Whether you’ve dreamed of living above your own shop or just want to cut costs, using commercial property as a residence can look like an attractive idea. But is living on commercial property legal? And if so, are there any costs or extra steps involved that are worth considering?
In this article, we’ll outline all the basics of commercial properties and the possibility of residing in one. Doing so will require a thorough understanding of what a commercial property is, the effects of your local zoning laws, and even the potential consequences of taking up a commercial residence.
What is Commercial Property?
Commercial property is real estate that is primarily used for business purposes. This can include anything from office buildings to warehouses, retail spaces, restaurants, and a wide variety of other property types.
Commercial properties are also typically larger than residential properties and have unique features tailored to their business needs. A warehouse, for example, may have loading docks, high ceilings, and reinforced floors. On the other hand, the average office building likely has conference rooms, elevators, and other amenities suited for its tenants.
Unlike residential properties that are often financed through a mortgage, commercial properties are frequently leased rather than sold. Commercial leases can also be very different from those of residential rentals – a detail worth considering if you’re thinking about investing in either option.
In any case, commercial property has its name because of its sole focus on accommodating businesses. This naturally creates more of an obstacle for people looking to live in a commercial space – but doing so isn’t totally out of the question.
What is Real Estate Zoning?
The best way to utilize your commercial space is to adhere to your state’s zoning laws. Zoning laws are regulations put in place to divide land and designate sections for specific types of development. Understanding your local zoning laws will be helpful if you’re looking to potentially reside in a commercial space.
The most common zoning designations include:
- Residential: for properties like apartments and trailer parks.
- Commercial: for businesses such as offices, retail spaces, and restaurants.
- Industrial: for factories and other types of industrial facilities.
- Agricultural: for farms and other types of agricultural properties.
- Rural: for properties in rural areas not served by utilities or other public services.
- Historic: for the preservation of properties that have historical significance.
- Combination/Mixed-Use: for properties that can have different uses, such as residential and commercial properties.
These zoning designations can be broken down even further into subcategories. Residential zoning, for example, covers single-family homes, apartments, trailer parks, and so on. Meanwhile, business-oriented designations can be narrowed down to accommodate factories, retail spaces, and more.
Despite all of these options, it may not be possible to combine different types of zoning. Each type of zoning designation has limits; starting a dairy farm in a residential neighborhood, for example, may be out of the realm of possibility.
If you’re looking to potentially combine your residence with a commercial space, it may be best to consult with a local expert and check your specific zoning laws. Total Mortgage also has experts licensed across the country who can help with your unique needs.
Can I Buy a Commercial Property and Live In It?
With zoning designations in mind, can you actually live in a purchased commercial property? The short answer: it depends.
While it is generally possible to live on a commercial property, it ultimately depends on the specific zoning laws in your area. In some cases, commercial properties may be designated for mixed-use, which means they can be used for both business and residential purposes. Still, you may be required to obtain a special mixed-use permit to live on a property that is not typically designated for residential use.
In the event that you’re able to take up a commercial residence, keep in mind that it will be different than living on a residential property in terms of size, features, and the amenities that are available. Commercial properties may have features like high ceilings, large windows, and open floor plans, but they might also come with less insulation, fewer amenities, and a lack of community that is present in most homes.
If those drawbacks are worth it to you, be sure to do your research and thoroughly understand your zoning laws. Consulting with a real estate attorney or other legal professionals will also ensure that you are fully aware of your rights and obligations as a property owner.
Can I Live In a Rental Commercial Property?
Even if your area has flexible zoning laws, a rental commercial space may present some unique challenges. This is because landlords often have their own rules that must be agreed to when the lease is signed. Some of these rules may restrict how you can use the property.
While it may be tempting to sneakily live in your rented commercial space, it is generally not a good idea to do so. This is because you could potentially face legal consequences for violating your lease terms or local zoning laws. Your landlord may even choose to evict you or take other legal action if they learn that you are living in their space without permission.
In the event that you get caught living in a commercial rental, you could be warned, fined, or even evicted. The extent of the punishment will depend on your location and your specific situation. In any case, it is best to always consult with a legal professional if you are unsure of the full details.
Where Can I Find Live/Work Properties?
If you want to live on a commercial property, start by understanding the zoning laws that apply to your area. This will help you identify properties that are legally designated for mixed-use or eligible for a special permit.
Depending on your area, you may also find commercial properties by exploring locally and looking for vacancy advertisements. Pay special attention to older areas of town, as these are more likely to be zoned for mixed-use.
Ultimately, your best bet for finding a commercial property that is suitable for living in may be to work with a real estate agent or broker who is familiar with the local market. Many agents specialize in either residential or commercial properties, but some do work with both. They can help you to identify properties that are suitable for living in and can guide you through the process of purchasing or leasing a commercial property.
To get started, get in touch with one of Total Mortgage’s expert loan officers today.
Source: totalmortgage.com