Home office or real office?

When do I move my business from my laptop in my bedroom to rented office space? Is there any problem in doing business out of my living room, bedroom, or dorm room when I'm starting up?

It may depend on your business. I used to own a web development and hosting company, my business partner and I each worked from home. We usually met our development clients at their offices, but one came to my house on a few occasions.The colocation facility that housed our servers also had conference rooms available for reservation, so we had that option a few times when meeting new clients.

The only time I can see you needing office space is when you have employees or equipment that require it. I know many companies whose whole staff works from home. The only time they went for office space was when they needed the room for testing servers or to make available higher speed Internet connections than they had at home.

I'd say it depends on where you live and work. In some countries of Europe (Italy, Germany f.i.) not having an office might sound "strange" or amateurish.

In the US, who cares? You can have meetings in coffee shops, and nobody would complain.

As an alternative, you might consider renting a desk in a coworking space. It's usually quite cheap, you can rent it just for a few days per week, and you can also find other entrepreneurs to exchange ideas.

It also depends on how you live. When the financial crisis hit my business I went from something that needed an office (15 employees) to something that could run in a different setup. As I needed to move anyway I got a nice appartment that was cut out and organized so that it could house some office space (3 rooms are used / coused for offices now - wel, one is a shared storage / computer room things, then my office + secretarial work and one room) and moved the rest of our employees to work from their home (which saved them about 1.5 hours each day traveling, so they did not object). I still have an office totally reserved for work, though (well, two rooms). Having a dedicated office space is important in my opinion - at least my work is not one I coul run from a laptop packing up all paperwork every time I want to eat.

That said, I dont really meet customers too often.

I agree, it relates on your business. Once you start to have an employee, working at home is no longer an option unless you are outsourcing work.