You don't need a freestanding building, and you don't want the hassles of maintaining a property, but you'd still prefer to own -- rather than rent -- your business location. The solution? An office condominium.
Office condos are not for everyone, but many entrepreneurs have discovered that buying office space rather than renting it saves money and adds to their asset base, says Neil Barone, president of Barone Commercial Resources Inc., a commercial real estate brokerage company in Brielle, New Jersey.
On the plus side, an office condo lets you build equity and enjoy a number of tax advantages. Drawbacks include little or no room for expansion, the possibility of difficulties when you want to sell the property, and the risk that the property could depreciate significantly in value in a depressed real estate market.
Barone says office condos were a great investment back in the mid-1980s, when properties were appreciating significantly every year. Although the market crashed in the late '80s, it now appears reasonably stable again. "Office condominiums are not appreciating as much as they once did," Barone says. "So if you buy a condo, it should be because you want to save on rent and build equity, not because you see it as an investment that you can sell for a quick profit."
Just about any type of established business that can predict its space needs with reasonable certainty is a candidate for an office condo. Barone advises consulting your accountant first to determine whether you will benefit financially from owning rather than leasing.
Finding a business condo can take a bit of work. New projects are generally well-marked, but most established business complexes don't let owners post signs for resales. Check commercial real estate classified ads or contact a real estate broker to start your search.