Should You Rent a House for Your Business?


You need a place to run your business, and you’re not sure whether you’re ready to lease a commercial property or buy a brick-and-mortar space for your operations. Running your company from a rental home is another option that is often underutilized. Let’s break down the pros and cons of this major decision.

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Pro: Saving Money

Depending on your local real estate market, renting a residential space for your business could be cheaper than renting a commercial space or buying a new home. Furthermore, by renting a home with enough room to run your company, you’re only responsible for one monthly rent payment. If you were to rent a commercial space in addition to your personal housing, you would have to juggle another monthly payment.

Pro: Eliminate Your Commute

While this perk may not apply if you rent a home that is separate from your personal lodgings, nixing your commute is definitely an upside to running your business from the same property where you live. Eliminating your commute will help you open up more productive hours in your day and save on gas.

Pro: Relocate Easily

Breaking a residential lease early can be a headache, but typically, it’s easy to find someone who will sublet your space if you need to move. However, commercial leases are not always so flexible. Operating your company from a rental home can grant you more flexibility should you decide to relocate your business.

Con: Restrictive Zoning Laws

If you simply want to set up a home office, it’s unlikely that anything in your lease or local zoning laws would prohibit this. But what if you want to meet with clients in your rental home or even sell physical products? You’ll need to research your neighborhood’s zoning laws to see if this is legally permitted. Chron states that if you are renting in a residential neighborhood, it’s unlikely that you’ll be allowed to run a retail store or restaurant out of your home.

Con: Lack of Modifications

While you can make some aesthetic changes to a rental property, you won’t be able to invest in large-scale renovations. If you need any special infrastructure to run your business, renting a residential space may not work for you.

If you’re considering renting a home for the sake of your business, it’s very important to go over your lease in detail to find out what kinds of changes you could make. Food52 states that you’ll generally be allowed to paint your walls, re-route your cable wires, nail art to your walls, update your lighting fixtures, and even mount shelves.

Con: Moving Unexpectedly

When you’re renting a home, the amount of time you can spend living there is ultimately up to your landlord. For example, if your landlord decides that they want to renovate the building, they can end your lease and that of all the other tenants, too. Depending on your state’s regulations for rent raises, your landlord could also increase your rent dramatically – and if your budget for your business is already tight, this could cause you unnecessary stress. If you do decide to rent a home for your business, have a backup plan in case you need to vacate with short notice.

Depending on your needs, a rental home could be the perfect fit for your company. But it’s also important to be aware of the downsides. By weighing these pros and cons, you’ll be able to make the right choice for your business.

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Written by Marcus Lansky (Email [email protected])