October 24, 2022

Residential Versus Commercial Real Estate

a real estate agent with House model is talking to clients about buying home insuranceIndividuals interested in investing in real estate in Brooklyn, N.Y., might wonder if residential real estate is better than commercial real estate. There are some differences between the two.

Investors should know this before deciding which one is right for them. That is why it would be wise to get a real estate lawyer in Brooklyn if you are thinking about investing in property.

Differences Between Residential and Commercial Real Estate

The two types of real estate have elements that set them apart.

Residential Real Estate

Residential real estate includes any property used for personal, family, or household purposes. It has both the physical structure of the property and the land on which it sits. Usually, residential real estate is zoned for living only.

The following are examples of residential real estate:

  • Single-family homes
  • Townhouses
  • Apartments
  • Condominiums


Easy entry: It has never been easier for investors to obtain residential real estate. With online real estate platforms, searching for and purchasing property is streamlined and made much simpler.

Strong demand: With continued strong demand for living space, investing in residential real estate is a great opportunity for investors.

Attainable financing: There are many financing options for investors to acquire residential real estate. Some options include conventional loans, government-backed, and private loans.


Tenant vacancies: As an investor in residential real estate, it may be hard to find new suitable tenants after former tenants move. It can cause longer vacancy periods and can be costly.

Challenging evictions: Landlords have difficulty evicting tenants because they have to follow government rules. The rules are designed to protect the tenant, but the tenant can often use them to stay in the property longer than the landlord would like.

Vigorous market: There is a lot of competition for investors who want to invest in residential real estate. It is because there are many investment opportunities in this area, and the high-profit potential is high.

Commercial Real Estate

Commercial properties are usually much larger than residential properties. They also are in more densely populated, high-traffic areas and are often used for commerce. This real estate is typically leased out to businesses and zoned for business use.

The following are examples of commercial real estate:

  • Office buildings
  • Warehouses
  • Retail stores and vacant land for future development.
  • Vacant lots or land for future development


Ample income: Commercial real estate investors make more money from their investments than residential investors. It is because commercial real estate has a higher potential return on investment.

Minimum hours: When investing, commercial real estate offers a more hands-off lifestyle than residential properties. Investors do not have to be on call 24 hours daily, as they would with a residential property.

Getting assistance: A net lease is a type of lease in which the tenant is responsible for paying a portion of the property taxes, insurance, and maintenance costs in addition to rent. It can be an attractive solution for investors to minimize their financial risks.


Financing troubles: In recent years, it has become harder for investors to get financing for commercial real estate than residential. Some reasons include lenders that have been burned in the past. It is a complex and volatile market.

Difficult recovery: Commercial real estate takes a harder hit than residential properties in the aftermath of an economic dive. Places such as retail establishments, hotels, and restaurants struggle to rebound when the economy remains in flux.

Tough entry and exit: Commercial property is generally much more expensive than residential property. Lenders view commercial real estate as a higher-risk investment. So they require a higher down payment to offset that risk.

If you are considering selling your commercial property, you may have to wait longer to find a buyer. Even then, you may have to accept a lower price than you would for a comparable residential property.

Legal Assistance from a Real Estate Lawyer in Brooklyn

A residential or commercial real estate lawyer in Brooklyn can help in a number of ways. They can review the contract to ensure that the investor is getting what they expect and that there are no hidden clauses that could be problematic down the road.

Overall, hiring a qualified real estate lawyer in Brooklyn when considering investing in property is beneficial.

The Strazzullo Law Firm provides residential and commercial real estate lawyers in Brooklyn that investors turn to when seeking legal expertise. We help investors purchase commercial or residential property. We advise on the legal aspects, help with negotiations, and review documents. We can provide important information and guidance related to the legalities of the property.

Getting legal help from the Strazzullo Law Firm can lower your risk of potential pitfalls. As a dedicated real estate attorney, you save time, money, and freedom from stress in the long run. Message or call us today for a free initial consultation.