February 5, 2024
Buying a home is always an arduous process, but it's often even more stressful for business owners. Proving your income is tougher, and finding the right lender is more challenging. But there's likely to be a time when you think you're ready to buy a new home, whether you're still getting your business off the ground or you want to spend some of the profits you've made with your successful company. On top of all the paperwork and finances, you still have to find a home that works for your wants and needs.
It takes time to find the perfect home, and you'll probably have to make some compromises at some point. Before you begin your search, it's worth thinking about your priorities and getting everything in order.
It always makes sense to start with your desired location when you're looking for a new home. It will help inform your budget and allow you to work out what you can get for your money. Location matters for a number of other reasons, not least that you need to live somewhere that works for you. When you're a business owner, that could mean thinking about a few different things.
Firstly, you might have an office or other workplace you need to travel to regularly. That's going to factor into your ideal location, especially if it will be a daily commute. If you're planning to run your business from your new home, that could really affect your decision too. Maybe you're planning on having meetings or you'll even have employees come and work with you, both of which will require you to think about a suitable location for other people's convenience. Location could also matter if your home business is likely to produce any kind of noise or other disturbances. You need to think about your neighbours and whether your business could impact them.
Of course, you'll want to have a good idea of how much money you're able and willing to spend. To come up with a budget, you're going to have to consider a few different factors. There's the average cost of the properties you're interested in and, on the other side, there's how much you can afford to spend.
As a business owner, your budget could look a little different compared to an employee. Lenders might require you to demonstrate your earnings in a few different ways, including company accounts, tax statements, and bank statements. You could have a lower earnings multiplier compared to an employee and how much you can borrow is likely to be based on not just the most recent year's earnings but up to the last three years.
You also need to take your deposit into account. How much do you have saved, or how much do you need to save? What percentage of the total value of the property are you likely to be able to cover with your deposit? A lower loan-to-value will help you get a better deal.
You're likely to want to find a property with space to work. Even if you're not planning to run your business from home, it's useful to have a home office or another space where you're able to get some work done if necessary. And if you are planning to work from home, a home office could be the least of your needs. You might also be looking for a larger workspace or even a separate part of the property that can be used for your business. Making this a priority in your search is obviously pretty sensible.
It's always important to understand the process of buying a home, but it can matter even more if you're a business owner. You need to know all the financial ins and outs, and you might need to deal with issues such as buying a mixed-use property. Getting professional help to find your perfect home and complete the purchase will make it a lot easier. Make sure you work with a good broker and get in touch with an estate agent like the professionals at mgpproperty.com.au. Working with property professionals will help you find your ideal home and get all of the paperwork completed.
The long and arduous process of buying a home isn't one you want to repeat in a hurry. So it's a good idea to think about not just how your new home will suit your needs now, but also how it's going to meet them in the future. Think about how your priorities might change, whether that's in relation to your business, your family, or anything else. It could affect your choice of location, type of property, property size, and budget.
There's no denying that it takes time to find and purchase the right home. It's also true that business owners tend to be pretty busy, and might struggle to find time for something like buying a home. Making sure you're available and that you have time for your search, and then for dealing with the purchase process, is a must. It can be hard to prioritise other things when you're trying to run a business, but nothing will happen if you don't make time for it.
Another factor to think about if you're a busy entrepreneur is how much attention your home might need. If it requires a lot of maintenance, it could mean it takes you away from your business or your home ends up neglected because you're too busy to care for it. Choosing a home that doesn't require a lot of work means you'll be able to concentrate on your business and other priorities, instead of having to worry about constant home improvements or maintenance.
Entrepreneurs may have to think about some specific challenges when looking for the right home. Taking care to work out your finances and your priorities will help you find a property that meets your needs.
