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Commercial Property Vs Residential – Which is Better to Invest?

Commercial Property Vs Residential – Which is Better to Invest?

Residential Vs Commercial Properties

Investing in the real estate sector of Pakistan is a profitable option for every investor. Real Estate investment is secure and returns with good returns.  Whenever an investor thinks to invest in this sector, there are always two options to choose between residential vs commercial properties.  Choosing the best option between these two is quite difficult. So, today we are going to share the major details of these properties that will help you to make a wiser decision.

Residential Commercial
Types Homes, apartments, and flats Offices, shops, and commercial plots
 Purpose Accommodation Business and investment
 Prices of Property Cheaper Need a good capital to invest
 Laws and regulations Lenient More strict
 Consumers More Less
 Maintenance Low cost with regular maintenance The high cost of maintenance and many taxes
 Return Better return in short to medium period Returns good over a long time of period

Let’s discuss the difference between these properties in details:

Types of Property

One of the key differences between commercial and residential real estate is the type of properties. Residential real estate offers investment mainly in houses, apartments, and flats. However, the commercial real estate is completely dedicated to shops, offices, as well as commercial plots.

Purpose of Investment

Choosing between residential property and the commercial property also depends on your investment purpose. If you are planning to buy a property for your accommodation or to meet your business needs? if you are looking to earn regular income? Well, answering these questions before choosing the right property is very important.

Residential properties are used to meet self-accommodation needs as well as it meets the need of rental property for potential tenants. In contrast, commercial properties attract businessmen and business owners who are planning to start their business.

Prices of Property

Several factors can increase the price of a property. It includes the location of a property, its neighborhood, and the available amenities and so on. In the case of residential properties, the prices are different as these properties are available in various sizes and the cost can differ from city to city and also project to project.

On the other hand, the prices of commercial property are also different as per its location. For example, a shop with a road front will cost you more in comparison to the shop located far from the road. Moreover, it is also important to mention here that commercial properties are more expensive than residential properties. Furthermore, there are many restrictions when it comes to the sizes of commercial plots, shops, and their developments and so on.

Laws and Regulations

An owner of residential property usually has a lot more freedom in terms of designing its place, its structure, construction bylaws, and rental agreements. In simple, it is quite easy to build a residential home with little with fewer zoning and planning permissions needed.

But, in the case of commercial property, the laws and regulations become stricter.


The demand for residential properties never ends. That’s why a large pool of buyers always available to buy a house and willing to rent a property. But the demand for commercial property is not such high as the residential houses, flats, and apartments. Only firms, organizations retailers, and also investors show their interest to buy commercial properties.

However, there’s an upside to buying a commercial property. If you want to earn a good rental income, then you can consider buying a well-located commercial property.

Return on Investment

This is one feature where commercial real estate takes the lead. You will generally earn a lot more in terms of renting and reselling your commercial property in comparison to residential properties. While commercial properties require a good capital to invest but it also returns with greater rewards.

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