Why Bigger?

There are many obvious reasons that a bigger house makes sense when you’re running a home business. You’ll need a home office, of course, but you may also need extra room to accommodate or protect work vehicles or to complete non-office related duties, such as building products. You may also need room to spread out if you plan to have your employees or customers visit you in person instead of virtually.

Before You Buy

Before you start your real estate search, there are a few steps you can take to make the process easier. Start by educating yourself on the local – and national – real estate market. This way, you can get an idea of how much you can expect to spend whether you choose to stay in your hometown or move to another state.

Next, take a look at your home equity. Merrill Lynch explains that to determine how much you can get out of your home, you have to figure out the appraised value and then subtract the balance of your mortgage. This is your home equity. Keep in mind, however, that this number may also be affected by any additional concessions you give to your buyers as well as your realtor’s selling fees.

As a business owner, another important step you want to take if you have yet to do so is to form an LLC. Contrary to popular belief, this is not a paperwork-intensive process, and you don’t even have to pay the attorney fees to file in your state. As an LLC, your business is viewed as a separate entity from yourself. This means that your new home will most likely be safe should you find yourself on the wrong end of a bad business deal. ZenBusiness LLC outlines the steps needed to form an LLC and explains that LLC proprietors aren’t subjected to double taxation.

A final step before you get started is to partner with an experienced real estate professional. Explain to your agent your goals, and make sure they are aware that you plan to run a business from home. Your realtor can help you determine the legality of launching in your preferred neighborhood. Not all cities or neighborhoods allow home businesses, so knowing this is a crucial step in the home buying process.

Things To Consider

When you’re looking for a home, don’t count out the tax deduction that you’ll get for having a home office. You can claim a maximum of 300 ft.² (approximately $1,500 per year) using a $5 per square foot deduction. Because of this, it might make sense to find a home with an exclusive, dedicated office. You also want to think about the layout of your new property. Ideally, you don’t want to have to walk through the living room or kitchen to get to your office. A house with a separate, air-conditioned outbuilding with a bathroom or with an exclusive entrance makes the most sense if people will be coming in and out of your house during office hours.

While you do not have to have a mansion to run a home business, extra space will definitely help you grow. The steps above are a great starting point, but, ultimately, only you know what you need. Talk with your realtor about the types of home available in your area and, most importantly, know the law. The last thing you need is to get moved into your new home only to find that you can’t run a business from it.