All Topics > Real Estate Resources > Commercial and Residential Real Estate >

Commercial and Residential Real Estate California

A breakdown of what commercial and residential real estate is and how the two types of property differ from one another.

Local Companies

Keith Woolgar - San Diego's Century-21
(619) 306-3369
1133 Avocado Ave.
San Diego, CA

ENDERLE CENTER
(714) 731-2911
14081 S. Yorba St., #107
TUSTIN, CA

Intracorp
(949) 955-2370
4041 McArthur Blvd., Ste. 401
Glendale, CA

LM Realty & Investment Company
(818) 957-0760
2550 Honolulu Avenue, Ste. 108
Glendale, CA

RE/MAX of Glendale
(818) 547-6367
2256 Montrose Ave. #3
Glendale, CA

The Springs
(559) 439-1076
7511 N. First
Fresno, CA

Wathen-Castanos, Inc.
(559) 432-8181
7259 N First #101
Fresno, CA

Manco Abbott, Inc.
(559) 435-1756
6051 N. Fresno, #110
Fresno, CA

Fox Property Management
(559) 224-4008
1535 E. Shaw Ave., Ste 102
Fresno, CA

Rod Aluisi Real Estate
(559) 227-7000
7472 N. Fresno St., #210
Fresno, CA

Adapted From: Success as a Real Estate Agent For Dummies

Comparing commercial real estate to residential real estate is like comparing apples to oranges. Both are from the same genre, but that is where the similarities end. The following are general descriptions of the two types of real estate:

Commercial real estate is business-focused. It involves property that is sold, leased, or used to achieve a predetermined business objective. It's used as an investment to achieve an anticipated rate of return on the funds invested.

Residential real estate revolves around the wants and needs of a homeowner and his family. It involves property purchased for individual use, most often to provide housing for families.

The selling process for commercial real estate hinges on numbers and return-on-investment calculations. Residential real estate is nowhere near so cut-and-dried because it's more of an emotional purchase. Many buyers make decisions based on the fact that the house just feels right to them. The key factor is the return on investment.

What is residential real estate?

Residential real estate is focused on personal use. For the most part, residential agent's represent the buyers or sellers of single family, primary homes. Within the residential real estate arena, agents also engage in the following specialties:

Selling secondary homes to people seeking a "home-away-from-home" to get away from it all. The second home market is one of the fastest-growing segments of the residential real estate arena. More than 21 percent of the sales in 2004 were second home purchases for use by the purchaser or for investment purposes.

Working exclusively for a builder of new homes, usually by serving as the on-site salesperson for a new home community. In this role, the agent sells only the builder's homes. If buyers need to sell an existing home outside of that community, usually another agent handles that sale.

Representing residential real estate investors who are looking to increase wealth through the ownership of homes, duplexes, triplexes, and fourplexes. Small-scale multiplexes are handled by residential rather than commercial agents for the following two reasons:

• Often the purchaser lives in one segment of the multiplex, creating a residence as well as an investment property.

• Usually a purchaser can buy up to a fourplex with a conventional mortgage.

Residential agents rarely represent buyers or sellers of multiplexes with more than four dwelling units. Purchasers of larger complexes must qualify for and secure commercial real estate loans — which involve a more restrictive set of conditions, including higher interest rates, shorter amortization schedules, and considerably higher initial equity positions or down payments.

What is commercial real estate?

Commercial real estate centers on business or investment use of real estate.

In commercial real estate, you can buy, sell, lease as a lessor (the person who owns the property for lease), lease as a lessee (the person who's trying to lease the property for their use), syndicate, joint venture, develop, option, and invest in a wide range of commercial real estate categories, including retail, office, industrial, apartments, investments, and raw-land leasing.

Commercial real estate agents are usually familiar with many of the commercial real estate areas, but they generally specialize in one of the following areas or disciplines:

Representing tenants or lessees by finding, selecting, and negotiating new space for client businesses.

Representing building owners or lessors by working to lease out building space for the highest possible price and with the most favorable terms. Frequently a commercial agent represents one owner or even one building exclusively in order to ensure the building is leased to capacity.

Representing investors who want to buy and sell commercial property by finding opportunities that offer the lowest risk to the client, the best return on investment, and the best capitalization rate, which is the net operating income of the property divided by the sales price or value of the property.

provided by:

For Dummies is a registered trademark of Wiley Publishing, Inc. in the United States and other countries. Used here by license.

Featured Local Company

Keith Woolgar - San Diego's Century-21

(619) 306-3369
1133 Avocado Ave.
San Diego, CA

Read more about Commercial and Residential Real Estate

- Is Real Estate Investing For You? California

Ask yourself these simple questions before you dive in.

- Real Estate Website Management California
- Commercial Real Estate California
- Buying Commercial Real Estate California
- Property Management California
- Real Estate Investing Basics California
- How to Rent or Lease Commercial Buildings California
- Commercial Real Estate Investments California
- Commercial Real Estate - Top 5 Companies California
- Get Started In Investment Properties California

Regional Articles

- Get Started In Investment Properties California

Real estate is an interesting and profitable investment opportunity. Whether you want to sell property, rent out apartments, or purchase commercial space, this article will help you get started.

- Real Estate Investing Basics California
- Commercial Real Estate Investments California
- Commercial Real Estate - Top 5 Companies California
- Property Management California
- Commercial Real Estate California
- Is Real Estate Investing For You? California
- How to Rent or Lease Commercial Buildings California
- Buying Commercial Real Estate California
- Real Estate Website Management California

Related Local Events

National Association of Realtors International Convention
Dates: 11/13/2009 - 11/16/2009
Location: TBD
San Diego, CA
View Details

REALTORS Expo - Real Estate Industry's Exhibition and Annual Conference
Dates: 11/13/2009 - 11/16/2009
Location: San Diego Convention Center
San Diego, CA
View Details

Plan Sponser Real Estate Conference
Dates: 10/27/2009 - 10/29/2009
Location: The Beverely Hilton
Beverly Hills, CA
View Details

RealShare APARTMENTS 2009
Dates: 10/8/2009 - 10/8/2009
Location: The Westin Bonaventure Hotel
Los Angeles, CA
View Details

RealShare ORANGE COUNTY 2009
Dates: 8/27/2009 - 8/27/2009
Location: Hyatt Regency Irvine
Irvine, CA
View Details

Advertising	Food & Beverage	Nightlife
Business Services	Franchise	Online Database
Career	Health	Pets
Cars	Holidays	Real Estate Resources
Computer Hardware	Home Appliances	Retail & Consumer Services
Construction	Home Electronics	Software
Education	Home Services	Technology
Entertainment	Industrial Goods & Services	Telecommunications
Environmental	Insurance	Trade Shows
Family	Internet	Travel
Fashion	Legal	Weddings
Financial Services	Miscellaneous	World History

Advertising	Family	Home Services	Real Estate Resources
Business Services	Fashion	Industrial Goods & Services	Retail & Consumer Services
Career	Financial Services	Insurance	Software
Cars	Food & Beverage	Internet	Technology
Computer Hardware	Franchise	Legal	Telecommunications
Construction	Health	Miscellaneous	Trade Shows
Education	Holidays	Nightlife	Travel
Entertainment	Home Appliances	Online Database	Weddings
Environmental	Home Electronics	Pets	World History