Real estate is one of the world’s oldest and most respected industries, but it’s also one of the fastest-changing. Suppose you’re interested in working with real estate. In that case, you probably have questions about what options you have in specialization and whether it makes sense to go down both avenues at once or decide on one or the other early on in your career.
Here are some reasons why you should consider both commercial and residential real estate careers, as well as some tips to help you get started in this industry that could make your future business endeavors much more successful.
Can you do Both Commercial and Residential Real Estate?
Yes, you can. It’s a little more challenging, but I know many real estate agents who have handled small commercial and residential properties over the years. According to the law, you can have commercial and residential real estate licenses. Because most states require the same license for commercial and residential real estate agents, the use of each license is usually the same—meaning that commercial and residential agents rarely hold unique licenses unless required by state-specific law.
What’s the Difference Between Commercial & Residential Real Estate?
When many people think of real estate, they think of selling houses or renting out apartments. But in reality, there are two separate industries: commercial real estate (office buildings and retail spaces) and residential real estate (aka single-family homes).
So, when it comes to learning how to start a business in real estate, you’ll have to determine whether you want to get into a niche market within one specific industry or focus on both at once.
The good news is that most businesses (particularly early on) typically don’t need to specialize in one industry. If you’re just starting, it could be more useful for your business development needs to learn how to do both industries simultaneously.
Is Working with Both Like Being on Two Different Teams?
Working with commercial and residential real estate might seem like being on two different teams, but with a little extra effort, it’s not. The reality is that most people who work in commercial real estate don’t understand residential real estate or vice versa.
And since each is a unique industry with unique processes, there are differences. The first step understands these differences so you can easily navigate them. Some of these differences might be an advantage for you to use as an agent in your favour.
Your knowledge will set you apart from others working in the field. So focus on building that knowledge base through talking to colleagues, reading up on industry news, attending conferences or using other means to educate yourself about both industries before starting work in one or both fields.
Which Experience is better for Future Growth in My Career Path?
Depending on where you want to take your career in real estate, one experience may be more useful than another. Before deciding which path is best for you, ask yourself some questions. Here are a few of them: What will help me learn more about real estate investing, my desired investment style or both?
What do I want out of my career—and how will different experiences lead me there? How can I balance building relationships with investors with selling as many units as possible? Which types of clients will provide me with a better learning experience and bigger paychecks down the road? Here’s what you should know about commercial and residential real estate to answer these questions.
Which Would Be More Lucrative for My Career, Commercial or Residential Property Sales in the Long Run?
There are two types of real estate, and most people who get started in real estate are just focused on one of them. If you want to be successful, you’ll need to know about both commercial and residential work so that you can excel when it comes time to jump into a new career or promotion opportunity in either niche.
To learn more about getting started with each type of work early on, contact an agent or broker who works with both residential and commercial property so they can discuss how each type of job is handled from start to finish. They will also let you know which type of school they believe is better for your needs and provide all kinds of other useful information.
What Other Ways I Could Choose to Focus My Career if I Only Want to Work with One Type of Real Estate?
If you only want to focus on one type of real estate, that’s completely fine! As I mentioned, some agents focus exclusively on commercial real estate while others choose residentially. Specializations like luxury homes or helping first-time home buyers find their first apartment. No matter what your niche is, becoming a specialist means you can help people who need it—and will be extremely valuable for those clients in turn.
If you love working with commercial real estate clients but don’t have the time for them now, there’s no reason why you can’t specialize in that area if you decide to expand later.
How Can I Learn More About Getting Started in Each Type of Real Estate Work If I Decide This Is Something I Want to Pursue as a New Career Path Later On Down the Road?
If you’re just starting, learning about real estate can be overwhelming. There are several types of real estate work, each requiring its skillset, so it makes sense that you might wonder which area is right for you.
But don’t worry—you’ve come to the right place! We have lots of helpful information here at HowStuffWorks. Still, if something, in particular, has piqued your interest (like commercial or residential), we recommend clicking on those links above to learn more about each type of work involved.
Frequently Asked Questions
In Texas, can you handle both commercial and residential real estate?
Yes, a licensed real estate agent can sell any type of property, including commercial and residential properties. Even if you specialize in residential real estate, you can later branch out into commercial real estate.
Which is better for real estate: commercial or residential?
Commercial properties typically generate more gross revenue with less effort. Residential properties provide better returns in most areas of the country and do not necessitate a significant outlay of capital because there is no mortgage, and tenants do not incur interest costs.
Do you have to pay taxes on commercial property?
Rental income from commercial property is taxed. Revenue expenses, such as interest and letting agent fees, are deductible. The applicable tax rates are determined by whether the lessor is an individual, trust, or corporation.
Is a rented property considered commercial?
Commercial real estate generally refers to buildings that house businesses, but it can also refer to land used for profit and large residential rental properties.
Is it possible to deduct commercial mortgage interest?
The interest you pay on your commercial mortgage is deductible from your taxes. This means the interest you pay on your mortgage each year can be deducted from the tax your business owes.
How much tax is I required paying if I sell my commercial property?
Trustees are subject to Capital Gains Tax at the standard rate of 20%. If a corporation rather than an individual owns the commercial property, the corporation pays a different tax on selling its commercial assets. They pay Corporation Tax at a rate of 19%, which is set to decrease to 17% in April 2020.
Sheena Whitlock, a property expert, and blogger with over 15 years of experience in the field. The knowledge and skills Sheena has acquired during her career have given her invaluable insight into the property management business.
She has done her Property Development BSc (Hons) from the University of Portsmouth and completed her Master’s Degrees in Property Management from the University of Chicago.
As a professional, she has spent time working for various companies as a property management officer and currently works at Asset Info Hub where she shares her knowledge and experience on various property matters with people around the world, questioning their queries via blogging and virtual consulting services.