It’s not uncommon for new businesses to have humble beginnings from inside the home. You may have heard of many “startup garage” stories that can certainly inspire you to explore the growth potential of home-based businesses. However, many business owners move on to purchase a property for their business as they grow. Rather than rent, they may opt to purchase a building or even a residential home to run their company from.
But before you make this decision, there are a few things you should know:
Higher Level of Privacy.
Buying a property through your business may afford you a much higher level of privacy. This is because while home purchases are within public records, buying a property as an LLC (for example) is not. This is why celebrities often purchase properties through an LLC or trust. Under an LLC, it would be difficult for someone to find out how much you paid for a property, or where that property is located. Additionally, buying an LLC helps protect your assets if someone were to ever get injured on your property.
Unlike renting a property, property owners are responsible for the maintenance, and you can’t simply call the landlord to hand an issue. If you aren’t prepared to assume the responsibility, buying may not be the best option for you. If you purchase a move-in ready building, then you are more likely to have a carefree ownership experience. However, even when buying a property that requires minimal renovations or upkeep, there will eventually come a time when you’ve got to address some common issues that come with usual wear and tear.
For instance, according to Summit Roof and Gutters, your gutters need to be cleaned at least twice per year. Depending on the location and season, they may require additional cleaning (you can learn more here: https://summitroofingandgutters.com/denver-gutter-installation-replacement/). These are the type of minute details that matter; an unclean gutter can cause damage to the roof and may even leak and create a mold situation.
Small household issues usually grow to become something bigger, whether it’s a small leak or a failing gutter. If your heart is set on buying, it’s best that you maintain a consistent working relationship with maintenance contractors—or know how to handle the work yourself.
In addition to significant tax advantages, one of the biggest benefits of purchasing a property is the ability to customize it to your liking. Those who choose to lease or rent may find themselves facing many restrictions and “ask for permission” situations when it comes to customizing the property to suit your business needs. As a business owner, you may have already thought about how the business will scale, but have you thought about how your space should scale with you?
Understand Zoning Laws.
Zoning laws specify areas in which commercial activities can take place. These laws dictate how specific land can be used. Before you purchase a property, do your research to find any laws that might affect your business operation—especially if you plan to run a business out of a residential home.
Some locations may prohibit you from running specific types of businesses from out of your home, and you may be required to show your business license for others. If your home-based business violates local zoning laws, you may run the risk of losing your business license.
Is the Area Right for You?
Just as with buying a house for personal use, knowing the area can make a huge difference. When you buy a property for yourself and your family, you check to see what the transportation is like, what the local schools are like, etc. The same precautions should be taken when you’re considering a purchase for your business.
Is parking easy to find? Is it accessible to potential lunch venues? Would your employees need to have a car to get to work? Would your team feel safe coming to and from the building? Are there any neighborhood-related issues that could raise some red flags? These are all things you’d need to consider.