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Commercial or Residential Property: Which is Better?

Posted 26th May 2023

When choosing a property, there are so many things to consider that it can all become overwhelming. Owning a property is a big step to make, so making that decision requires some thought and comparison to ensure you are making the best decision for you and your desired tenants as a landlord.

There are many characteristics and factors you may want to consider when choosing a property, including looking at the difference between commercial and residential property.

Each option has a selection of pros and cons to consider before making your final decision, which is why at we have outlined the positives and negatives of both residential and commercial properties to ensure you have all of the necessary information before you dive in.

Commercial Property Pros and Cons

Commercial properties refer to any property that has been designed to be used for business purposes. From offices to shop spaces, commercial properties can be used in a variety of ways, so can be an excellent choice for those planning to invest in property.

The Pros of Commercial Properties

If you are looking to invest in commercial property with the purpose to lease your property to a business, then one of the pros of choosing a commercial property over residential is the ability to issue longer leases, creating property security with a contractual lease that protects landlords.

As a commercial landlord you may also discover that, when compared to residential properties, you will receive fewer maintenance demands from your tenants, saving you both time and money in the long run.

The Cons of a Commercial Property

When choosing a commercial property you may find that initial costs will be higher than those of a residential property. Not only do you need to ensure you can cover the cost of the property, you will need to consider refurbishment costs and any costly repairs that may be required before you can lease the property. 

Whilst you can issue a longer lease for a commercial property, you also need to ensure you are keeping the property filled, which can be more challenging than with a residential property, or risk paying business costs on an empty building.

Residential Property Pros and Cons

Residential properties are buildings that can be used as a dwelling, meaning properties that people can call home. Flats, bungalows, detached or semi-detached, creating many options for residential properties can be the ideal investment for landlords or homeowners alike.

The Pros of Residential Properties

If you are thinking of purchasing a residential property you can expect to find it incredibly easy to rent out your property. One in five households in the UK rent their homes from a private landlord, meaning you will likely never be without a filled property that continues to provide you with an income.

Another pro of residential properties is that your house will gain value over time, so when you decide to sell your property it should be worth more than you originally paid for it.

The Cons of Residential Properties

Whilst housing values can skyrocket, especially for maintained properties, they can also reduce, so you need to be careful about selling a residential property to ensure you are profiting from your sale rather than making a financial loss.

Tenants are one of the main factors for residential properties, but you can never be sure of how your tenants could behave, it is a risk that comes with choosing residential properties. You may also struggle to find tenants, but both of these factors can be mitigated if you research the area of investment as well as the families you choose as your tenants.

Find Your Perfect Property with PC Certificates

Choosing between residential and commercial properties is the first step to investing in the property ladder, so take the worry out of choosing with help and advice from Professional Consultants Certificate.

Learn more about properties with our helpful blog, or get in touch with our friendly team today to discuss how we can help you with your next property investment.

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