What freelancers should consider when choosing a home

by Carol Poster

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If you get a gig creating a Hollywood film or a television series about freelancing, you'll portray young, attractive free spirits and their quirky but stylish apartments in trendy neighborhoods in Brooklyn, Berlin, San Francisco, or Brighton.

In reality, just as all freelancers are not necessarily young, thin, and gorgeous, so ideal homes for freelancers are not small, noisy apartments in expensive urban neighborhoods. Often a suburban or small town house may be more functional.

This matters because the right home environment can improve your productivity, help you build retirement savings, and contribute to your financial stability. Choosing the right home isn't the same as creating a backdrop for a story about the hopes, loves, and disappointments of fictional characters. It is a matter of finding the best space in the best location for the best price.

Freelancers, especially those who work or sell their products primarily online, have considerably more freedom in choosing where to live than employees. Although some freelancers are anchored to specific locations by friends, family, or spousal employment, many of us can live anyplace with a decent internet connection.

Because our homes are also our workspaces, though, when we look for houses, we need to think about issues that many buyers and real estate agents rarely consider.

Geographical and Financial Choices

While your first priority in housing is finding a home you will enjoy, choice of home location is also a business decision. Your home is an investment, a workspace, a business expense, and a tax deduction. This means considering finances as well as scenery, neighborhoods, and space. If you are growing your business or prone to boom and bust cycles, use your geographical freedom to save money, so you don't become house poor in a client drought or be forced to take on projects you hate just to pay your mortgage.

The median home price in the United States is approximately $200,000, with Dayton, Ohio averaging a very affordable $55,000 and Aspen, Manhattan, San Francisco, and Santa Barbara topping a million dollars. Even an hour or two drive can make a difference. For example, the average home price in Denver, Colorado is $380,000 or a monthly cost including principal, interest, taxes, and insurance (PITI) of slightly over $2,300, but 100 miles south in Pueblo, with the same mountain scenery, average homes cost under $150,000 ($1,200 per month PITI).

Even if you need to meet with clients in a large urban area, you can live a few hundred miles away to save money and travel in a few times a month. The savings on your mortgage will cover the transportation and hotel costs, all of which are tax deductible.

Often the best values in housing are in areas losing population due to lack of employment opportunities, something irrelevant to you as you bring your business with you. For a few years, I lived in a small Kansas town where historic nineteenth-century limestone houses cost under $80,000 ($700 PITI per month). All the freelancer essentials were within a five-minute walk, including an espresso bar, a 24-hour gym, an art gallery, walking trails, and two community theaters.

Makers and artists who need studio space may find farming communities, small towns, or rust-belt cities ideal. College towns and nearby rural areas offer cultural amenities, research resources, and eager interns. Some municipalities offer cash incentives, tax rebates, interest-free loans, partial repayment of student loans, and other incentives to prospective residents.

When choosing a state, also consider taxes and regulatory environment and, most importantly, health insurance as price, plans, and availability vary considerably from state to state.

Buying in the Zone: Location Type and Regulatory Compliance

Municipal or county zoning regulations and planned community covenants, conditions, and restrictions may limit the amount of space you can devote to a home business, the number of employees you can have, signage, your business hours, and the amount of traffic you can generate (whether deliveries or customers).

Zoning laws often operate under a "don't ask, don't tell" system. If you are a writer, programmer, designer, or telecommuter working quietly at your computer, you're unlikely to be affected by zoning issues, but complaints about zoning violations from a single annoyed neighbor can result in fines, legal troubles, or even criminal charges for crafters, makers, musicians, lifestyle coaches, appliance repairers, and other people whose work may involve noise or frequent client visits or deliveries.

Zoning types vary with municipalities, but generally residential areas are the most restrictive and office, mixed use, rural, and certain types of commercial areas the most home-business friendly.

An added benefit of mixed use areas is that you are close to potential clients, suppliers, and, of course, coffee shops. At the other end of the scale, for writers, designers, or painters who prize space and solitude, rural areas are ideal. Older freelancers should consider active adult or 55+ communities, which provide quiet living, interesting cultural activities, and a ready-made social network. Family-friendly suburban areas with backyard pools and noisy children may be problematic if you prefer quiet as you work.

Housing Your Technology

Before buying charming Victorian home, a remote farmhouse, or a forest cabin, consider technology issues. Fast and reliable internet is not just convenience; it's a business necessity. Good 4G mobile service is crucial, as it provides voice communications and a backup for your internet service.

More importantly, older homes were not designed for twenty-first century technology and may have fire hazards such as aluminum wiring, inadequate numbers of outlets, or insufficient electrical capacity. Many older homes have a maximum of 60 to 100 amp service, but for a home office with multiple electronic devices, you need 150 to 200 amps.

If you would need multiple extension cords, power strips, or multi-outlet converters to set up your office in a new home, have an electrician install additional outlets. Always have a full electrical inspection before bidding on a house and get an estimate of upgrade costs. Given the potential fire and electrocution hazards of inadequate systems, this isn't something you can put off for a few years. You can live with an ugly bathroom vanity but not with an electrical fire.

Finding a Work Space

Some people choose houses because of elegant living rooms, cutting-edge professional kitchens, or great back yards. For you, if a house doesn't have a good work space, that's a deal-breaker.

As a freelancer, you may spend eight or ten waking hours each day in your home office, far more than you spend in any other room. A dank basement, a corner of a dining room, or a hastily converted attic won't do. Importantly, the Internal Revenue Service specifies that for a home office to be deductible, it must be used exclusively for business purposes. This separation between office and living space isn't just a financial issue but also a work-life balance one. Having a separate, well-defined office space helps you "leave work" when you step into another room to enjoy personal or family time.

Unlike regular employees, you are not paid for just showing up. Your income depends on the quality and quantity of your work. A brightly lit, spacious office with adequate room for your work equipment, business and tax records, and an ergonomic workstation are investments in your productivity.

Allow room for growth as your workload expands. This means that when you are house hunting, insist on viewing home office space first and if that is inadequate, don't waste your time even walking through the rest of the property.

Also consider that if clients or collaborators visit often, you'll need guest parking. Ideally, look for a separate entrance directly to your workspace so business visitors don't walk through private or family areas. For regulatory compliance and basic human decency, ensure that the business areas of your house are fully accessible and have barrier free access to an accessible restroom.

The Bottom Line

Your home is a business space but also a living space. While practical considerations matter, so does your happiness and your work-life balance. Don't get so wrapped up in looking at numbers and ergonomics that you forget about your emotional needs. It's worth paying a bit extra so when you look up from your computer, you can observe stunning scenery or wildlife. It might be worth investing in a house that needs rewiring and some TLC to be in walking distance of a great coffee shop.

Unlike employees, who are constrained by a daily commute to an office, with your geographical freedom, you have a good chance of finding the perfect home at the right price by investing the time in a leisurely national, or even international, search.

Essential References:

Carol Poster is the author of three books of commercial nonfiction, four poetry books, and numerous articles for both popular and scholarly audiences. After teaching for many years at Florida State University and York University (Canada), she has returned to full-time freelancing.

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