A common misconception amongst business owners is that they are not eligible for the same benefits as regular home buyers. This couldn’t be further from the truth! In fact, there are several advantages that business owners have when buying a home.
This article will discuss some benefits business owners can take advantage of when buying a home.
Access to More Financing Options
As a business owner, one advantage you have when buying a home is access to more financing options. While conventional home loans are available to all homebuyers, as a business owner, you may also be eligible for SBA 7(a) or 504 loans, home loan refinancing, and other options through your financial institution or credit union. This can give you added flexibility in terms of interest rates and repayment terms, allowing you to save money and better manage your financial obligations. It’s essential to compare the financing options available carefully to ensure you’re getting the best deal possible. However, with access to these additional options, business owners can often secure more favorable financing for their home purchases.
The mortgage interest and property taxes associated with owning a home can be deducted as business expenses, potentially lowering your tax bill and increasing your bottom line. Additionally, if you use part of the home exclusively for business purposes, that portion can be deducted as a business expense. Talking with a qualified accountant or tax professional before making any big purchasing decisions is essential, but owning a home for your business could provide significant tax benefits. So consider taking advantage of this opportunity and add it to your arsenal of cost-saving measures.
Leverage Equity to Grow Your Business
If your business is doing well, you may be able to use the equity in your business property to help finance its growth. You can do this by taking out a second mortgage or line of credit against the value of your property. Doing so can help you avoid taking out a bank loan, which can be difficult and expensive.
Build Your Credit Rating
Owning a property and making regular mortgage payments shows lenders that you’re responsible and financially stable. This can lead to better terms on loans and increased access to credit in the future. That said, it’s essential to remember that owning property also carries extra responsibilities, such as maintenance and property taxes. However, in the long run, the potential improvement to your credit rating can make homeownership a worthwhile investment for business owners.
Personal Use of Business Property
Suppose you own the property where your business is located. In that case, you can use it for personal purposes as well as for business purposes. This means that expenses related to those areas, such as renovation costs or property taxes, can become deductible business expenses. However, it’s important to note that this deduction only applies if the area is used exclusively for business purposes and not for personal enjoyment.
Additionally, it must be deemed a customary and necessary expense concerning your industry. It’s always best to consult your accountant or financial advisor before claiming any deductions related to personal use of the business property. By taking advantage of this perk, you can save money on your personal and professional expenses. Not only does this benefit make homeownership more financially feasible, but it also provides added flexibility in how you utilize your property.
Increase in Property Value Over Time
Like all real estate, commercial properties tend to increase in value over time. This means that if you ever choose to sell your property, you are likely to profit. You can then use this money to invest in another property or put it towards other goals, such as retirement or college savings for your children.
Owning vs. Renting Advantages
Owning your own commercial property has many advantages over renting one – tax breaks, building equity, and expansion opportunities, just to name a few! However, there are also some disadvantages that should be considered before making the decision to purchase – such as maintenance costs and repair bills. Weighing the pros and cons carefully will help you make the best decision for your business needs.” Renting offers flexibility that owning does not – if your business needs change or expand rapidly, it is much easier (and less costly) to find a new rental space than it is to sell your existing property and buy or build anew.”
As you can see, there are many advantages that businesses owner enjoy when buying a home. From access to more funding options to building equity over time, owning commercial property provides many opportunities that renting does not. Carefully weigh the pros and cons before making a decision, but don’t discount homeownership outright – it may be right for your business needs!