Both commercial and residential properties have their advantages and risks. The best choice depends on your investment goals, budget, and risk tolerance. Let's compare them:
β Higher Rental Yield (6-12% vs. 2-5% for residential) β Long-Term Leases (Tenants often sign 5-10 year contracts) β Lower Tenant Turnover (Businesses prefer stability) β Less Maintenance Hassle (Tenants often manage interior maintenance)
β Higher Initial Investment (More expensive than residential) β Longer Vacancy Periods (If a tenant leaves, it may take time to find a new one) β Market Sensitivity (Economic downturns impact businesses more)
β Lower Entry Cost (More affordable than commercial property) β Consistent Demand (People always need homes) β Easier to Sell (More buyers in the market) β Potential for Price Appreciation (Good locations can appreciate significantly)
β Lower Rental Yield (2-5% vs. 6-12% in commercial) β Shorter Lease Terms (Tenants may leave in 11-12 months) β More Maintenance & Management (Frequent repairs, tenant turnover)
β If you want higher rental returns and can handle vacancy risks β Go for commercial property. β If you want lower risk, steady appreciation, and easier exit β Choose residential property. β If you have high capital, you can diversify into both!