The real estate market continues to be a lucrative industry to not only pursue a career in, but it can also be a great investment opportunity for the future. From office buildings to single-family homes, there are a wide variety of ways to invest in real estate. But, before deciding to invest, it is important to understand what the different areas of real estate are, and how they differ from one another.

What is Residential Real Estate?
To begin, we can examine residential real estate, and what would be considered residential real estate. In general, residential real estate refers to real estate that is meant for personal and family needs. Residential real estate is the term used to describe single-family homes, with its primary purpose being used as a home. Investors who are looking for bigger, company real estate investments should focus on commercial real estate.

What Is Commercial Real Estate?
On the other end of real estate is commercial real estate. Commercial real estate focuses on real estate that is business-focused or has an anticipated return on investment. In other words, commercial real estate has a business-driven purpose and focuses on making money from the property. For example, commercial building owners will lease out business properties to companies in the area for a monthly rent fee. Unlike residential real estate, commercial real estate can be used to house a variety of companies and industries, including retail, restaurants, industrial, offices, and more.

How Else Do They Differ?
Since commercial and residential real estate differ based on what their ultimate goal is, how they are used for investing will also differ. For example, if a person wants to invest in residential real estate, there are a few ways to do so. They can purchase a home, townhouse, or condo, and rent it out to tenants. While you would be responsible for keeping the property up to standard, it does not require as much of a commitment.

If you were interested in investing in commercial real estate, there are a couple of options that you could take. For example, you could house different businesses into commercial property and earn money through their monthly rent payments. While similar to renting out a residential real estate property, the return on investment would differ in this instance, depending on the property, and how many companies are paying rent.

While these are just some examples of how commercial real estate and residential real estate differ, it is helpful to understand their biggest differences when determining if real estate investing is the right approach for you.

About The Author
Jack Nourafshan is a distinguished real estate development professional and entrepreneur in Los Angeles, California. He is the President of Reliable Properties, a real estate acquisition, development and management company in the Los Angeles area. Jack has over 30 years of professional experience that has made him known as a leader in the industry. Jack Nourafshan started a blog on entrepreneurship to share his insight and experiences for aspiring entrepreneurs.

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