The benefits of working from a home office

South Africa may be behind some other countries when it comes to certain innovations but if trends from abroad are anything to go by we may find ourselves working remotely or from home a lot more, finds Angelique Ruzicka.

According to a report by the New Jersey Institute of Technology, 45% of all United States employees do some work or all of their work remotely, away from a central office. There are many Americans that are also quitting their day jobs to start their own businesses.

Back home in South Africa, there’s a growing need to address the traffic flow in cities like Cape Town. Our sister website, Justmoney, reported last month that the problem has escalated to such an extent that the City is encouraging companies to allow people to work flexible working hours or to work from home to ease the flow.

There are many factors contributing to more people and businesses needing to create a home office (hoffice) space in their homes. While this may seem unconventional, there are certain financial benefits, particularly for small medium enterprises (SME’s) to make this move. But there may be certain alterations that you or the business may need to make to enable you to work from home.

Here, Attie Anderson, head of FNB commercial property finance outlines to Moneybags some key considerations that a business has to take into account when deciding to buy or rent office space in a residential area.

What must one consider in terms of where to buy?

The biggest consideration is access to the property.  Are the access and exit points adequate for the expected visitors to the premises? Is the site in close proximity to major routes? How will peak hour traffic affect access to the premises?

What are the stumbling blocks with owning commercial property in a residential space?

Residential areas are prone to traffic stacking during peak times. If you find yourself in the vicinity of a school or a residential area, you may receive complaints about the rate of activity.  In residential areas, sufficient parking space may also be limited.

What are the legislative considerations?

One needs to ensure that the zoning of the property caters for the specific business to be operated thereon. The zoning of the property attaches to the property itself, and not to the owner thereof. In some cases you may require special permission from the local authority (consent use). Consent use is normally granted to the owner of the property, with certain strict conditions to be adhered to. This consent use may not be transferred to subsequent owners (consent use therefore attaches to the owner, not the property).

How are rates and taxes calculated?

Rates are calculated in accordance with the rates policy of the Council in which jurisdiction the property is situated.  Properties with business zoning are calculated at a higher tariff than residential properties. The valuation of the property is normally multiplied by the tariff and divided by 12 to obtain the monthly rates applicable to that property.  The valuation of the property will normally differ from area to area.

Is it good to rent or own this type of property?

It is always better to own property in a good area as it will appreciate in value and as you grow it might be an asset that you will either rent out or sell at a reasonable profit.

What types of businesses are best suited for residential areas?

A look at the sector suggests that professionals such as doctors, dentists, accountants and real estate agents seem to move more to residential areas.  Other industries that seem to benefit are beauty salons, printing franchises and smaller service providers such as plumbers and electricians.

These days all you need to work from home is an efficient space, the right zoning if needed, time management skills and if you don’t own a business, an employer that is willing to let you work from home. If you think this would be hard to come by, think again, because just this month Amazon were looking to create 5,000 new, part-time and work from home jobs over the next year for Americans working from home. These positions also came with benefits, including health insurance, sick leave, holidays and tuition.

Global hotel chain The Hilton also got in the act this month advertising for full time “remote reservation sales associates” in 29 states in America. Pay for these positions, which are full time at 40 hours a week, start at $9 (R120.23) an hour, but with incentives could pay up to $14 (R187.02) an hour.

With multinational companies like Amazon and The Hilton seeing the benefits of hiring work from home employees, there’s no reason to think that more companies based in South Africa won’t follow suit soon.