Which is a better investment, Commercial property or Residential property?

Real estate investments are of different types, they have their own benefits and complications. There has been confusion among new investors about the better investment between a commercial property and a residential property. Both of these properties have their own benefits and the profit depends on the amount of investment, time, and plan of the investor.

Pros and Cons of a Commercial Property :

Pros :

• Commercial property has chances of providing much larger returns and a steady cash flow. The profit also depends on the location of the property. The rent obtained from a commercial property is usually higher than that of a residential property.
• The property is always in the public eye due to which the tenant has to maintain the condition of the property. This also benefits the owner of the property. 
• The owner will have to worry less about the many issues such as repairs or maintenance.

• The price evaluation is much easier for commercial property and has guaranteed higher returns because of the lesser custom touches.

Cons :

• The investment required is much larger. The initial investment and the cost of repairs are much higher in the case of a commercial property.
• More exposure to the public means higher chances of risk to the property such as vandalism and mistreatment of the things on the property. 
• There is a need for professional help because of the complicated nature of the investment and the professionals will charge 5-10% of the revenue for their services.

Pros and Cons of a Residential Property :

Pros :

• The home loan application is an easy process that will increase your ability in investing more and get higher returns.
• The cash flow is steady and taxes are not charged for the revenue generated until you don’t cross a certain amount. This is beneficial for smaller investors.
• Residential property is easier to manage and the repairs are not that expensive. 
• You can again use that property for a loan and purchase a new property to expand your business. 
• The initial capital required is much lower than for a commercial property which makes it easier to purchase a residential property.

Cons :

• The tenants are more unpredictable in the case of a residential property which can lead to other problems
• This will also cost you a lot of personal time because of the small repairs and issues that are needed to be resolved quickly.
• You can face the unavailability of tenants for a pretty long time which will not generate any income for you.

Commercial property has usually higher returns but it requires more capital and experience to manage. You will also have to timely pay taxes. The location of the property is an important aspect of a commercial property as well as a residential property. If you are looking forward to investing in a residential property then you should consider getting a home loan home company like agrim to provide swift and secure loans with a simple home loan application process. Both these properties have their own pros and cons, The best option solely depends on the time, money, and planning you can give for your investment.