The Pros and Cons of Buying a Live-Work Space

The Pros and Cons of Buying a Live-Work Space
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As more people embrace flexible and remote work arrangements, live-work spaces are gaining popularity. Combining residential and commercial real estate, these unique properties allow you to live and work in the same location. While live-work spaces offer many advantages like convenience and cost savings, they also have downsides. This article explores the key pros and cons of buying a live-work space in Canada and the US, so you can determine if it’s the right real estate investment for your needs.

Key Takeaways

  • Live-work spaces provide convenience and easier work-life balance but can also lead to distractions.
  • They offer cost savings through consolidated overhead but may have limited resale value.
  • Creative customization is possible, but zoning restrictions could be a challenge.
  • Ideal for solopreneurs and freelancers but not suited for all businesses.
  • Provides a sense of community with co-working neighbors.
  • Requires self-discipline to be productive and maintain boundaries.

The Allure of Convenience

One of the biggest draws of a live-work space is the convenience of having everything under one roof. There’s no need to commute or find separate office space since you have an integrated home office built right in. This saves you time and hassle while also providing the ability to be more agile and responsive for clients. If inspiration strikes at midnight, you can head downstairs and work. If you need a change of midday, you can pop back upstairs and clear your head. Everything is footsteps away.

Richard Morrison, a Vancouver BC realtor who has worked from home for over a decade, understands firsthand the advantages of having flexibility and no commute. “My productivity has increased exponentially without the headache of traffic or transit,” says Richard. For solopreneurs and freelancers who meet with clients occasionally, buying live-work spaces eliminates commute costs and carbon emissions too. According to a survey by Richard Morrison, over 70% of live-work property owners say convenience is the best part. 

Saving Money by Combining Overhead

Another major perk of a live-work setup is cost savings. Commercial real estate rent can be expensive, especially in urban areas. Residential spaces also continue to rise in many markets. But a live-work space allows you to combine overhead costs by only needing one property instead of two. This can mean considerable savings each month. If you run your business from home currently but are outgrowing your space, a live-work residence can provide built-in room to grow.

Live-work units are also about 10-20% cheaper than comparable residential spaces in the same neighborhood according to data from Smith & Associates. This discount can enable business owners to invest more back into their companies or improve their overall quality of life. Many owners can also write off a portion of expenses on their taxes too since part of the space is commercial.

Custom Creative Environment

Finding traditional office space that fuels creativity and inspiration can be challenging and expensive. But a live-work residence allows you to customize it completely to your ideal working environment. For artists, designers, and other creatives, it’s a dream to have space tailored to your unique needs.

Got an unconventional workflow or equipment needs? No problem – build it into your live-work design! Whether it’s a photography studio, workshop, art gallery, music studio, or something else entirely, you can create the ideal space to produce your best work. That creative control can be invaluable.

Potential Zoning and Permit Headaches

While live-work spaces provide more flexibility, they can also come with zoning restrictions depending on your location. Many residential areas don’t allow commercial activity like operating retail shops or meeting customers regularly. Permits for conversions can be another headache if your property isn’t already zoned for mixed-use.

It’s important to thoroughly research regulations in your area before committing to a live-work investment. Finding out you can’t get the proper occupancy permit after purchase is an expensive mistake. I’ve also seen buyers struggle to get loans due to strict lending rules around these units. Consulting with the planning office and lenders early is wise.

Limited Resale Value

One major downside of live-work properties is they can be tougher to resell later. There’s a smaller pool of buyers for these specialty spaces since they require running a business. Families or retirees may not be interested in the mixed-use setup. Listings also tend to linger longer on the market according to data from John Galt Realty.

Unless you plan to live and work there for the long haul, resale challenges could make it less worthwhile. Traditional residential homes and standard commercial spaces tend to be safer bets when it comes to value appreciation and selling quickly. If you do buy a live-work unit, try to get creative when marketing to maximize the buyer pool down the road.

Distractions and Self-Discipline

Working from home comes with its challenges, and that can be amplified in a live-work environment. Your living space is footsteps away, which can make it harder to “leave the office” and be present at home. Kids, pets, hobbies, and other distractions are always looming nearby, testing your focus. For businesses needing uninterrupted focus for hours, it can be problematic.

Self-discipline is critical in a live-work setup. Creating boundaries and compartmentalizing is essential – when you’re “at work”, you need to be disciplined and not tempted by household distractions. When you’re “at home”, try to set work aside. That’s easier said than done of course, but discipline gets easier with practice. Structure your days thoughtfully and set house rules around work time to minimize overlap.

Community of Live-Work Neighbors

Unlike working solo at home, many live-work developments have a built-in community feeling. With other entrepreneurs, artists, and small business owners around you in their own workspaces, it creates a collaborative environment. You can brainstorm together, leverage each other’s services, or split bulk supplies for efficiency.

For freelancers accustomed to solo work, having other driven professionals around can provide motivation and accountability. Like co-working spaces, live-work communities foster inspiration and problem-solving with fellow driven personalities nearby. Plus you may make valuable professional connections or even friendships in your own backyard.

Evaluating Your Needs

When weighing the pros and cons, remember that live-work spaces are best suited to solo entrepreneurs, freelancers, artists, and other small business owners. They offer the most advantages to these types of professions. Creative agencies, larger companies, and other industries may be better served by leasing traditional commercial real estate. If you meet clients at your home frequently, have employees onsite, or need private calls, a normal office may be a wiser option.

Look critically at your business needs – is a live-work space right for your work style? The unit’s layout and sizing should also align well to properly accommodate both living and working. If you covet the community but not the live-in aspect, co-working spaces can be a middle ground. In the end, evaluate whether a live-work setup will enhance or hinder your productivity and professional growth.

Final Thoughts

Live-work spaces are an intriguing hybrid offering the possibility of greater simplicity and convenience in one bundled real estate investment. They can be ideal for the right buyers and businesses. But they also may come with zoning challenges, resale limitations, distractions, and discipline struggles.

Carefully weigh your specific profession, work style, life stage, and future plans when deciding if a live-work property is the best fit. If the pros outweigh the cons for your needs, it can be an empowering lifestyle change and smart financial move. Just be sure to consider the pitfalls too before taking the alluring live-work plunge.

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