How to Upsize Your Home to Accommodate Your Growing Business
There are many joys to running a home-based business, from setting your own hours to being able to work in your pajamas. Thanks, in part, to the recent rise of the gig economy, more and more people are launching their own businesses and enjoying the freedoms of freelancing from home. Of course, as your home-based business grows, it may require additional inventory, employees and room in your home. It's certainly a good problem to have but when your business reaches a point where it outgrows the size of your home, working from home can become a little tricky.
Now, this doesn't mean you'll need to give up the freedom of working from home. It does, however, mean that you'll need to explore your options. One of these options includes looking into whether you might be able to upsize your home in order to better accommodate your growing business. Read on for some advice on how to budget for your new home, as well as what to look for in one.
What to look for
Start by considering your current situation and evaluate what you might need in a new home. How many bedrooms? What type of neighborhood? Urban or rural? What city? These are just a few questions to ask yourself. Obviously, the key thing to look for as a home-based business owner is a home that is big enough for you to live and work in, not just today but for years to come. Consider business growth as well as any possible family growth or cohabiting that may occur.
The biggest consideration, according to HGTV, is your quality of life. People upsize homes for many reasons, whether they're expecting a child or have recently gotten a promotion. A business that requires a larger home is certainly one of those reasons - as long as you budget for it in advance.
Once you figure out where to live, look at the home prices in the area and determine what you can afford. This requires an honest look at household income as well as a projection of future business earnings. Take 20 percent of the total home price and use that number to budget for a down payment. Yes, you can technically get a home with a smaller down payment but in this housing market, the more you can put down, the better.
The current housing market is at a high, which is great for the economy but tricky for homebuyers. Just look at this report from CNBC about the minimum salary requirements to purchase a home in most United States cities with a 10 percent down payment. This is the result of housing prices increasing in nearly every US city, according to Unison's 2018 Home Affordability Report.
Since most of us aren't made of money, it's important to seek out options for financing your new home. Waiting until you can save up an entire 20 percent down payment just isn't a realistic option when you're running a business that is rapidly outgrowing your home. There are certainly home loans and mortgages like the ones you'll get from traditional lenders. Of course, those aren't the only options available to you.
Another option that most people don't think about is securing a short-term business loan. Just like with home mortgages, there are even business loan calculators that will help you budget for what your monthly payment might be. It's important to start budgeting as early as possible and to be realistic about what you can afford. Small business loans and budget calculators can help you make your dreams of a bigger home a reality.
Keep in mind that these tips are meant to provide a starting point. However, every situation is different. You're the only one who can determine what's best for your business, yourself, and your unique situation. Hopefully, the options listed above point you in the right direction for doing further research so you can upsize to your dream home.