How to Buy a Home and Start a Business at the Same Time
Both starting a business and buying a new house are major events. This is why you need to know How to Buy a Home and Start a Business at the Same Time. It will not always be the case to attempt both; however, it may be necessary to tackle these two tasks simultaneously, especially if you need to upsize to make room for your new business venture! While it might be more convenient to wait until after your business is fully launched to navigate the moving process, buying a new home while you’re still employed will make it easier to qualify for a mortgage. Here’s everything you need to know about How to Buy a Home and Start a Business at the Same Time, courtesy of Duffy Realty!
Apply for a Mortgage When You’re Still Employed
Getting approved for a mortgage requires a lender to assess your ability to repay the loan. One of the factors lenders typically consider is income and employment status. If you are employed, a lender will use your employment information to determine whether or not you’ll be able to make your monthly mortgage payments. Being employed also signals stability and reliability, which can increase a lender’s confidence in you. If you’ve just quit your job to start a new business, a lender will be hesitant to approve your mortgage application. If you can keep your current job while starting the other it may be the best bet!
Set Up Your New Business
Before buying a major new asset like a home, make sure you shield yourself from business-related liabilities. Sole proprietors are personally responsible for business liabilities and debts. Forming an LLC, on the other hand, will establish your business as a separate legal entity and ensure your personal assets are protected. If you decide to structure your business as an LLC, consider using an online formation service so you can avoid the lawyer fees.
We do recommend talking to a lawyer and potentially an accountant though to make sure you are set up the way you need to be – especially when you Buy a Home and Start a Business at the Same Time and you are working out of the home or the home is part of the business.
Go Back to School
If starting your own company doesn’t sound like the best option for you, you could always take this opportunity to go back to school. By gaining additional education and insights in your field, you’ll have an edge over the competition when you graduate. Also, you could always use a degree in information systems to further your career, and thanks to the flexibility of online learning, you can proceed at your own pace without having to take too much time away from your other obligations. You may also learn creative new ways to start something on the side!
Find the Perfect Home
When it comes to finding the perfect new home for you and your business, consider location first. Look for a home that’s easily accessible to customers or clients and close to other amenities like shops and public transportation. Be sure there’s space for visitors to park, whether it’s street parking or room for an extra parking spot or two on your property.
Next, consider the size and layout of the property. Make sure there’s enough space to run your business and store any necessary equipment. If possible, try to find a property that allows for a clear separation between your business and personal spaces. This will create privacy for you and your family while establishing a sense of professionalism for your business. Detached additions or attached converted spaces like basements and garages are ideal!
Budget for Your New Home and Startup
You’ll also need to consider your budget and the overall cost of the property you’re considering buying. Running your business from home can be a cost-effective way to start and operate a business, but you still need to factor in the cost of upsizing into a larger home and making any necessary renovations or upgrades to accommodate your business. Start by researching home prices in your area so you know what to expect!
The Balance Money stresses the importance of accounting for additional costs that come with buying a home, including closing costs, moving costs, and home inspection fees. Keep in mind that upsizing into a bigger home may mean hikes to your homeowner’s insurance and property taxes. Budgeting for these costs will ensure you can afford to purchase a bigger home without tapping into your business startup funds. It is all a part of How to Buy a Home and Start a Business at the Same Time!
Buying a home and starting a business at the same time can sound like a stressful nightmare. But by taking steps to plan ahead, evaluate your options carefully, and structure your business properly, you can navigate this challenging process and wind up in a home that perfectly meets the needs of you and your business.
Duffy Realty is a low-commission real estate boutique brokerage in Metro Atlanta. They have been in business for over 22 years and have helped well over 42k clients achieve powerful results both buying and selling!
Let us know if you have any questions!
Written by Patrick Young: Real Estate Activist