These properties normally generate income based upon leasing space to other businesses. Residential properties are normally properties that house individuals and families. They are also less then 5 units. Both types of properties have their advantages.

Commercial properties typically offer more of a long term cash flow due to the rental or lease of the commercial space. Commercial properties can also increase more in value based upon their potential cash flow but they normally take longer to develop then a residential property due to the additional space.

Residential properties can offer a long term cash flow but is typically lower then a commercial property. Housing rental markets are lower then commercial rental markets thereby causing less cash flow to the investor. Although the cash flow is lower, the residential market is still a lucrative market for the potential investor.

When choosing residential or commercial properties, both can be retail or under market. The under market property offers more potential for capital gains and the retail property offers more potential for monthly cash flow. The investor has to decide in the beginning which investment strategy appeals to them the most or they can have a portfolio of properties which include both retail and under market real estate.