We live in the golden age of the side hustle. Friends, family, the random person at the grocery store has one. Maybe you bake cookies, have graphic design skills, or make candles. The dream is tempting: rolling out of bed, grabbing a coffee, and starting your workday from the comfort of your home.
But before you print those business cards, you need to hit pause. Running a business from a rental property isn't as easy as downloading an app. There are specific rules, regulations, and practical realities you can’t ignore if you want to keep your business running—and keep your apartment.
Successfully running a business from your apartment depends on two key factors: following the law and getting your landlord’s approval. By meeting legal requirements and gaining your landlord’s consent, you can turn your side hustle dreams into reality!
Let’s examine key considerations for starting a home business in your apartment.
1. Your Lease Agreement
Before you do anything else, you need to dig that lease agreement out of your kitchen drawer (or your email inbox). Your lease is the law of the land when it comes to what you can and cannot do in your apartment.
Most standard residential leases have a clause that specifies the property is for "residential use only." This language exists to prevent tenants from turning a quiet apartment building into a busy commercial hub.
Read the fine print carefully. Look for specific restrictions on commercial activity. If you are unsure, it is better to ask your landlord than to receive an eviction notice later.
2. Zoning Laws and Local Regulations
Even if your landlord gives you the thumbs up, the city might have a different opinion. Every city has zoning laws that dictate how properties can be used. These laws exist primarily to keep residential neighborhoods quiet and safe.
You need to check your local municipal codes regarding "home occupations." Some cities have strict rules about:
- The percentage of your floor plan that can be used for business
- Whether you can have employees working from your home
- Signage (usually forbidden in residential areas)
- Storage of inventory
- Permits, licenses, and registration
A quick search on your city's website or a call to the local zoning office can save you from hefty fines down the road.
3. Tax Benefits and Responsibilities
If you run a business from your apartment, you may be eligible for certain tax deductions—such as a portion of your rent, utilities, and internet—if you use part of your home exclusively for business.
It’s crucial to keep detailed records of all expenses and income related to your business. Tax rules can be complex, so consider consulting a tax professional to make sure you file correctly and take advantage of all possible deductions.
4. Asset Protection: Your Insurance Needs
Here is a common misconception: "I have renter's insurance, so my home business is covered." Unfortunately, that is rarely true. Standard renter's insurance policies usually exclude business property and liability related to business activities.
Imagine if your expensive laptop gets stolen, or worse, a customer visits your apartment for a meeting and trips on your area rug, breaking an ankle. Your renter’s policy likely won't pay a dime.
To protect yourself, you have a couple of options:
- Endorsement/rider: You might be able to add a simple endorsement to your existing renter's policy to cover business equipment.
- Business liability insurance: If you have customers visiting or you hold inventory, you almost certainly need a separate business policy.
5. Setting Up a Productive Workspace
When you live and work in the same 800 square feet, the lines can get blurry. To stay sane and productive, you need to create separation between living and working.
In a small apartment, you might not have a spare room for an office. That’s okay! You can still carve out a dedicated zone.
- Room dividers: Use a bookshelf or a folding screen to physically enclose your work area.
- Corner space: Choose a corner of your living room, or designate one specific end of the dining table as your work zone. Doing so can help your brain switch into work mode.
Pay attention to lighting and ergonomics, too. Working from a soft couch sounds nice, but your back will hate you after a week. Invest in a decent chair and ensure you have good task lighting.
6. Being a Good Neighbor: Limiting Noise and Foot Traffic
The quickest way to get shut down is to annoy your neighbors. In an apartment building, walls are thin—and patience can be thinner. You don't want your business to become a nuisance.
Visitors constantly going in and out of your apartment can arouse suspicion and create noise (hello, slamming doors). Consider how your business can impact those around you. If your work involves noisy equipment or microphones, you might want to invest in soundproofing material and adhere to any mandated "quiet hours.”
7. Communicating with Your Landlord
Honesty is the best policy. If your business meets all required legal guidelines but your lease is unclear—or if you are worried your business might fall into a gray area— have a conversation with your landlord or property manager.
Explain exactly what you’d like to do. If you plan to work from a laptop and will have no visiting customers, share that information with the landlord. Most landlords are reasonable people who just want to ensure their property is safe and the rent gets paid.
If the landlord agrees to let you run your business from the apartment, get that permission in writing. An email confirmation is good, but an addendum to your lease is even better.
Running a business from your apartment is a fantastic way to pursue your passion and make extra income. By keeping these seven tips in mind, you could be on your way to being a successful entrepreneur.
Cheers!
Frequently Asked Questions
Can I run a business from any apartment?
Not every apartment allows business activity. It all depends on your landlord’s policies and local zoning laws. Check with both entities to find out if running a business from home is allowed.
What types of businesses are typically allowed in apartments?
Businesses that don’t create noise, traffic, or hazards—like freelance writing, graphic design, or virtual consulting—are usually acceptable.
Businesses involving frequent customer visits, inventory shipments, or physical services (like hairdressing or pet grooming) often aren’t allowed in residential rentals. Always confirm with your landlord and local regulations.
Do I need business insurance to run a business out of my apartment?
Yes, it’s a good idea to have business insurance to protect your assets and cover liability. Check if your renter’s insurance policy can be extended to include business activities or if you need a separate policy.
What’s the difference between working from home and running a business from home?
Working from home (WFH) usually means you are an employee who works remotely for a company—your employer sets the rules and covers most legal obligations. On the other hand, running a business from your apartment means you are the owner.
Ownership comes with extra responsibilities, such as securing the right permissions, handling tax and legal matters, and making sure your activities comply with your lease and local regulations.
