Which Property Investment Reigns Supreme Find Out Now
Residential vs. Commercial Properties
Residential properties are often the first choice for new investors. They include single-family homes, condos, and multi-family units. These investments are generally considered less risky and offer steady rental income. According to the National Association of Realtors, the median price for existing homes was $359,000 as of September 20231. This sector benefits from high demand and the potential for property value appreciation.
On the other hand, commercial properties such as office buildings, retail spaces, and industrial properties can offer higher returns. They often come with longer lease agreements, providing more stable cash flow. However, they require more significant capital and carry higher risks due to market fluctuations. The average cap rate for commercial properties was around 6.5% in 2023, indicating a solid return on investment2.