|With one in six South Africans now reportedly self-employed, buyer demand for properties with home offices or flats is rising rapidly and judging by the growth in demand we receive for properties with offices or easily convertible out buildings the trend will continue to strengthen. |
While a substantial number of these buyers are entrepreneurs many are also employees working from home either part or fulltime with their bosses’ blessings. From architects and public relations practitioners to hair stylists and bed-and-breakfast hosts, the home is increasingly being required to fulfill a dual function in people’s lives.
Driving this trend is a combination of cutting-edge yet affordable and easily available technology, a keen embracing of entrepreneurship and an aversion to spending lengthy periods commuting to and from work on increasingly congested roads.
Added to this is the incentive of reducing overheads. By not having to pay rental on office space, you’re not only saving money but also building up equity in your property as you improve it.
For those looking seriously at buying residential property to accommodate a home-based business high on the list of priorities is to ensure the relevant technology such as ADSL and cell phone reception exists in the area. It’s also important to check the business is acceptable in terms of local by-laws. Further to this, and it can reverberate on you at a later date if you fail to do so, is to ensure that neighbours have no objections, especially if the nature of the business is for people to come and go on a regular basis.
Another serious consideration is that of security. Security is as critical at home as it is at a typical office and it’s therefore important to be able to control visitor access to the property at all times. In my opinion, this is best done using a system that features automatic gates along with a closed circuit television and intercom system that allows callers to be screened from a safe vantage point.
It’s also important to ensure that a home office is neat, professionally equipped and away from domestic noise and interference. While not only critical to the success of the business it also raises the value of the property.
Finally, my advice to those considering purchasing a dual-function property is to liaise openly and honestly with both their estate agent and loans consultant regarding proof of income and other relevant information.
The major banks have similar lending criteria, which include providing them with a detailed history of income. They will also in most instances require a deposit to mitigate lending risk, which is considered to be higher for self-employed people, especially if they haven’t been in business very long.
Additionally, an application for a home loan will need to be accompanied by a clean credit history and proof that the business – if already up and running – has been operating with some degree of financial success.