Commercial or Residential – Which Property Investment to Go for

As a matter of fact, the real estate market is widespread as it comprises a high percentage of not only buyers but also sellers. Now, people take interest in real estates with varied intentions, and investment falls among the key intentions out of many. Although real estate investment is executed in several ways, most of the investing options include either commercial or residential real estate. In addition, there are differences between residential and commercial real estate, and each comes with its own set of benefits. So, if you are in a bit of dilemma in terms of whether you should think of doing business through commercial or residential real estate, both should have a clear picture in your mind, which is extremely necessary.

Let’s start with a commercial real estate

Commercial real estate relates to apartments or lands with the intention to generate profit. To be precise, these real estates are mostly referred to as income or investment property. This usually includes properties or rental residences comprising five or more than five units. The majority of commercial properties are assigned for office, retail or industrial purposes. Investment in commercial real estates is truly lucrative and tends to draw more people requiring a good amount of money, education as well as a sound experience in the world of business.

Now, let’s know what residential real estates are for

Residential properties are usually related to those having single families as well as one-to-four families. If you come across cooperative units and condominiums, you can well relate them to residential real estate for the purpose of investment. There are many who prefer investing in residential real estates by purchasing rental properties or simply homes and then become homeowners. Some even become house flippers, that is, buying a house at a low price and selling the same at a price higher than it.

Now that you have got a fair idea on both commercial real estate and residential real estate, let’s delve deep into their investment strategies. So, what needs to be known about commercial property investment?

Commercial property dealers usually show interest towards purchasing properties that would generate high revenues. Moreover, the long-term leases of tenants make good money for the commercial real estate managers. However, commercial estate investment typically includes higher start-up costs in comparison to what is required for investing in residential real estates. Apart from this, commercial property dealers must always get in touch with cash-rich investors or lenders in case of commercial real estate investments. Although banks can often create complications in sanctioning commercial property loans, a smarter strategy would be to buy a property, manage it and sell it smartly. This would surely result in a good deal of profit.

As far as residential property investment goes, low start-up cost is its biggest advantage and this is what attracts a good number of investors. Some prefer investing in residential real estate properties to ensure that the profit margin is sustained between the purchase price and sale price. Despite, what most people do is buy residential real estate properties and become landowners. This, in fact, is comparatively hassle-free and one can also find good tenants faster. At the same, those who will be investing in real estate properties will have to take up a line of responsibilities and handle multiple issues with care.

However, one aspect can always be highlighted in favor of residential property management, which is the assistance of property management companies. There are many landlords who just cannot manage to meet all the duties and responsibilities to keep up the image of a good property. Here comes the role of those efficient property managers who take up these essential responsibilities and free landlords of their headaches. So, investing in residential property is also a lucrative deal.

So, the dilemma, whether to invest in commercial property or a residential one, will be removed if you keep your intentions clear. It’s you who have to decide whether to become a landlord or a long-term investor or flip the property. Once you have taken the decision, it will be easier for you to chalk out your strategies. You can always go with the idea of buying homes being house flippers, making necessary changes on weekends and reselling them. On the other hand, if you are having good cash in hand, commercial real estate investment can be good for you.

So, analyze your circumstances, make a wise plan and choose the right investment option. Good luck!!  

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