Carinastad.info – Basically there are several differences between residential and commercial property. All this must be understood before investing.
In this article, we will present the difference between Residential and Commercial Property along with a brief explanation. Read to the end to understand!
Differences Residential and Commercial Property
The following are 5 differences between residential and commercial property that have been summarized by carinastad.info as follows:
1. Individual and Corporate Tenants
If you do residential property, then you have to deal with tenants. If rent is not paid on time, or your property is not well-maintained, then you should get in touch with the tenant.
If you deal with commercial property, then you must have a rental contract. If the rent is not paid on time or your property is not maintained according to the agreement, then you can claim damages from the tenant. It was caused by the provisions in the rental agreement between the two parties.
2. Commercial Property Maintenance
The property generates profits from your tenants. They want their property to always look good because it is used for their business.
They will more often perform maintenance on the property they rent. Because it provides a guarantee for their efforts. Usually they tend to extend the lease before the term expires.
3. Residential Lease Period
Properties are usually rented for one year. Or if lucky for the owner, then they will extend for another year. While commercial property is rented for several years at a time.
If you own the property in good condition, then the tenants will lease your commercial property long term and maintain it themselves. It is good for their business.
4. Capital Required To Purchase
There is a general opinion that you have to have more funds if you want to buy a commercial property than a residential one.
While this may be true, there are still certain commercial properties that can be purchased at affordable prices. If you end up buying commercial property, remember all the advantages of commercial property over residential ones.
5. Investment Management
If you have more than ten residential properties, it will take a lot of time for you to manage them. Meanwhile, commercial property does not require a lot of time.
Because your commercial property has been taken care of by the tenant. Commercial property tenants tend to rent longer than residential property tenants. This is due to the longer rental period.