Having a designated space in your home that’s large enough to accommodate a growing home-based business is crucial to your company's success. If your current home doesn’t fit the specifications you need, it may be time to move to a more suitable place. There are several factors to consider and steps to take when moving and starting a home-based business at the same time, a few of which are explored below courtesy of Daren Cullen Central Oregon Premier Realtor.
Buying a New Home
Looking for and purchasing a new home is a long and involved process—even for those who aren't planning to open a home-based business. Here are some ways to make it easier.
To qualify for a home mortgage when you’re just starting out, Rocket Homes notes you’ll have to provide proof of a stable income. Most mortgage lenders want to see two years of steady income, so it’s a good idea to keep your current nine-to-five until you’ve secured a lender. You’ll also need a good credit score and a sizable down payment. Zillow points out that minimum down payments and credit scores depend on the lender and type of loan. For example, for an FHA loan, you need 3.5% down and a minimum credit score of 580.
Understanding these processes and necessary expenses makes it easier to save money when you're buying a new home. Other ways you can save include finding a reputable real estate agent, buying during the winter months, choosing a short-term mortgage, and purchasing a home as-is instead of expecting the current homeowner to foot the costs, which can drive up the price of the property. If you do opt for buying as-is, be sure to first check areas that may need major repairs, such as the roof.
Sellers list a home as-is when they don’t want to pay for costly repairs. While this can save money, if you find major problems after closing, you’ll be responsible for fixing them. As-is sellers must still meet minimum federal and state disclosure statements. To avoid unexpected costs when buying a house sold as-is, consult with an attorney, who'll examine land records for liens and hire an inspector.
Things to Consider When Starting a Home-Based Business
Just because you’re operating a home-based business doesn’t mean you should forego opportunities to venture out and network when you can. Having business cards on hand when you make new contacts is helpful for building relationships. Any time that you find yourself out, have some cards available to help market your business.
To protect your assets, including your new home, you may want to register your home-based business as a limited liability company (LLC). This structure can be formed by one or more individuals and prevents the loss of personal assets if the company gets sued or files bankruptcy. An LLC also protects the identity of the members of the business, which can keep creditors from harassing you at home if you owe money.
As an LLC owner, you can choose the way your business is taxed, reduce the amount of paperwork you need to do, and create a more professional image for your home-based business. To save money, it’s possible to form an LLC on your own or with a formation company. Different states have different requirements for forming an LLC, so it’s important to research the specifics for Oregon.
Once you have your business established, you’ll need to choose accounting software along with some other business management software. There are great options online for managing your payroll services, many of which include direct deposit, tax penalty protection, and 24/7 support services. You can even automate your payroll, which can help you free up some time for other tasks related to your business and your move.
Changing Life’s Direction with a New Business in a New Home
Purchasing a home is a major investment. This is especially true if you plan on starting and maintaining your business from the location. Research to understand how much you can afford, what you need to be approved, and how you need to structure your company in order to get the most for your money.
If you are looking to buy or sell in Bend, OR, Daren would love to help with your real estate needs. With her help, you can focus more on your business during the transition. Contact Daren today!
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