These days, many people will do whatever they can to squeeze in space for a home office, but what if you want to turn your home office into an actual business office?
This is often entirely possible but may require more planning (and paperwork) than you might think. You can expect to have to clear even more hurdles if you want to use your home for anything other than “knowledge work.” Here are some points to consider.
First of All, Check If You Can Use Your Home for Business
If you’re renting, your first port of call is your landlord. If you still have a mortgage, then you need to speak to your mortgage provider. Never be tempted to skip this step on the basis that “it is better to beg forgiveness than to ask permission.”
You could wind up being evicted or asked to pay off your mortgage in full. Assuming your landlord/mortgage provider is OK with the idea, or if you own your own home outright, your next port of call is your local authority.
Dealing With Your Local Authority
In straightforward terms, there are two main reasons why a local authority is going to want to know about your home-to-business conversion.
First of all, they’re going to want to assess its potential impact on the neighborhood. In particular, they’ll want to check if your plan is going to cause any inconvenience for your neighbors (who will have votes), become a potential hazard, and/or create any extra work for them.
Secondly, they’ll have to make a decision on what this means for local taxes. In other words, do you pay council tax or business rates or a combination of both?
With regards to the former, your best chance of getting the council to agree to your plans is to show them either than your business will have no impact on anyone (other than yourself and your customers of course) or that you have recognized the issues it could cause and have a realistic plan in place to deal with them.
With regards to the latter, you may find it helpful to try to designate a very specific area of your home as your business premises, so as to make the situation more clear-cut.
Check With Your Insurance Companies
Similar comments apply to your insurance companies. They will want to know what it means for them and in particular if they need to increase their premiums to cover any increased risk.
For the sake of completeness, insurance companies will typically only cover you for anything if you are acting within the law, which is another reason to make sure you have clearance from your local authority.
Check If You Need to Make Any Updates to Your Property
Business premises need to comply with business regulations, such as health-and-safety, including fire safety. General security will also need to be a consideration.
There are basically two aspects to security. The first is protecting people from harm and the second is protecting your assets from harm.
In terms of keeping people from harm, you’ll want to consider yourself and your immediate family (and your pets and any family, friends or other people who may be visiting your home, e.g. tradespeople), plus the safety of any customers and/or employees you have and anyone visiting the “work” part of your home for any other reason, plus the safety of the public as a whole.
Do not underestimate this last point, especially not if you want to stay on good terms with your neighbors and the local authority (both of which tend to be prerequisites to being allowed to stay in business, or at least operating out of your current location).
When thinking about keeping your assets from harm, remember to think about your digital assets too. Good cybersecurity depends on proper physical security. There’s not much point in spending money on digital security products if people can walk into your business premises and access your computers.
If you need to make changes to your home so that it can host a functioning business, then you may need further permissions from your local authority, typically planning permission and you may also have to comply with the building regulations.
As a minimum, you’re going to have to cost out the changes very carefully and think about their potential impact on the value of your home.
This last point may depend on whether or not the changes could be useful to a future buyer and/or whether they could be easily reversed.
Turning Commercial Property Into Residential Property
Should you wish to reverse your changes and turn your commercial property back into fully-residential property, or if you’re interested in taking on an existing commercial property and converting part (or all) of it, for use as residential property, then similar considerations are likely to apply.
To begin with, you are very likely to need your local authority to sign off on the change, however, the good news is that anything which increases the supply of available housing is likely to be viewed very favorably by local authorities, especially if it can be classed as affordable housing.
In fact, the provision of affordable housing could be a key factor in deciding whether or not you get permission for your conversion and the percentage of affordable housing the local authority expects you to provide can determine whether or not any given project is actually economically viable.
Assuming that everything is all clear from a legal perspective and that you have thoroughly checked that any changes you need/want to make are actually physically possible, then your next big challenge could be to secure funding.
How big a challenge this will be will probably depend partly on the amount of work involved (and hence how much money you need) and partly on whether or not you plan to use the property yourself or sell on all or part of it.
If there is minimal work involved and you intend to use the property yourself, then you may be able to get the funds you need from a self-build mortgage.
For larger projects and/or projects where the finished units will be for sale/lease/rent, you may have to look at venture capital and/or business loans.
home office -DepositPhotos
