The COVID-19 pandemic has changed the way we do business, perhaps permanently. More than a third of Americans say they are working from home more than when the pandemic began. While some are now returning to the office, others have transitioned to a fully remote position. With telecommuting becoming so commonplace, you may wonder whether you can run your business from your apartment.
Steps to take if you plan to run a business from your apartment
Before you make plans to run your business from your apartment, here are some steps to take to ensure you are following the guidelines of your lease and making the most of your remote business.
1. Check your lease
Running a business from your apartment may breach your lease agreement. If your lease has a statement such as “You shall use the apartment for living purposes only,” or “This lease prohibits income-producing businesses in your apartment,” you can’t work there. If there is a statement like “Home office use is permitted provided that no employees or clients come to the apartment,” you can work from home if your business activities don’t involve physically interacting with others.
If your lease doesn’t mention running a business, don’t assume you’re free to do as you like. You may run a business, but you should make sure it doesn’t violate any other terms of your lease. For example, teaching drum lessons may disturb other renters. It’s a good idea to err on the side of caution and discuss your business plans with the apartment owner. They may amend your lease to include clauses that let you run your business from the apartment. A conversation with the property owner could also get them to change a lease that prohibits business activity.
Don’t assume the apartment owner simply won’t know about your business activities. It’s very common for neighbors to alert apartment owners of business activities that breach lease terms. If you’re found to have a business that violates your lease agreement, you’ll usually get ordered to stop the business immediately. If you don’t comply with the order, the apartment owner has the right to evict you.
2. Research and follow local laws
Some state laws and city zoning rules limit how you can use your apartment for a business, so make sure you do your research and stick to the rules. For example, in New York City a home-based business can take up no more than 500 total square feet of space and no more than 25% of a house or apartment’s floor area. You also can’t use a residential space as a commercial space, so you can’t welcome customers or have employees working in your home.
Some locations also have different rules for different kinds of businesses. For example, different rules may apply if you’re running a beauty salon, a home-based food business, or a bed and breakfast. You may also need to register your business, even if it satisfies the home-based business requirements. You can usually register your business online or in person at your local city hall.
If you’re unsure about the laws that apply to businesses run from apartments in your area, get some legal advice. Some cities have small business services that give people free business legal advice and support. If these services aren’t available in your area, any lawyer experienced in small business law should be able to help you out.
3. Get the relevant business licenses
If you can work within the rules for home-based businesses and your lease permits it, you can apply for a business license. A business license may let you welcome clients or have employees working in your home, for example. Visit your local city hall and explain your business plans. They can give you an application form for the right license. Make sure you wait to start your business until you get your license, otherwise, you could face fines and other penalties.
4.Take advantage of tax breaks
If you’re a business owner, rather than an employee, you can claim a range of tax breaks for running a business from your apartment. Business owners with dedicated home offices in their apartments as their primary place of business may claim a percentage of their rent. Another option is using the standard deduction rate of $5 for each square foot of home office space, up to a total of 300 square feet.
As a business owner, you can also claim a percentage of other home-related expenses including utility bills, property insurance premiums, and any apartment maintenance and repairs you pay for. If you’re not sure of all the tax breaks available to you, discuss your circumstances with a qualified accountant.
5. Upgrade your Wi-Fi
Some people find their Wi-Fi inadequate for running a home business, especially if they’re testing it with video conference calls or have a few employees using the same connection. Moving your router closer to your computer, upgrading your router, or adding a Wi-Fi extender can all improve your internet. Using an ethernet cable, rather than relying on wireless internet can also strengthen your connection. You might also change your Wi-Fi band. The 5-GHz band provides faster internet but its range is shorter than 2.4 GHz. Experiment with both settings to see which works best.
What to do if you are unable to run your business from your apartment
Consider renting a different apartment
If running a business breaches your apartment’s lease agreement, you need more space for your office furniture, or your current apartment is too noisy for video calls, you could consider renting a different apartment for your new office or a co-working space. If you can’t swing the rent on your own, consider pooling resources with a colleague or friend in a similar situation.
A one-bedroom apartment can be an affordable option for work-from-home employees seeking more space. As an added bonus, it’s much easier to separate your work and home life if you have a dedicated office space outside your living quarters.
The global pandemic has given many people the ability to work from anywhere, including their apartments. Laws govern suitable business use of apartments, but so long as you follow them a room in your current apartment or a new rental can become the perfect home office.
Rent a co-working space
A co-working space could be a great option if you are unable to run your business from your apartment. Many local buildings offer co-working spaces for professionals to rent to be able to run their business from an unofficial office setting. Most of these facilities will even offer communal coffee, snacks, and refreshments. This could also be a great option if you lack focus in your apartment setting. You’ll have the option to converse with other professionals while maintaining your own independence.
Tips for working remotely in your apartment
- Create a designated working space – Make your working space your own with a comfortable desk and chair, ideally away from any distractions such as your tv or bed
- Cancel out any noise – Apartment buildings can be noisy at times, but noise canceling headphones and light music can help you focus as you work
- Maintain regular work hours – It can be hard to set a start and end time when working from home, but a regular schedule will help you maintain a healthy work/life balance
- Take breaks – Take a walk outside, get a bite to eat, and clear your mind throughout the day to help you remain focused
- Set ground rules with other occupants of your apartment – If you share your living space with a partner or roommate, make sure you set ground rules for the noise level of your space during working hours
Working from home has become the new norm for many industries. If you are working remotely and wondering if you can run a business from your apartment, it’s important that you consult your lease and make sure you are not violating any terms of the agreement. Once you’ve set up your ideal work from home environment, you’ll be able to enjoy all the comforts of home as you conduct your business.
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