Live/work space has been a phrase that has gained a great deal of popularity in the last decade. Live work space has been around for centuries. Just picture the cobbler’s work space on the main floor with living quarters on the second floor or at the back of the commercial front. Fast forward, and you will have seen the convenience store owner with his family living and working in the same building. In the last decade, the challenge that Toronto has faced is that many of the two-story buildings have been gobbled up by developers to build large condo buildings. As a result, there are fewer and fewer options. Also, the investment acquisition cost to buy commercial buildings with a living suite on the second floor has become a financial challenge for many.
The pandemic has also shifted owner’s views of the live/work space. As we have all seen, many fortunate people have been able to work from home since March of 2020 in a highly effective manner. Another aspect that has pushed the live work space idea to a head is that the business overhead costs of carrying the work space without being able to open up shop during the pandemic have added to the financial stress that will likely drive more people to alter their cost expenditures moving forward more efficiently – in other words, the live work space will rise in popularity.
Who Tends To Buy Live/Work Space?
Many solopreneurs, entrepreneurs and otherwise business owners would prefer to have a single space to live and work out of versus the additional cost of carrying to spaces. There can be a great deal of savings if you are wise about the live work space investment. Many businesses are starting out or don’t plan to add additional in-house staff members like the live/work space in the long run.
How To Buy A Live Work Space In Toronto
There are a couple of options:
- Buying a freehold property with a zoned commercial space with a living flat on the second and third floors is the common option. The question here is whether 1) you can afford the commercially zoned city of Toronto city taxes (these are much higher than residential property taxes); 2) you have the necessary 35%+ downpayment to afford the purchase – banks require more of a downpayment for commercially zoned properties. If you can swing this purchase, it is a great investment long-term, as a residential developer will knock on your door one day in the future.
- A more recent option is a purpose-built live work space as a condominium. There aren’t many of these. The key is to focus on certain areas like the Junction, Bloor Street West and Carlaw/Leslieville area. The condominium documents will clearly state whether the live work space is legally permitted. Note: clearly state to your bank or mortgage broker that you are looking to buy a live work space if they want to do additional due diligence themselves. It’s less common to lend a mortgage like this and a slightly more complicated job for them.
Just like any job, you need to be able to unplug and focus on your personal life and vice-versa. Living and working in one space or building can be a challenge as you can literally and figuratively bring work home every day. Know your boundaries here. On the real estate investment side of things owning a live work space is an excellent way of developing wealth while balancing work and living expenses.