If you are a new entrepreneur or expanding, you may have considered selling your home and buying a new residence that could house both your family life and your work life under the same roof. Now, you’ve decided to take the plunge, call your realtor, and begin looking at properties.
Choosing a new home and starting a business at the same time can be daunting, but fortunately, there are a few ways to ensure a smooth transition for both your work and your family and to potentially save money in the process. These tips from Michelle Thomas can help!
1. Do You Need More Square Footage or Just a Different Floor Plan?
How much elbow room do you need? Say you currently live in a 2200-square-foot house that has 3 bedrooms, and you and your spouse have two children. You would like to find a house that has a bedroom for you and your spouse and each of your kids — but this time around, you need a room for a home office. The Financial Samurai suggests planning on about 600 square feet per person, but what about your business venture?
When you and your agent are searching for properties, take into account your business’s specific needs: Do you really need that 3500-square-foot, four-bedroom home, or could you search for three-bedroom homes that include a bonus room or a small office area on the first floor? Or would an outdoor shed or garage make your plans doable?
Having a closed-off space that can function as an office may work, as well as designating an entire bedroom as your new workspace. Consider these parameters and make sure you do not rule out any potential homes in your search. If you only search for four-bedroom homes, for example, you may miss that great three-bedroom with a basement that could be easily converted to an office.
2. Buying a Home “As Is”
This trick could save you a little — or a lot — of your hard-earned cash, and right now, you’re going to need every penny if you’re starting a new business. Consider looking at older properties or simply houses that need a few repairs and put in an offer to buy the house as is. This means that you will take the home without repairs.
Sometimes, homes are listed as-is; while these might be diamonds in the rough, be particularly wary if you’re considering such a property. These properties typically have known issues the homeowner is unwilling to address prior to selling.
If you choose this option, be sure to consult with a lawyer before you close the deal, and don’t forget to schedule the necessary inspections (mold, termites, and possibly radon depending on where you live). If you see potential red flags, don’t pursue the property further; however, you may find a diamond in the rough that just needs a little TLC to get back to a livable state.
3. Consider The Associated Tax Deductions
Depending on various factors, your monthly mortgage payment may be a bit higher on the new house, but consider this perk: You will be able to deduct home office expenses from your taxes. The catch here is that if you work at the kitchen counter, this doesn’t count as a “home office” and therefore does not qualify you for the deduction. You must have a dedicated space that you use as the headquarters of your new business.
Look into deductions for the workspace itself, the sale of your home, real estate taxes, upgrades needed for your business venture, and even the security system you use to keep your property safe.
When you’re investing in a new home and upgrades for your business, the easiest way to track your expenses is through software like QuickBooks. This software sorts expenses into tax categories so you’ll be prepared for tax season, and you can use their mobile app to take pictures of your receipts.
Though you may be feeling a bit stressed as you sift through all of the available properties in your area, keep in mind that there are great payoffs to be had when you move with your work-from-home business in mind. When done right, you will be able to write off home repairs, pay less in yearly or quarterly taxes, and best of all, have a great new office solely dedicated to growing your home business.
For more information on finding the perfect Naples or Marco Island home for your business, give Michelle Thomas a call at 239.860.7176!
Article provided by Katie Conroy katie@advicemine.com