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Can You Use a Condo or Townhouse Solely for Your Business Office?

Office in condo penthouse


For years I’ve rented a commercial office. It’s tiny. It’s one of those office-sharing arrangements downtown.  My landlord has the entire floor of a skyscraper.  She leases out individual offices to 40+ small businesses.

When I say small, I mean small. It’s about 120 square feet.  But it has a big window with a great view.

Since it’s just me in my office, it works great.  No complaints.  All employees who work for me are virtual.

The big problem with my office is that it’s a 30-minute drive home.  When I stopped working from home seeking an office, I thought it would be exciting to be downtown.  I was right. I loved it, but the time has come to get an office closer to home.  Our kids are in a few activities now so I want to count on a 5-minute drive home so I’m never late.

The problem with finding an office close to home is there aren’t commercial office spaces.

I live in a suburb that is mostly single-family detached homes but there are condo buildings and townhomes in the area.

One day I had a brainstorm.

Why don’t I rent a small condo for my office?

I checked the availability and prices.  They’re a bit more expensive than my small commercial office space, but I’d end up with way more square footage (450 sq. ft.).  I’d also save on gas and of course about 45 minutes of commuting time per day.

Studio apartment as office
This is similar in layout to mine. While it says “bedroom” it’s an open space that is ideal for my office/lounge layout.

I started my hunt for the perfect condo.

I only needed a studio apartment, but I’d take a one-bedroom. Fortunately, there’s a large multi-unit residential building 7 minutes from my house.  They had studios available.

I toured it. Loved it. Immediately filled out an application and gave my current landlord at the time notice.

It’s a done deal.

I get a small kitchen, bathroom, balcony, a large open space, plenty of light, parking spot and even a laundry room.  In the same development is a Starbucks, grocery store, liquor store, a few restaurants, my bank, etc. Everything I could ever need.

Is this a good office arrangement?

Type of business matters

If you run a business where you need to meet in-person with clients and customers, a condo or even a townhouse is not ideal.  Other tenants and your landlord probably won’t like it.  If you buy, other folks in the building and probably the HOA/strata won’t approve.

Also, if you have employees, a condo probably isn’t the best.  If you have one and they don’t mind, that could work but you don’t want 10, 20 etc. employees showing up to your condo to work.  Your neighbors certainly don’t.

My business is such that I don’t meet clients (because I don’t have clients).  I don’t have employees in my area… they’re all virtual.

The odd time I need to meet with someone we go for lunch.

Should you tell a prospective landlord it’s for work?

When I was looking at units, I did say it was going to serve as my office.  I explained what I do and that I don’t have customers, clients or employees showing up.  I would merely use the space during the day to work.

Not one prospective landlord cared.  It was not an issue at all.

I’m glad I was up front because they’d likely find out down the road anyway.  I don’t know why I thought it would be an issue.

Managed or individually-owned

This is an important point. When searching for a condo, I toured a couple that were owned by individuals.  They were great. The prices good.  But the big problem is they were owned by individuals who could one day want their condo back for whatever reason.  Maybe it’s to list on Airbnb.  Or maybe they sell it.  The end result is I’m out of an office.

My solution was to look for and find a building that is owned and entirely rented out by a property management company.  These outfits are unlikely to sell the units.  They certainly don’t want them back. They want long term, good tenants that pay on time.  Fortunately, I was able to find such a place.

Disadvantages of renting a condo for work over commercial space

While it’s almost the perfect arrangement, there are a couple of small disadvantages.

Cleaning cost

In addition to the higher rent, I have to hire cleaners.  In my commercial space, my office was cleaned daily.  I doubt I’ll have cleaners come in more than once or twice per month.  Moreover, I fear they’ll be coming when I’m working. That is not ideal.  I’ll do my best to find some after-hours cleaners.

I have to pay and manage tech

I need internet, a printer and scanner for my business.  In my shared office environment, this was all provided and maintained.  In a condo, I’m the IT department.

Advantages

I’ve already raved about the condo-as-an-office arrangement, but I’ll recap them here:

Way more space (for the money):

My commercial office cost $1,300/mo. plus $300 for parking.  The condo costs $1,775 plus $100 for parking.

My commercial office is at most 120 sq. ft. The condo (a studio) is 450 sq. ft. with balcony.  That’s 3X more space.

While I’m paying about $275 more per month (plus cleaners and internet), I get 3X the space plus save 45 minutes per day from commuting.

Why do I need so much space?

Because I have a sofa (buying another) where I’m going to set up a full lounge.  Besides, space is never a bad thing.  Trust me, I’ll find ways to use it.

Kitchen/bathroom:

I don’t care much for shared kitchens and bathrooms.  I don’t want to smell somebody’s left over fish dinner heating up in the microwave anymore.  It’s much better to have your own and that’s what I get. I can stock the fridge anyway I like.  I could on and on. I’m sure you agree.

Close to home

This is the main reason I’m doing this. I’m tired of leaving work before I have to but I do so just in case traffic is worse than usual.  Many nights of the week I need to be home at a certain time to get kids to activities.  I’ve never been late or missed one but that’s by sheer luck.  I much prefer living close where I can count on being home in 7 minutes.

Party pad

My friends and I all have young kids.  We want a monthly poker game.  My condo office is the perfect place for it.  It’s large enough for 5 to 10 guys.  There are no kids around.  It’s the perfect place. I’m sure I’ll host other party events there as well such as Super Bowl etc.

Can I write off the condo rent as a business expense?

Yes, I can.  I’m using it primarily for work. I’m not sleeping there.  I may host friends here and there but that’s maybe once per month.  For all intent and purposes, it’s an office and therefore it’s a legitimate expense.

Could I rent my condo office out on Airbnb on weekends?

I could, but I won’t. The last thing I want is strangers in my office.  Ain’t gonna happen.  But, if you didn’t care about strangers sleeping in your condo office, you could certainly cut down the expense by doing so.  I suspect I could get $80 per night.  If I managed to rent it 3 weekend nights per month, that’s $240. Not bad, but for me not worth it.

Should you BUY a condo for an office?

This is a good question for your accountant, but from a practical-use standpoint, it is.  I plan on buying one at some point when prices drop.  That said, I do have one reservation and that is the insanely rising costs of multi-unit property insurance rates.  In my neck of the woods, many buildings are having to pay double, triple or more in insurance premiums.  In some cases, they’re having a hard time finding insurers. No insurance means you can’t sell it.  Anything you can’t sell is worthless.

I’ll probably wait to see how the multi-unit insurance issue plays out before buying.

Will I miss the social aspect?

Nope, not at all.

The commercial shared office wasn’t exactly social.  Everyone ran their own little business.  We didn’t have happy hour.  It’s not WeWork. I toured a WeWork in downtown Vancouver and it sure had a fun vibe but I’m not really looking for a social life with my work.

In fact, I suspect I’ll see more people in my condo office given it’s close to home. My wife can swing by with the kids for coffee or a bite.  My friends work in the area so it’ll be easy to meet them for lunch.  Yeah, it’s definitely going to be great working closer to home, family and friends.

Related: Why I stopped working at home and pay for an office lease

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