Both residential and commercial properties have their advantages and disadvantages.
The following are a few examples of comparisons between residential properties and commercial properties.
Residential advantages
Residential properties tend to be easier to purchase
Residential properties tend to be easier to sell
Residential properties tend to be easier to lease
Residential disadvantages
There’s usually more competition when buying residential properties
A lower cost of entry to buy means more people in the market, resulting in higher prices for residential properties
The rental return for residential properties isn’t usually as good as commercial properties of a similar value
Commercial advantages
There’s usually less competition when buying commercial properties
The cost of entry for people to buy into commercial properties makes it harder for more people to get into resulting in less competition on price
The rental income for commercial properties can be of a substantially higher yield (return). With longer periods of lease in place coupled with the possibility of tenants covering the outgoing expenses can make for a more lucrative investment.
Commercial disadvantages
Commercial properties tend to be harder to sell as not as many people are looking to buy or rent them as they would a residential property
It tends to be harder to purchase commercial properties due to different deposit sizing and financing requirements
It tends to be harder to find a tenant as not as many people are looking to rent a commercial property as opposed to a residential property
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This information is of a general nature only and does not take into account your objectives, financial situation or needs. We are not financial, legal or tax advisers. You should seek appropriate professional advice specific to you before acting on this information.
