What is
a live-work unit?
.
Live/work units are hybrid properties that combine commercial and residential space.
They are often found in urban areas and are a popular choice for small businesses, entrepreneurs, and artists. Live/work units can be a great way to live and work in the same place, which can save time and money on commuting.
Many local authorities require that a certain percentage of the space in a live/work unit be dedicated to commercial use. This is to encourage businesses to move into areas that are less congested and to support the local economy.
Who
can buy a live/work unit
Anyone with a sufficient income can buy a live/work unit.
Lenders will typically require borrowers to meet certain income requirements in order to qualify for a mortgage on a live/work unit.
These requirements may vary from lender to lender, but they typically include:
- Income from employment
- Self-employed income
- Pension income
- Investment income
- Rental income
Lenders will also consider your other financial obligations, such as existing debts and monthly expenses, when determining your eligibility for a mortgage.
If you are interested in buying a live/work unit, it is important to talk to a mortgage advisor to discuss your individual circumstances and determine if you meet the eligibility requirements.
How to get
a live/work unit mortgage
Live/work unit mortgage can be more flexible than traditional mortgages, but they can also be more difficult to compare.
Because there are no advertised rates and lenders will offer you a bespoke deal based on your circumstances, mixed-use mortgage rates and terms can vary widely from lender to lender.
To get the best possible deal, follow these three steps:
Have a clear vision for your business.
This includes having a thorough business plan that outlines all associated costs and expenses.
Get your documents together.
This includes your business plan, proof of ID, bank statements, proof of income and expenses, and details of any other property you own.
Speak to a specialist commercial broker.
Live/work unit mortgages are complex deals, so it’s important to get expert advice from someone who has experience with this type of borrowing and knows the market.
How Are
Mortgages on a live/work unit different.
A mortgage on a live/work unit is different from a mortgage on a house in a few key ways.
First, a mortgage on a live/work unit is secured against the commercial portion of the property, while a mortgage on a house is secured against the entire property.
This means that if you have a mortgage on a live/work unit and you default on your payments, the lender can only foreclose on the commercial portion of the property, not the residential portion.
Second, mortgage rates on live/work units are typically higher than mortgage rates on houses. This is because lenders perceive live/work units as being riskier investments.
Finally, you cannot sell the commercial portion of a live/work unit without first selling the entire property. This is because the commercial portion of the property is considered to be an integral part of the live/work unit.
Can you run any
business from a live/work unit?
Yes, you can run any business from a live/work unit, but some businesses are better suited to a traditional house or commercial space.
Here are some examples of businesses that may not be ideal for a live/work unit:
- Retail stores
- Restaurants
- Bars
- Hotels
- Hair salons
- Beauty salons
- Medical clinics
- Banks
- Insurance companies
- Financial services companies
These businesses typically require more space, have specific planning requirements, or generate a lot of noise or traffic.
Here are some examples of businesses that may be well-suited for a live/work unit:
- Home offices
- Consulting businesses
- Creative businesses (e.g., artists, writers, designers)
- E-commerce businesses
- Online businesses
- Personal services businesses (e.g., massage therapists, dog walkers, personal trainers)
When choosing a business to operate from a live/work unit, it is important to consider the following factors:
- Planning requirements: Make sure that the live/work unit is zoned for the type of business you want to operate.
- Space requirements: Does the live/work unit have enough space for your business needs?
- Noise and traffic: Will your business generate a lot of noise or traffic? If so, make sure that the live/work unit is located in a suitable area.
- Customer access: Will your business need to be accessible to customers? If so, make sure that the live/work unit is located in a convenient location with adequate parking.
If you are considering operating a business from a live/work unit, be sure to talk to a local planner or council official to discuss the specific requirements in your area.
Contact.
LET’S TALK.
To discuss how we can help you please contact us using the details below for an initial chat or to arrange an appointment with one of our Advisors in Cornwall.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED UPON IT.