway so that staff and learners don’t easily bang into walls, a dedicated drop-off area that is sheltered from the rain and heat, a side entrance for those who need quicker transitions from car to the building, and an expansion space for room to grow. Ultimately, they wanted something that was low maintenance, simple, and functional. 

After all of the planning, Strong Foundation staff, clients, and caregivers are looking forward to the big moving day! They plan to have a ribbon-cutting ceremony and parent tours, with COVID-19 measures in place. When asked if they would do it all over again, Ashley says, “absolutely, yes!”