Hi all. I’m a solo attorney and I’ve been looking for new office space. Instead of signing a new lease, I’ve been thinking about buying an office condo, building it out with a few small “executive office” suites, taking one for myself, and leasing the others out to other professionals (lawyers, CPAs, insurance brokers, etc). The goal would be to generate a bit of cash flow while getting “free” office space for myself.
What are you opinions on office condos? Is this a terrible plan? Thanks for the input.
If you build large enough, you could theoretically live rent-free, but for cash-flow, you’re probably wanting to control/own at least twenty 20,000 sqft
You should talk with someone who’s either done, or tried to do, what you’re wanting. This is the highest quality feedback you’ll find.
This is a decision you make based on local market conditions, demand, and overhead, not what someone did once in Bear Blossom, Louisiana.
Look up two or three owners of any newer office condo complexes (in a neighboring town, so that you don’t represent a threat, or competition for business), and ask for their opinions on your idea.
Talk to some commercial building contractors and share your idea. Get an operating data sheet from any number of office condo complexes that are for sale, and see what kinds of margins they represent.
Frankly, I would rather buy an existing complex, than build a new one. Buying ‘used’ is usually cheaper, and generally more profitable than buying new. In real estate, it’s the second, or third owner, that makes the real money. Just saying.
Thanks for the feedback! Good advice. My idea (and budget) is much smaller scale, though – this would likely be just an individual office condo (2,000 feet or so with 4-5 small offices inside one suite) rather than an entire complex. I’m not sure if that changes your opinion.
Just make sure it is legal to lease / sub-lease individual offices to multiple businesses as licensing could be a problem if the office condo complex has a set of bylaws prohibiting this type of use.
Yes, you could probable very easily make enough rooms and charge enough rent to make your plan work.