Residential Properties vs Commercial Properties
What do you know about residential property and commercial property. Ermm..I’m know what you thinking. You might said that residential property is a house for people to live in while commercial property is for businesses. Yes, that is correct. But how much do you really know about these both type of property? Let’s discuss together;
Residential property is a private house that letting people to live in. This private house can be named as apartment, condominium, terrace, semi-detached and bungalow. It’s usually located in a good and safe environment area which is peaceful and surrounded by neighborhoods. Some residential property such as apartment or condominium are usually have guards to safeguard the entrance/ lobby. (visitors need to register their ID with guards before enter).
Apart from that, the lower and medium ranges of residential properties such as flat and apartment are relatively resistant to the economy changes. While the high end residential properties such as bungalows and high-end condominiums are usually cost RM 1 million and above. On the other hand, the total loan amount that you can borrow from bank is higher should you buy a property is under residential.
Many people choose to investing in residential property is because they can make profits from it by becoming landlords or house flippers. Landlords get profits by renting out their houses while house flippers are simply buy a house at low price and sell it at higher price.
Commercial property is a property that for business use and intended to generate profits. Generally, commercial properties are shop offices, industrial building and retail lots. Besides, this type of property is quite sensitive to economic changes. If there is high points of the economic cycle, the property owner will get the excellent return on commercial rental while the rental rate will goes down if the economy is low.
Besides, the loan amount that you can borrow from bank is lower for commercial property compared to residential property. Its usually not more than 80% of the purchase price or market value. While the cost of financing is also higher than residential property.
In commercial property, investors are likely to buy one/ few/many to generate revenue and get profits by leases out to long-term or short-term tenants. Normally, commercial property is much more higher costs than residential property as commercial property is pricier. And if the investors bought and manged well or sold out wisely, they can get the excellent revenue or sale profits.
Other than that, the utilities charges of these both properties are different too which is residential property is lower while commercial property is higher.