Commercial Real Estate vs Residential Real Estate Salary | Recent Data

For many young professionals, commercial real estate vs. residential real estate salary can be one of the most important financial decisions. While it’s tempting to pursue the highest salary available, making that choice without considering your long-term goals can lead to some serious regret later in life. To make the best decision possible, you need to know the pros and cons of each field before choosing which one you want to pursue in life. In this article, we’ll look at the similarities and differences between commercial real estate vs residential real estate salary and explain why each option has unique advantages.  

Read More: How To Become a Commercial Real Estate Developer

Commercial Real Estate Salary vs. Residential Real Estate Salary

Commercial Real Estate vs Residential Real Estate

A real estate agent’s annual pay greatly depends on the specific sales they make in a given year, whether they specialize in selling commercial or residential properties. Commercial agents, on average, can earn a significantly larger wage because their commissions are generally higher, although the area of commercial real estate has a slower sale turnover.

Learn More: Is There A Site Like Zillow For Commercial Real Estate

This is because commercial properties are often more expensive, to begin with. Because commissions are calculated on a percentage basis, they reflect the higher pricing.

On the other hand, a residential real estate agent’s typical pay is lower than that of a commercial real estate agent because they earn lower commissions and frequently work as employees for other brokerages.

Regardless, the residential real estate sales cycle is faster, and there are fewer industry entry barriers. This indicates that if the agent is knowledgeable, they may be able to earn more money than the average.

Commercial Realtor Salary

The average salary for a commercial real estate agent is $60,257 per year in California. 171 salaries reported, updated on June 16, 2022.

The average salary in your job search is likely much lower than that. Real estate agents typically work full-time, although many work is part-time to maintain regular schedules. Some agents work from a home office, while others work from an office in the brokerage.

Real estate agents typically work schedules that allow them to be available for most or all of the week, leaving little room for flexibility or schedule changes. Many agents work on commission, which means the more clients they can attract and the larger the value of the deals they close, the more money they make.

Residential Realtor Salary

Real Estate agents in California can earn $80,530 annually. In addition to a higher earning potential, Real Estate agents in California enjoy a higher quality of life. The state is ranked #1 when it comes to quality of life.

On top of a higher earning potential, Real Estate agents in CA enjoy a higher quality of life. The state is ranked #1 when it comes to quality of life. Real Estate agents in California can expect to make $73,450 on average per year, which is above the national average. If you are looking to enter the Real Estate industry, it might be a good idea to consider Real Estate in California.

Commercial real estate Residential real estate 
POSITION LEVELSALARY RANGEPOSITION LEVELSALARY RANGE
Senior executive$252 to $510Senior executive$209 to $470
Acquisitions$92 to $368Acquisitions$78 to $331
Asset management$99 to $395Asset management$82 to $318
Property management  $103 to $289Property management  $39 to $389
leasing$99 to $342leasing$42 to $137
Development$80 to $421Development$76 to $384

What do I have to make as a commercial real estate agent?

Commercial Real Estate vs Residential Real Estate

If you want to land a commercial real estate agent job, it is important to know what you can expect in terms of salary. Many factors go into determining what your payment will be in your chosen career field. Experience and certifications can increase your earning potential considerably.

Generally speaking, though, commercial real estate agents make more than residential agents. According to Payscale, commercial real estate agents usually start with a salary of around $40K-$50K annually, which could grow to over $100K within several years. 

What does a top-earning residential agent make?

Commercial Real Estate vs Residential Real Estate

So, how much can you make if you’re considering going into residential real estate? According to NAR’s most recent Home Buyers and Sellers Profile, agents in cities with high-cost housing markets like San Francisco and New York City can expect to pull in more than $100,000 per year.

And even lower-priced cities—like Houston and Nashville—see a substantial salary increase compared to other industries. To get a little more insight into what specific jobs at these firms look like, check out Glassdoor for some inside information from current and former employees.  

What’s the difference between commission and salary in real estate?

What's the difference between commission and salary in real estate

Sellers or buyers generally pay a commission to real estate agents who work with commercial properties. If you’re working with retail spaces or industrial buildings, you’ll probably need to be licensed and pay a fee to join a local REALTOR® association.

You can expect your hourly rate for these commercial deals to be higher than for residential real estate. As for residential, there are two basic models: those who receive commission and those who earn an hourly wage.

They both have pros and cons, so it’s up to you (and your financial situation) which one you choose. This comparison is intended to give you an idea of how much income each could generate for someone like yourself over a standard work week.

Is my Job Secure?

You’re probably asking yourself how much I make. This is understandable, but here’s why it isn’t important. First, everyone else in your field makes more than you do. Second, chances are you aren’t doing your job for very long.

Neither of these things should be a surprise to you, and either one could be (or has been) true from day one of your career; therefore, focusing on salary alone is pointless—you may as well flip a coin to decide what job to take.

However, other reasons matter when deciding where and what job to take more than salary. One reason is longevity: How certain am I that my position is secured? 

Which Industry Offers More Growth Opportunities?

Which Industry Offers More Growth Opportunities

Both commercial and residential real estate careers have plenty of room for growth. However, most people choose one industry over another due to their interest in and preference for residential or commercial properties. If you’re looking for a significant career change, you can expect similar starting salaries and average salary growth rates between commercial and residential real estate jobs.

That being said, these two fields offer different opportunities for advancement. Generally, you can expect more potential for career growth in commercial real estate compared to residential real estate.

Is one market better than another?

In a word, yes. Although many professionals in real estate tend to move between residential and commercial practices, some agents find that one type of real estate is better for their career over time. For example, if you’re interested in real estate investing, it can be easier to connect with a commercial real estate firm.

However, if you’re more interested in helping people find a home to live in, residential work could be more suited to your interests. In any case, it never hurts to try out both and see what you prefer! 

What are my biggest challenges?

Well, I’m not talking about income here. If you’re looking for a comparison between commercial real estate salary and residential real estate income, you’ve come to the wrong place. But if you’re interested in learning how to turn your passion for real estate into a career that could make money, some challenges will pop up in both fields.

When I talk about real estate salary, I’m referring to professional licensing and education requirements, which are more rigorous (and expensive) in the commercial than residential. So my biggest challenge is getting educated quickly and efficiently on all of these different topics. So that I can begin my career ASAP while keeping my student loans at bay as much as possible!

Conclusion

While there are many other factors to consider when looking at a real estate career, it’s clear that commercial real estate and residential real estate have their differences. When deciding which avenue of buying and selling homes, you’ll need to consider your interests, skill set, strengths, and weaknesses.

Moreover, what could be an ideal fit for your future career? If you’re unsure whether residential or commercial is best for you, we can help! Stop by our office today; we love helping people make educated decisions regarding their careers.

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