When you’re starting your own business, it can be easy to focus on making money and improving your business processes instead of thinking about your personal finances and housing needs. But if you’re looking to buy a home, now might be the time to start making plans to purchase your first house or condo!
This guide will help small business owners make sure they have everything they need in order to take advantage of their opportunities and make the most of their investments as they transition from the corporate world into small business ownership. Here are ten tips for small business owners who are buying a home!
Check your credit score
One of the first things you should do when you’re thinking about buying a home is to check your credit score. Your credit score is a measure of your financial health, and it’s important to know where you stand before you start the home-buying process. Here are ten tips to help you get started on the right foot as a small business owner who is looking to buy a home
Choose an area that matches your business needs
- Look for an area that has the potential for growth. You want to choose a location that will still be popular when your business expands.
- Consider the cost of living in the area. Employees will be more likely to stay in an area with a lower cost of living.
- Think about the commute. A long commute can add stress to employees’ lives and make them less productive.
- Research the local market. You want to be sure that there is a demand for your product or service in the area you’re considering.
- Find out about zoning regulations. You don’t want to open your business only to find out that you’re not allowed to operate in that location.
Look at comparable sold homes
In order to get an idea of what you can expect to pay for a home, it is important to look at comparable homes that have recently sold in the area. This will give you a good idea of the market value of homes in the area and help you determine how much you should offer on a home.
If you’re considering buying a newly constructed home, be sure to find out when it was built and then compare the price with other homes that were built around the same time.
Invest in improvements
- Invest in improvements that will make your home more energy efficient. This will save you money on utility bills and make your home more comfortable to live in.
- Consider adding solar panels to your home. Solar panels can provide power for your home and help offset your energy costs.
- Look into green construction materials and methods when making improvements to your home. This can help you save money on construction costs and make your home more environmentally friendly.
- Make sure that any improvements you make are in line with the local zoning regulations. This will ensure that your home meets all the requirements for zoning and can be used as intended.
- Research the market value of similar homes in the area before making any improvements.
Buy in areas with good resale value
One of the most important things to consider when buying a home as a small business owner is the resale value. You want to be sure that you buy in an area that has good resale value so that if you ever need to sell, you can get your money back out of the property. Here are some tips to help you find areas with good resale value
- Look for areas that are growing. This could be in terms of population or businesses.
- Consider the amenities in the area. Things like good schools, public transportation, and parks can make an area more desirable and thus increase its resale value.
- Check out the local economy.
Do you have enough down payment saved
Depending on the type of loan you choose, you may need to have as much as 20% of the home’s purchase price saved for a down payment. That can be a lot of money, especially for first-time homebuyers. If you don’t have enough saved, you may need to wait longer to buy or look for a less expensive home.
What’s your credit score You’ll need good credit to qualify for a mortgage, and it will also help with rates and how much you pay in interest over time. You’ll want to check your credit score before shopping around for loans and mortgages because lenders will ask for this information when applying. Do you know what kind of mortgage is best suited for your needs There are many different types of mortgages available today, but not all are right for everyone.
Can you afford the mortgage payments?
Owning a home is a huge financial responsibility. Before you purchase a property, be sure that you can afford the mortgage payments. A good rule of thumb is to make sure your monthly mortgage payment is no more than 28% of your gross monthly income. The 28% figure was derived from research done by the Harvard Joint Center for Housing Studies and Harvard University’s Faculty of Arts and Sciences Finance Committee on what percentage of monthly household income should go towards housing costs in order to maintain stable and healthy finances.
If you are going through an independent mortgage broker, they will usually have access to software that can help determine whether or not you meet this guideline. However, if you are going through a bank or credit union they may only provide information based on your credit score and assets.
Understand what closing costs are
When you’re a small business owner, buying a home comes with its own set of challenges. One of the biggest challenges is understanding all of the costs associated with buying a home. Closing costs are fees charged by the lender, title company, and other parties involved in the home-buying process. They can add up to several thousand dollars, so it’s important to be prepared.
Here are ten tips to help you understand and manage closing costs
- Know what types of loans you qualify for In order to know how much money you’ll need to buy your new home, it’s helpful to know what types of loans you qualify for. For example, FHA loans require lower down payments but come with higher monthly mortgage insurance premiums than conventional mortgages.
- Shop around Find out what different lenders will offer in terms of rates and loan programs before deciding on one. You might find that there is more than one option that fits your needs better than others do!
- Understand taxes It can be easy to forget about taxes when planning your purchase but they should not be overlooked! Before purchasing a new property, make sure that any future tax deductions are taken into account when calculating the total cost of ownership.
Ask about property taxes, flood insurance, and utility bills
When you’re buying a home, be sure to ask about property taxes, flood insurance, and utility bills. You’ll want to know how much these will cost you each month so that you can budget accordingly. Property taxes can vary greatly from one area to another, so it’s important to do your research. Flood insurance is also something to consider, especially if you live in an area that’s prone to flooding. And finally, utilities bills can also add up, so be sure to ask about those as well.
Be honest with yourself about location, commute time, and parking.
When you’re looking for a home, it’s important, to be honest with yourself about your needs. If you’re a small business owner, you’ll want to consider things like location, commute time, and parking. A home that’s close to your business will make it easier to get to work, and you’ll want to make sure you have enough parking for customers or clients. You should also think about things like the size of the home and whether you need a dedicated office space.