Real estate can be a worthwhile investment. It can be a lucrative source of income for you. However, you have to decide whether you want to invest in residential or commercial real estate. Before you decide, you need to weigh the pros and cons of each option.

Pros of Residential Real Estate

Any complex that has between one and four units is considered residential real estate. This includes single-family homes, duplexes, triplexes, condos, and quadplexes. It is cheaper for you to invest in residential real estate. You will also have a larger prospect pool. People will always need a place to live, so it will be easier for you to find tenants.

Even if there is an economic downturn, you may still be able to find tenants. Residential real estate tends to do better in times of economic uncertainty.

Cons of Residential Real Estate

You won't make as much money in residential real estate. Residential properties are also more likely to be vacant. People tend to be picky when it comes to choosing a place for them to call home. Additionally, residential leases tend to be shorter. If multiple tenants move out, then it can take you months to fill those vacancies.

Pros of Commercial Real Estate

Office buildings, warehouses, industrial buildings, and mixed-use buildings are examples of commercial properties. You can generate a large amount of income by investing in commercial real estate. You will also be able to maintain positive relationships with people in the neighborhood and get more information about them so that you can ensure a positive relationship with them.

Additionally, you may not have to work as many hours per week if you have a commercial property. Most business owners go home in the evening. You will probably only have to work when they work.

Cons of Commercial Real Estate

It will be harder for you to manage commercial buildings than residential buildings. You will also need other professionals to help you. For example, you will have to hire maintenance staff to take care of repairs and maintenance. Furthermore, you will have to invest more money upfront. That is why it is harder for people to invest in commercial property.

Investing in any type of real estate can be both financially and personally rewarding for you. However, there are pros and cons to investing in commercial real estate or residential real estate. It is important for you to carefully consider the advantages and disadvantages of each option before you make your investment.