What Is the Difference Between Residential and Commercial Real Estate?

Residential real estate includes single-family homes, condos, and multi-unit dwellings up to four units, while commercial real estate involves properties used for business — such as offices, retail, and apartment complexes with five or more units.

In my experience, residential real estate offers stability and accessibility for new investors, while commercial properties often deliver higher returns but come with greater risk and management complexity. Understanding your goals, timeline, and risk tolerance determines which asset class best fits your investment strategy.