Can you live in a commercial property?

Arthur Bargan // Shutterstock If you’re a small business owner, there’s a good chance you practically live at your job. But can you live in a commercial property? The short answer is–it depends. Local zoning laws and insurance coverage make a big difference depending on your location. It’s usually wise not to live in a commercial property unless your lease includes living on premises. You don’t want to get evicted from both your home and business. Property owners insure their buildings for specific purposes. Illegally living in a commercial building can invalidate coverage, NEXT notes. What Is a Commercial Property? Commercial property is real estate used and zoned for business. Examples of commercial property include restaurants, retail stores, offices and warehouses. Some people own their commercial properties, but most people lease them. Commercial properties often function differently than residential properties. Buildings have features like loading docks, larger open spaces and elevators that are set up for business purposes. What Kind of Insurance Is Needed for Commercial and Residential Spaces? If you’re insuring a mixed-use property, your best bet is to get separate coverage for the commercial and residential portions of the property. If you rent, this might mean you need to sign a separate lease for the commercial and residential portions of your space.  One word of caution: It can be harder to insure mixed-use buildings. That’s because the residential portion will have higher risks from being attached to the commercial building.  Commercial buildings have more potential hazards: Fire, foot traffic, pests, insulation leaks and more. Be sure to get the right insurance before purchasing or leasing property.  What About Live/Work Property? Sometimes, buildings are zoned as a combination or mixed-use space. Live/work properties are often found in large cities. They typically have the business on the bottom floor, and the residential property upstairs. If your current building is not zoned as mixed-use, you may be able to apply for a change of zoning. It can be tough to get a building rezoned, but it is possible. People are sometimes more successful if they live on the boundary between two zoning types. In some municipalities it’s as simple as applying for a mixed-use permit, but not all local governments allow this.  Consult local real estate experts–like a realtor or a real estate attorney–before leasing or purchasing a commercial property you hope to live in. Some small business owners opt for a more expensive spot in the hopes that they can live there, but it’s risky if it does not work out. How Real Estate Zoning Works Real estate zoning is a set of regulations that designate sections of a locality for specific uses or purposes. State and local governments set up zoning laws.  Typical zoning categories include: Residential Commercial Industrial Combination or mixed-use Agricultural Historic Rural Local commercial zoning can get even more detailed. Some local ordinances have subcategories that designate particular areas, blocks or streets for retail, restaurants and office space.  Make sure you understand your local zoning before fully utilizing a commercial space–including living in it. It may not be possible for you to live and work in the same place. Consult local real estate experts, agents, attorneys and city officials to know for sure. This story was produced by NEXT and reviewed and distributed by Stacker.