Investing in real estate properties is the safest way to earn profit and it a lucrative business to earn passively. In the fastest-growing cities like Dhaka and Chattogram, there is always a high demand for both residential and commercial properties.

Like other initiatives, there is some fundamentals between residential and commercial real estate. So, understanding these fundamentals of real estate properties is crucial before investing.

Residential Real Estate

Residential real estate has been developed for living purposes for families and the community. In the entire layout, apartments, streets, drainage, security, hospital, and schools are well-planned. Infrstructures and other amenities are well organized and kept aesthetically. Single unit, flat or floor in an apartment are sold to an individual.

Investing in residential is quite easy and requires less capital.

Pros

  • It is very convenient for a new investor.
  • An investor can earn passively from rental income.
  • Being a lower investment, easy to finance.

Cons

  • Smaller rental income compared to commercial space.
  • Difficult to deal with tenants.

Commercial Real Estate

Commercial real estate refers to the properties used for commercial purposes, like corporate offices, megamalls, banks, convention centres, hotels, restaurants,  warehouses, and apartments to rent. Commercial real estate is a joint-venture initiative because it is more expensive.

Commercial properties go to a long-term lease and as a stakeholder, an investor earns profit from the lease income. This initiative is not as easy as residential real estate.

Pros

  • Investors can earn high profits from higher rental yields.
  • No hassle to manage frequent tenants.
  • High rate of worth increase.
  • Safe and secure business policy.

Cons

  • Requires higher investment.
  • High maintenance costs and complex management.

Verdict

Commercial or residential real estate both have unique potential and flaws. By understanding all characteristics of both properties, an investor has to decide wisely where will invest. It seems investing in commercial property is more profitable, but limited capital and complex management would be a factor in investing here. On the other hand, residential property requires comparatively less capital, but its return process is slow and troublesome.

Whatever, an investor should carefully invest their available resources in real estate by considering back and forth.