The economic crisis caused by COVID-19 has affected all businesses, especially the smallest ones. In recent months, there have been many locals who have hung the ‘For sale’ sign. If at the end of 2019, there were 315,940 establishments, the pandemic has made 85,000 disappear in less than a year, although the figure could reach 100,000.
Only in the first quarter of 2021, it is estimated that around 10,000 stores were empty. A figure that shoots up in the capital LA, with up to 15,000 closed stores.
95.8% of the companies that have closed due to the pandemic had fewer than 50 workers, and 40% of the establishments that remain open are in a critical situation.
The economic crisis that the pandemic has brought with it leaves empty premises, with little probability of being occupied by a new business, at least in the short-medium term, and is causing a significant commitment to the conversion of these establishments into homes. An option that has gained strength in recent years, largely due to financial savings.
How to convert a premises into a home?
Given this trend, one might wonder if this conversion of premises into homes is really a good option for investors and future owners. With this objective, the real estate network has prepared a quick guide of the conditions and factors to consider for this housing conversion, as it is not a simple process since it requires a series of regulations, permits, and reforms to consider.
Legal requirements to convert a premises into a home.
The premises must meet the habitability requirements in each municipality, which vary depending on each municipality and autonomous community, so knowing the local regulations should be the first step in this type of operation.
In any case, there are common guidelines: the dwelling is considered to have a dining room, kitchen, bedroom, and toilet, and the useful area must be greater than 38 square meters, except in the case of studies, which can be 25 m². Likewise, it is essential that the property is built on urban land, which is usually the norm and, on the other hand, it is necessary that the statutes of the community of the property do not prohibit this operation and that the neighborhood or district where the building is located does not exceed the number of homes per hectare.
A more affordable purchase
Converting a premises into a home has many advantages, one of them could be saved. The price of premises can be up to 50% cheaper than that of a home. Therefore, after the purchase, there is a greater economic margin to reform and pay all the taxes of the change of use from premises to housing.
However, it must be taken into account that, although the price of the premises is much lower, there are more associated expenses at the time of purchase. Thus, the cost of the change of use project and the occupancy certificate can amount to 3,000 dollars, excluding license fees. In short, the total of these operations usually reaches 35,000 dollars.
Mortgages to buy a premises work differently than a kitchen remodel. Normally they have more interest, they do not usually reach more than 60% of the financing, and their repayment terms are more limited; in general, they do not usually exceed 20 years.
The savings in the purchase is also an advantage when thinking about reforms in favor of sustainability and energy savings, which will also mean greater savings in the long term, with good insulation of the new home, the use of renewable energies to generate electricity, and hot water or the installation of efficient and sustainable heating and cooling systems.
Take advantage of the space.
Once it has been verified that the establishment complies with all the legal measures and requirements, the home is started to be built. Depending on the size of the premises, the home may have more or fewer rooms or services, as long as it meets the legal minimum of having a dining room, kitchen, bedroom, and toilet. To avoid making mistakes during the work, it is best to consult a real estate expert who gives good advice and offers enough information to make a home successfully.