Comfortable and affordable office space is hard to come by in many major cities. Many successful companies often work from converted homes. However, choosing to convert residential space into offices comes with unique benefits and challenges for entrepreneurs. Sounds like a good fit for your business? Prep to tackle these common issues that arise in home-to-office conversions.
Can Residential Houses Be Used as Offices?
Yes, residential houses can be used as offices, but there are some important factors to consider. Many people convert part of their home into a workspace, whether it’s a dedicated room or an area designed specifically for business purposes. However, before making the switch, it’s essential to check local zoning laws and regulations to ensure you’re allowed to operate a business from a residential property.
In addition to legal considerations, it’s important to think about practical factors like space, internet access, and utilities. Will the area accommodate your work needs? Is there enough privacy and quiet to focus? Many people find that converting a part of their home into an office can increase productivity and create a more professional environment, but it requires careful planning to make the space work for both personal and business use.
Benefits of Converting Residential Space into a Business
Business owners often explore converting residential properties into office or retail spaces to save on costs and enjoy greater flexibility. This option provides the benefits of a more relaxed atmosphere and the potential for lower rental rates compared to traditional commercial spaces. Here are some of them:
1. Location
For companies that count on-foot traffic or easy access to specific areas, location may be key. These businesses don’t mind converting a property to stake a claim to a desirable neighborhood. An ideal location can also help attract young talent.
2. Price
Office space can be expensive per square foot or require long-term commitments. It may be more affordable to rent out a house or apartment for your business, especially if you find a landlord that offers flexible leases. Here’s a quick example: In Cleveland, the average rental cost for retail space was $12.13 per square foot in 2017. The average Cleveland three bedroom home, however, costs $1,180 per month for 1,282 square feet. If you can find a residential space with flexible zoning, your monthly rent would be much lower.
3. Vibe
Forget a conference room; meetings can take place around the kitchen island. For companies looking to distance themselves from a corporate feel, a converted house may have the casual, collaborative atmosphere you’re looking for.
5 Common Issues to Keep in Mind While Converting a Residential Property
You need to have a clear understanding as to what converting a residential to commercial space entails. Here are five issues to keep in mind if you want to transform a space from home to office.
Zoning
Before you start planning company cookouts in the new backyard, make sure you’re legally allowed to operate a business in the space. Residential zoning may prevent you from operating a business that hosts clients or draws significant foot traffic. If you’re unsure whether your business meets the zoning requirements, contact your local government agencies before you sign anything.
Security
Most office spaces have security measures to keep companies’ information and materials safe. Call in a trusted security company to discuss the kind of work your business does and what kind of security solutions they can offer. Don’t leave this item until the last minute; you may need to make changes to the building or layout to protect your property, so prioritize your security needs from the start.
Construction
It may take a little work to turn your new building into functional office space. Whether you’re knocking down walls for an open-concept communal feel or dividing up rooms into private offices, turning living space into working space may be costly and time-consuming. Check to see if you need to obtain permits for the work you’re doing. According to the Houston Chronicle, the average cost to renovate an office space is about $200 per square foot. Expect higher rates for a residential-to-commercial conversion.
Design
Your company may want to stay away from that “office feel,” but a few adjustments will make your office an easy, comfortable place to work. Designate or create some private spaces for confidential conversations and meetings, and don’t forget a color scheme. You can still have an eclectic look, but a loose design scheme helps your place of business seem cohesive and professional.
Comfort and Convenience
Make sure your newly converted space can support your employees’ day-to-day needs. Ensure that the home is properly ventilated, and that the heating and cooling system can support any additional strain (due to multiple computers and high occupancy). And don’t forget parking. Whether you obtain permits or pave a parking lot just for your staff, your neighbors and employees will appreciate your consideration.
The ideal office space will foster collaboration and creativity, and it should be a nice place for your employees to come to work each day. If you have the budget for the required renovations and changes, go for it. Converting a residential space into commercial space may the perfect solution for your small business.
Robert Kociecki is a real estate industry expert. He serves as the Senior Vice President of Property Management and Renovation at Altisource. Altisource and its affiliates provide real estate services for consumers and investors. Visit owners.com, where home buying and selling is made simple.