SELF-EMPLOYED HOME BUYER: WHAT IS LIVE-WORK REAL ESTATE?
SO, YOU GOOGLED “SELF-EMPLOYED HOME BUYER STRATEGY”, OR SOMETHING SIMILAR. BASICALLY, YOU WORK FOR YOURSELF OR OWN A SMALL BUSINESS AND ARE WONDERING HOW YOU CAN BUY A HOME OR WHAT UNIQUE STRATEGIES THERE ARE THAT YOU MIGHT BE ABLE TO TAKE ADVANTAGE OF TO BUY AND INVEST IN REAL ESTATE.
SELF-EMPLOYED HOME BUYER STRATEGY: WHAT IS LIVE-WORK REAL ESTATE?
LIVE-WORK REAL ESTATE IS A SURPRISINGLY VERSATILE AND INCREASINGLY POPULAR OPTION IN CALIFORNIA, INCLUDING SAN DIEGO COUNTY. IT ALLOWS PEOPLE TO COMBINE THEIR LIVING SPACE WITH THEIR WORKSPACE, MAKING IT IDEAL FOR SMALL BUSINESS OWNERS, FREELANCERS AND REMOTE WORKERS.
IF YOU’RE SELF-EMPLOYED, YOU KNOW THE IMPORTANCE OF HAVING A DEDICATED WORKSPACE THAT FOSTERS PRODUCTIVITY WHILE ALSO PROVIDING THE COMFORT OF HOME. ENTER LIVE-WORK SPACES: THE PERFECT BLEND OF RESIDENTIAL AND COMMERCIAL REAL ESTATE THAT CAN OFFER BOTH CONVENIENCE AND FINANCIAL BENEFITS.
WHY CONSIDER A LIVE-WORK SPACE?
LIVE-WORK SPACES ARE DESIGNED TO SERVE AS BOTH YOUR HOME AND YOUR OFFICE. THEY ARE PARTICULARLY POPULAR AMONG FREELANCERS, ENTREPRENEURS AND SMALL BUSINESS OWNERS WHO NEED A FLEXIBLE ENVIRONMENT THAT SUPPORTS BOTH LIVING AND WORKING.
KEY ADVANTAGES:
NO COMMUTE: ELIMINATE COMMUTING TIME AND COSTS.
TAX BENEFITS: POTENTIAL FOR SIGNIFICANT TAX DEDUCTIONS.
FLEXIBILITY: ADAPTABLE SPACE THAT CAN GROW WITH YOUR BUSINESS.
CONVENIENCE: EVERYTHING YOU NEED IS IN ONE PLACE.
POTENTIAL TAX BENEFITS
ONE OF THE BIGGEST DRAWS OF A LIVE-WORK SPACE FOR THE SELF-EMPLOYED IS THE POTENTIAL FOR TAX DEDUCTIONS. HERE ARE SOME OF THE WAYS YOU CAN BENEFIT:
HOME OFFICE DEDUCTION: IF YOU USE PART OF YOUR HOME EXCLUSIVELY FOR BUSINESS, YOU MAY BE ELIGIBLE FOR A HOME OFFICE DEDUCTION, WHICH CAN INCLUDE A PORTION OF YOUR RENT OR MORTGAGE, UTILITIES AND MAINTENANCE COSTS.
DEPRECIATION: YOU CAN DEPRECIATE THE BUSINESS PORTION OF YOUR LIVE-WORK SPACE, SPREADING THE COST OVER SEVERAL YEARS.
BUSINESS EXPENSES: UTILITIES, INTERNET, AND EVEN SOME REMODELING COSTS CAN BE WRITTEN OFF AS BUSINESS EXPENSES.
TIP: ALWAYS CONSULT WITH A TAX PROFESSIONAL TO ENSURE YOU’RE MAXIMIZING YOUR DEDUCTIONS AND STAYING COMPLIANT WITH IRS REGULATIONS.
FINANCING OPTIONS
SECURING FINANCING FOR A LIVE-WORK SPACE CAN BE A BIT DIFFERENT FROM TRADITIONAL HOME OR COMMERCIAL LOANS. HERE ARE SOME STRATEGIES TO CONSIDER:
MIXED-USE LOANS: SOME LENDERS OFFER MIXED-USE LOANS SPECIFICALLY DESIGNED FOR PROPERTIES THAT COMBINE RESIDENTIAL AND COMMERCIAL USES.
