Hey guys! Per the description, I am currently trying to figure out if residential or commercial real estate would be a better fit for me. I worked in buying at a high end department store for the past few years, so I am highly analytical and numbers driven. I think I would do well in this regard because I know it takes out the emotions. However, I don’t know a single realtor in the commercial real estate world. I have been interviewing mostly residential brokers, and one did tell me that there is more money in residential than commercial. I have some friends and family connections that are interesting in buying/selling residential property within the next few years, and I’d love to help them, but would I be able to do that successfully if I give the commercial world all my time and energy? Also, I am a young woman and was wondering if there are other young women in this business I could talk to? No offense to the men but it does seem to be pretty male dominated :) If anyone has any advice to offer please do let me know! I’d love to connect. Thanks!
You can make money in both residential and commercial real estate. The residential realtor was wrong to say that you can make more money in residential real estate. There are far too many variables to make that statement. It would be generally correct to say that residential real estate is somewhat less risky (safer) than commercial real estate. With residential real estate almost any habitable apartment can be rented. You may need to lower the rent to minimize vacancy loss and get a larger pool of potential renters but you will rent the apartment (with minimum vacancy loss). That is not always the case with commercial real estate. For instance, if you have 10,000 square feet of warehouse space but no loading dock or minimal parking you may be limited in your pool of potential tenants. It's not uncommon for commercial space to sit vacant for 12-24 months, sometimes longer and lowering the price in the above example may not yield faster results.
Commercial real estate is often more complex. For example, your tenants are business people with more complex needs, and often good negotiating skills and a attorney or CPA looking over major transactions (such as a new lease). Therefore, leases need to be written (or at least reviewed) by a lawyer until you become a pro. I think it's a great idea to talk to a commercial realtor. I highly recommend Kristin Geenty from The Geenty Group in Branford, CT. She literally grew up in the business, has won a number of industry awards and recognition and is a consummate pro. Oh, and she's female :-) Best of Luck!
Hi Katelyn, I would recommend starting with a 4-unit building in CT since it is still considered residential but can certainly be managed as a commercial investment property. I'm a multifamily agent in Fairfield County and connect with investors who own 20+ properties that cash flow very well for them, but are still highly interested in a smaller 4-unit asset in areas like Bridgeport, Danbury, and Stamford.
Call up commercial brokers in your area. They're always looking for juniors to work for next to nothing - Just being honest.
You can learn a lot, but prob not make a lot of money. When you do, you'd be up with residential brokers.
Residential you can get up to speed income-wise pretty quick, but it is a 24/7 deal and comm is more M-F/9-5.
@Mike Wiesner Hey Mike, thanks so much for your feedback! I’m thinking that I am going to start off in residential and maybe shadow some commercial brokers to get a better taste of it before I decide. I will definitely check out Kristin, she sounds fantastic. Thanks again!