Every real estate developer starts to focus on what they want to work on to be their best. This is the best way to build a company and succeed in specific markets. For Jerome Karam and JMK5 Holdings, the focus is on redevelopment.
Only a few developers take on both commercial and residential redevelopment projects, but Jerome Karam is very picky about what he works with.
Understanding the differences between the two types of properties is a great starting point, but the initial selection process also makes a difference.
What’s The Difference Between Commercial and Residential Real Estate?
Both commercial and residential real estate are types of property that can be bought, sold, leased, or rented. While they share some similarities, each type also has its unique characteristics.
Commercial Real Estate
Commercial real estate is typically used for businesses rather than as a place to live. Properties intended for use in commercial activities must meet specific zoning requirements. For example, sites zoned for industrial use cannot be used for housing.
One advantage of commercial real estate is that it tends to generate more income than residential properties of the same size. For example, a small business owner may be able to lease out an unused part of their warehouse for extra money each month.
In addition, commercial properties tend to be more durable and require less maintenance than residential properties. That’s because while many commercial properties have people coming in and out throughout the day, they aren’t lived in 24 hours a day.
However, only some things are a plus with this type of property. Commercial real estate tends to cost significantly more than residential property, which makes it difficult for small businesses or startups to afford.
Additionally, buying or leasing a commercial space requires a significant upfront investment of time and money in legal fees, inspections, permits, etc. It is challenging for some entrepreneurs with limited resources to get their businesses.
Residential Real Estate
On the other hand, residential real estate is typically used as a place to live rather than work. This includes single-family homes, and apartment buildings rented out by individuals or families rather than businesses.
Residential properties are generally more accessible and cheaper than commercial ones but generate lower returns.
This type of property is generally less expensive than commercial property and requires less investment by homeowners or renters. Additionally, living in a residential space tends to be more comfortable and convenient than working in an office all day.
While more and more people are working from home, residential property is the only realistic way to go.
Both types of real estate have their advantages and disadvantages, each with unique features ideal for specific individuals and businesses.
Whether a person is interested in buying or leasing commercial or residential property, it’s essential to weigh the pros and cons before deciding.