As a multiple photographer studio, I quickly learned that having my staff work out of my home wasn’t the best option. Who wants their team members wandering around when you’re trying to finish breakfast? But I was still scared to death when I signed my first three-year lease for a 600 square foot space at over 600 dollars a month. What I didn’t realize was that during the next three years, I would grow my dream then BUY my own studio space. Here’s what I learned from buying a commercial studio space.
Why buy?
- I hate paying someone else money. Doesn’t everyone? I’d rather invest in my own future.
- Buying a commercial space for my studio meant lower overhead for my business.
- A mortgage is typically less per month than rent.
Consider these questions I had to ask myself:
- Should I buy a BIG building and then sub-lease space(s) to other businesses?
- Or, should I buy a smaller space that only houses my business?
- How much can I realistically commit to monthly mortgage payments? Am I becoming a real estate mogul?
In the end, I opted for a middle-ground choice! I found an old (decrepit!) house that was zoned mixed use (meaning you can live or work there). It was located close to a trendy area near downtown. So, I bought it for a steal and then labored over renovations and build it out over nine months.
What I learned from buying a commercial studio space:
First, the GOOD stuff…
- Overhead is roughly the same as my previous space (which was half the size!).
- I am actually invested in a up-and-coming community!
- Hopefully, the property will appreciate (grow in value) over the time I own it.
- It’s MINE, so if I want to do something crazy creative like painting the exterior a bright color, I can because my dreams are only limited by city permitting.
- I am a real estate queen! Ok, not quite, but I do own the building and I rent it to my business, which allows for some tax benefits. Rental income is taxed at a lower bracket.
Now, the BAD…
- Renovations are EXPENSIVE. We went over budget by almost double.
- When it comes to contractors, don’t be afraid to fire them if they’re bad!
- Get an estimate – yes, in writing.
- Get a “change approval” form for every single overage during a build-out/renovation.
- Take taxes into consideration when buying a commercial space. You are taking on the responsibility to pay property taxes.
- Commercial loans are different than personal loans. At this time, most banks only allow for commercial spaces that have a “balloon” period. This means that I have seven years to pay it off, or they’ll reassess my loan at whatever rate they deem appropriate.
In conclusion, we absolutely adore our quaint, historic bungalow studio. I am happy to have had this experience, but I won’t be buying another space for awhile. And if I ever purchase a commercial space again, I will make more informed decisions. Hopefully, this article will help you make good decisions during your own real estate transactions. Please comment below with any questions or ideas!
About Tracy Autem
Tracy is a wedding and portrait photographer based in Dallas Fort Worth, Texas. Starting Lightly Photography in 2005 she has grown her team to 3 associates specializing in weddings. In 2010 Tracy pulled her wedding work out into a new brand, Tracy Autem Photography while still personally providing portraits through Lightly. She received her Bachelors of Fine Arts with a concentration in photography from the University of Texas at Arlington.
Tracy is a wife & mommy and often described as talkative, transparent, emotionally invested and a woman with a smile. She values love and the relationships with her family, friends and clients. This defines her style as she focuses on story telling and romantic imagery.