Differences Between Commercial and Residential Property Investment

When you invest in residential property you are basically dealing with people. When the rent late, you have to deal with someone – tenant. If you feel the property is not being looked after properly, you will have to deal with people who may have a different opinion of you.

With commercial property, you are basically dealing with the contract. If the rent is not paid on time, the contract (rental agreement) sets out a series of drugs that owners can take. If the property does not hold to certain standards, then the contract can stipulate that you can send a commercial net and send the bill to the tenant.

Generally, governments around the world have countless rules governing the renting of property for residential tenants, which overrides anything that might you put in your rental agreement. You can easily get properties for rent in Singapore.

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With commercial property, what is in the lease contract is generally what happens. Many commercial leases have a clause in it that specifies that if the lease if late by more than a week, then the penalty interest will be applied to the outstanding lease amount.

If the tenant has not paid rent certain period of time after that, then you have the right not only to change the locks and take your place back, but also to seize all the tenant’s fittings, furniture, and equipment in place, and to sell them to recover rent due. Your right as a commercial owner is much more powerful than them as the owner of housing.

With commercial property, tenants usually derive their income in your place. Therefore, they have a vested interest in keeping your property in good condition. With housing tenants, there is the same drive to keep your property, let alone fix it.

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