SBA LOANS: THE SMALL BUSINESS ADMINISTRATION (SBA) OFFERS LOANS THAT CAN BE USED TO PURCHASE A LIVE-WORK SPACE, OFTEN WITH FAVORABLE TERMS.
TRADITIONAL MORTGAGE: DEPENDING ON THE RATIO OF LIVING TO WORKING SPACE, YOU MAY STILL QUALIFY FOR A TRADITIONAL MORTGAGE, ESPECIALLY IF THE PROPERTY IS PRIMARILY RESIDENTIAL.
TIP: WORK WITH A MORTGAGE BROKER WHO HAS EXPERIENCE WITH LIVE-WORK PROPERTIES TO FIND THE BEST LOAN OPTION FOR YOU. IF YOU’RE LOOKING FOR A REFERRAL, REACH OUT TO ME WITH DETAILS ON YOUR GOALS, LOCATION & BACKGROUND AND I CAN CONNECT YOU WITH SOMEONE.
STRATEGIES FOR BUYING A LIVE-WORK SPACE
IDENTIFY YOUR NEEDS: DETERMINE HOW MUCH SPACE YOU NEED FOR LIVING AND WORKING. CONSIDER FUTURE GROWTH AND WHETHER THE SPACE CAN ADAPT TO YOUR CHANGING NEEDS.
LOCATION, LOCATION, LOCATION: CHOOSE AN AREA THAT’S CONVENIENT FOR BOTH YOUR PERSONAL LIFE AND BUSINESS. PROXIMITY TO CLIENTS, SUPPLIERS OR BUSINESS HUBS CAN BE BENEFICIAL.
CHECK ZONING LAWS: MAKE SURE THE PROPERTY IS ZONED FOR BOTH RESIDENTIAL AND COMMERCIAL USE (IF NEEDED). THIS CAN VARY SIGNIFICANTLY BY LOCATION.
BUDGET WISELY: FACTOR IN ALL COSTS, INCLUDING POTENTIAL RENOVATIONS, UTILITIES AND MAINTENANCE. ENSURE YOU HAVE A BUFFER FOR UNEXPECTED EXPENSES.
CONSULT PROFESSIONALS: WORK WITH A REAL ESTATE AGENT WHO SPECIALIZES IN LIVE-WORK SPACES, AS WELL AS LEGAL AND FINANCIAL ADVISORS TO NAVIGATE THE COMPLEXITIES.
DON’T HESITATE TO REACH OUT TO ME DIRECTLY, IF YOU’RE IN SAN DIEGO WE CAN DISCUSS LOCALLY. IF YOU’RE FROM ANOTHER CITY OR STATE, I CAN CONNECT YOU WITH SOMEONE IN MY TRUSTED PROFESSIONAL NETWORK.
THE ADVANTAGES OF LIVE-WORK SPACES FOR SELF-EMPLOYED HOME BUYERS
ENHANCED WORK-LIFE BALANCE: HAVING YOUR OFFICE JUST STEPS AWAY CAN MAKE IT EASIER TO BALANCE WORK AND PERSONAL LIFE.
COST SAVINGS: BY COMBINING YOUR HOME AND OFFICE, YOU CAN SAVE ON COSTS LIKE RENT, UTILITIES AND COMMUTING.
COMMUNITY ENGAGEMENT: MANY LIVE-WORK SPACES ARE LOCATED IN VIBRANT, MIXED-USE NEIGHBORHOODS, OFFERING A SENSE OF COMMUNITY AND EASY ACCESS TO AMENITIES.
INCREASED PRODUCTIVITY: A WELL-DESIGNED LIVE-WORK SPACE CAN BOOST YOUR PRODUCTIVITY BY PROVIDING A COMFORTABLE AND EFFICIENT ENVIRONMENT TAILORED TO YOUR NEEDS.
FOR THE SELF-EMPLOYED, A LIVE-WORK SPACE CAN BE A GAME-CHANGER. IT OFFERS THE FLEXIBILITY TO ADAPT TO YOUR BUSINESS NEEDS WHILE PROVIDING THE COMFORT OF HOME. WITH POTENTIAL TAX BENEFITS, VARIOUS FINANCING OPTIONS, AND NUMEROUS ADVANTAGES, IT’S A STRATEGY WORTH CONSIDERING.
