Questions To Ask Yourself As You Upgrade Your Home (And Home Business)
As a homeowner and a home-based business entrepreneur, you may be feeling cramped on space. Businesses grow, but homes, without a hefty investment, do not. If you are planning to upgrade your abode to accommodate your ever-expanding enterprise, congratulations. Your success is the success of your community and a manifestation of the work you’ve put into your business. But, before you start your new house hunt, ask yourself the following four questions.
Do I have a reliable agent?
While buying real estate has been made much easier with the advent of the internet, you still need an experienced agent to walk you through the process. Local real estate expert Franz Redl can help you search for a home based on your needs and budget (more on budget below). And he can help you choose a city or neighborhood that allows home businesses — many do not.
Franz Redl can also help you choose a location based on the school zone, property taxes, and proximity to services you and your family want. He’ll help you get a fair price and won’t let you forget to prequalify, schedule your home inspection, or take great photos of your current home. He can even work with your buyers and the sellers of your next home to try and coordinate closings on the same day so that there is no overlap in your living arrangements.
How much can I really afford?
Calculating home affordability as an entrepreneur is sometimes a challenge. Not only do you have to consider your monthly housing expenses, but you must also factor in the cost of running your business. And, if you have yet to actually launch your small business, you’ll have to have money for both the down payment and start-up costs. According to YSF Magazine, the latter can be as much as $30,000.
Your down payment depends on the home's price, the term of your loan, and whether or not you are comfortable paying private mortgage insurance. Your credit score also plays a factor in how much home you can afford. As a general rule, a higher credit score means less interest and a lower monthly payment.
How can I protect my new home from business-related losses?
When you’re buying a new home with the intent of running a business, you should be aware that your personal property may be a target if you are sued and are a sole proprietor. Protect your assets by transitioning your business into an LLC structure. As you prepare to formalize your New Mexico LLC, you will also need to prepare an operating agreement , which details the operations and ownership structure of your business. There are several other odds and ends that you will need to consider with this transition, but many can be easily tackled through online services.
Another way to protect your growing business is to have clearly written contracts signed each time you bring on a new customer. You also want to fully insure your business, including having errors and omissions insurance.
Can I expand my business without moving again?
Finally, look ahead to where you see your business in the next five years. If you plan to grow and continue to operate from home, will your new property accommodate expansion? Can you have employees come into your home to work if necessary or visit with clients without violating your local codes rules and regulations? When it’s time to buy, don’t consider just today but where you plan to be in the near future as well.
Buying a new home to accommodate a growing business is a smart choice. But, make sure that you partner with an agent that can help you get the job done without overlooking important details, such as whether you can actually run a business from home. Protect your assets, and give yourself room to grow. While there are many other twists and turns along the road toward homeownership, those above are additional steps that home-based business owners must take.
Franz Redl of Albuquerque Real Estate Pros is here to help you find the home of your dreams. You can expect quality service with integrity, respect, and responsiveness. Reach out today to get started. (505)280-6365