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Commercial vs. residential property investment: Which is more profitable?
Discover what type of investment property makes a difference for your ROI.
Commercial vs. residential property investment: Which should you choose?
Are you a first-time investor looking to invest in a property that can offer you long-term financial benefits? Are you on the fence about what to choose between commercial and residential properties?
Both options have their own advantages and disadvantages, so you should consider important factors such as your long-term financial goals, risk tolerance, and investment strategy before making a decision.
That said, as commercial property experts, we can assure you that the return on investment from commercial property is much higher than residential properties. So, we recommend investing in commercial properties.
5 reasons why you should choose commercial properties over residential properties
They have higher income potential
Commercial properties can generate higher annual rental yields of 5-10% of the property’s total sale value, compared to 1-3% that residential properties generate. That’s not all. Commercial properties have longer leases, and their maintenance expenses are borne by tenants, providing a more sustainable stream of passive income for property owners.
They have less frequent tenant turnover
As we mentioned, commercial properties have much longer lease terms than residential properties. This means property owners do not have to find a replacement tenant as frequently as they would if they invested in residential property. This saves owners the headache of advertising to find new tenants and saves money on refurbishing the property.
They help build generational wealth
Do you need funds to cover emergency medical expenses? Do your children need money to support their university education? Due to high rental yields and steady passive income earnings generated by commercial properties, you will always have enough income on the side to secure the financial future of your loved ones by accumulating generational wealth.
They come with triple net leases
One of the advantages of commercial properties is that they often come with triple net leases, which means tenants are responsible for paying property taxes, insurance, and maintenance costs. This shifts the financial burden from the property owners to the tenants and protects them against unexpected expenses or liabilities related to the property.
They help diversify the portfolio
As a commercial property investor, you can invest in various types of commercial properties, such as warehouses, office buildings, or retail shops, which can help you diversify your property portfolio. This increases your cash flow and passive income potential and reduces your risk exposure by spreading it across different sectors and geographical areas.
Why work with Unikorn
Although commercial properties offer many financial benefits, including higher rental yields, longer lease contracts, and net positive cashflow, many investors are still hesitant to get into commercial property investing.
That’s why, we at Unikorn, have assembled a team of commercial property experts who will help you become a successful commercial property investor by providing property investment education and supporting you through every step of the investment journey, taking away the confusion, and helping you multiply your wealth.1000+
Unikorn deals and counting
5
Strict point selection criteria
30+
Experts working with you
5/5
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Success stories
Regina Soeryanto
Architect
Jason Leap
Merchandise Planner
Soula Lerantges
Montessori Teacher
Kerryn Abagi
Business Owner
Mish Daniel
Business Owner
Want to learn more about commercial vs. residential property investment? Our experts can help you!
FAQs
The most common types of commercial property include office buildings, retail spaces, industrial warehouses, shopping centres, hotels, and medical facilities.
Commercial property investing may require more in-depth research on property management, lease negotiations, and compliance with building codes and zoning laws. You may want to consult a commercial property expert to help you understand these regulations better.
Helen Tarrant, a property expert with more than 10 years of experience will show you the ropes to making educated decisions in commercial property investing.
Book a strategy session with us, today! Click here