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Converting Residential To Business: A Look At New Trends In Apartment Usage


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One of the more interesting trends in apartment purchasing today has been to convert them towards use as places of business or as an office. Normally seen in some of the older buildings within Indonesia; converted apartments have been locations for dermatology clinics, dentist offices, small call center operations and have even been used as office spaces for business startups. For example, if you were to go to an online database like Rumah and used Rumah’s search engine to look for available apartment space in older districts within Jakarta, you would see that many of them use descriptions that emphasize their convertibility for business purposes.

Why Do Businesses Do This?

Cost savings is at the forefront of this particular practice since businesses save significant amounts of money from simply renting an old apartment and advertising their services via flyers and word-of-mouth rather than investing in an actual commercial space. For small startups, renting office space in a building specifically for this purpose is not practical given the limited amount of funds that they have access to. Simply renting a small apartment or even buying one in order to re-purpose it for business purposes is far more affordable as compared to the rental price in many of today’s business districts within Indonesia. This is one of the reasons why this trend has grown significantly over the past five years as more business startups opt to use small apartments as their primary location for housing their offices.

How Can it be Feasible?

There are, of course, some issues for businesses when they attempt to utilize this particular method. The first is that the policies of some developers and building administrators clearly indicate that re-purposing an apartment for business use is simply not allowed. This is especially true for some of the newer buildings within Indonesia where single purpose use is a strictly enforced mandate that is indicated in all tenant and owner agreements. However, in some of the older buildings where administrators and developers are more inclined to let things pass due to the need to increase tenancy, conversion is allowed. This is why you should always ask about the policies of a building prior to setting up your business or office within it.

Is it Legal?

Technically, this practice falls under a certain gray area when it comes to Indonesia’s real estate laws since the use and access of the common areas of a building depends on the joint condo ownership agreements. If the admin of the building agrees to it and the other tenants are fine with the practice, then that building can allow some apartments to be repurposed for business purposes. However, you have to note that there are some limitations on the type of business that can be placed in them. While conversion into office space is allowed, there are some limitations when it comes to the type of conversions that are possible. For example, manufacturing facilities, food production, and some medical practices are only permitted in designated commercial and industrial areas within the city and, as such, conversion of an apartment unit for such purposes is strictly prohibited. Prior examination of the rules for apartment conversion in that district and for that building type are necessary before you attempt any form of repurposing.

Limitations to Repurposing.

There are some limitations to this practice since the apartments were originally created primarily for residential purposes and were not originally intended to house businesses of any sort. One of the most obvious limitations is the general accessibility of the location. With a business located within an old apartment complex, potential customers would need to navigate the numerous corridors inside the building and gain access to your floor by passing through the security measures at the entrance. It is important to achieve some form of cooperative agreement between you and the admin/guards of the building prior to establishing your office premises since their cooperation is absolutely essential for your business to succeed. Aside from this, there are also issues related to the functionality of the apartment since the number of sockets located inside are limited and were never intended to be used by several computers at the same time. Some modifications to the outlets are needed and you will need the assistance of an electrician in order to put this into effect safely.

All in all, converting a residential apartment unit into an office or small business space is an excellent idea for a business that is just starting out given the lower prices that old apartments tend to have as compared to commercial properties or office space in the business district of the city. Just be sure to check the policies of the building and district it is in prior to any form of repurposing that you may have in mind.