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Commercial or Residential Real Estate: Which Is Right for You?

When searching for real estate jobs, it is important to know whether you want to pursue a commercial real estate career or residential real estate career. Each has potential benefits and drawbacks as well as different qualifications that will support your success and make you attractive to future employers. The guide below can help you choose which property type is right for your career.


Commercial real estate agent showing client around an empty office building



Focus: Commercial real estate careers require attention to statistics and profitability. Properties must be adjusted and discussed in alignment with data retrieved regarding the property’s history and revenue. Property appraisal is a vital element, and commercial real estate appraisers are often well compensated due to the extreme importance of this function.

Because property appreciation in this sector is based largely on prior profit and not comparisons to surrounding properties, commercial real estate agents must be well-informed regarding the relevant market and influences affecting past, present, and future value.

Major Differences: Commercial properties tend to experience lower tenant turnover and longer lease/ownership periods compared to residential sites. Combined with the limited population actively looking to acquire commercial space, these factors lead to less frequent demand for real estate professionals involved in listing and obtaining property and greater stability for those involved in property management and upkeep.

However, because commercial properties are often higher priced and generate greater commissions, successful real estate professionals in the commercial real estate business have the potential to earn far more than their residential counterparts.

Factors for SuccessWorking as a commercial real estate agent requires a strong understanding of the market as a whole, as well as the range of factors influencing property management and sales in a particular region. It may be helpful to move into this area after a number of years as a residential real estate agent. This will allow you to establish a breadth of experience in the real estate industry and apply that knowledge to commercial transactions. After some time in general commercial real estate, you may choose to specialize even further, developing a focus in such areas as office or retail spaces.

Average Commercial Real Estate Agent Salary: According to an analysis done by RealEstateExpress.com, agents who specialize in commercial real estate command an average salary of $91,208. It’s important to note that compensation is impacted by demand, which means location plays an outsized role in a commercial real estate agent’s earning potential.


Residential real estate agent showing couple around a new home



Focus: The residential real estate business is closely tied to clients’ day-to-day lives. It is important that residential real estate agents understand the surrounding area they are serving as it pertains to their specific role. Realtors, for example, should be well-versed in the local school districts, surrounding businesses/shops, area attractions and amenities, and available public transportation. Property managers should also be aware of the appropriate associations’ rules and laws regarding property care in their area.

Major Differences: Residential properties tend to experience higher tenant turnover rates than commercial options, leading to a greater market for real estate agents and other professionals involved in the listing and selling processes. These properties also require more frequent and involved hands-on maintenance while under lease or ownership.

Even within residential real estate, there is a big difference between multifamily residences and single-family homes. According to census data examined by RENTCafe, the demand for single-family rentals grew by 31% from 2007–2016, while demand for multifamily rentals increased by 14% over the same time period. Single-family homes also experience lower tenant turnover, with the average renter staying six years in a single-family home vs. three years in a multifamily residence.

Factors for Success: Working in residential real estate places you in close contact with others’ personal lives. It is important to understand and be respectful of the emotional investment your potential and/or current buyers and tenants have in their homes. A career in this area requires strong customer service skills and the flexibility to plan around clients’ schedules.

Because of the more personal nature of residential real estate, it is best to engage with clients in a way that suits their needs and interests. Whether you are a property manager giving your cell phone number to a millennial renter so that they may text you to discuss potential issues rather than make a phone call or a realtor placing a county newspaper ad to recruit local interest, matching your means of communication to the population you serve will work to ensure a smooth working relationship.

Average Residential Real Estate Agent Salary: Once again, the folks over at RealEstateExpress.com looked into compensation of agents who specialize in residential real estate and found an average salary of $68,640. Note that location and experience affect earning potential for residential real estate agents. An established agent in an affluent area can earn far more than the national average.


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  • Low turnover
  • Greater investment
  • More complex and time-consuming deals
  • Professionalism is a must
  • Prior real estate experience is valuable
  • Focus on data and revenue


  • More hands-on
  • Larger market
  • Greater opportunity and access to potential clients
  • Flexible schedule necessary
  • Access to various modes of communication may prove useful
  • Focus on day-to-day life, such as demographics, local shops, transportation, etc.


Are you interested in starting your real estate career? If you want to find work as a real estate agent, a property manager, or a real estate appraiser, iHireRealEstate can help!


By Erin Coursey, iHire | May 28, 2019
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