Building for lease

Q Are there any guidelines for leasing my building after selling the practice?

"Valuators typically determine a fair-market rent expense during the valuation process," says Tom McFerson, CPA, an accredited business valuator and partner at Gatto McFerson in Santa Monica, Calif. "You should charge this amount going forward as the landlord. If you don't know the rent expense, then the rent should be close to a fair-market value for the area."

McFerson says rent increases are usually tied to governmental inflation increases or the Consumer Price Index. "The term of the lease is usually five years, with two or three five-year options," says McFerson. "A buyer likes to know he or she has a place for at least 15 to 20 years. The type of lease is usually triple net."

Tom McFerson