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Is an Apartment Commercial or Residential?

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In some cases, it’s easy to tell the difference between commercial and residential real estate. A retail store obviously falls into the commercial category. A single-family home could only fit into the residential category. With apartments, though, it often gets a little more complicated.

When You Know an Apartment is Residential Real Estate

Some properties immediately look like residential real estate. Those properties include:

  • Homes that have been divided into multiple units.
  • Duplexes, triplexes, and fourplexes.
  • Condominiums.

No one would mistake these buildings as commercial properties because builders design them specifically for people to live in.

The Gray Area Between Commercial and Residential Apartments

Not all properties fit neatly into the residential real estate category, though. Consider a large-scale building with dozens or hundreds of apartments. You could make a good argument that the apartments exist inside a commercial property. After all, the building probably has several commercial elements, such as large HVAC systems, several employees, and elevators.

The materials and designs used to make the building may also place it in the commercial category. If the property has complicated design requirements that you don’t typically see in residential properties, it may get listed as a commercial property. Steel frames could also convince many people to put a building in the commercial category.

Why Does It Matter Whether an Apartment Is Commercial or Residential?

Is an apartment commercial or residential? The answer could matter a lot to real estate agents, landlords, and tenants.

Commercial properties often sell for higher prices than residential buildings. After all, buyers expect to earn money from commercial real estate.

The differences between commercial and residential properties can also affect the owner’s:

  • Type of insurance policy.
  • Control over what tenants do with the property.
  • Responsibilities for maintaining the property.
  • Property tax payments (this can vary significantly from state to state).

If an apartment is a residential property, then landlords usually need to provide more maintenance than they do for commercial properties. For some owners, that means they want their apartments listed as residential real estate.

Difficulties for Real Estate Agents

The gray area between commercial and residential properties can create challenges for real estate agents. Most agencies have individual databases devoted to either commercial or residential properties. When agents assume that apartments are residential, they could miss listings in the commercial database.

The categories could also make it harder for agents to contact property owners. If you can’t talk to the current owner, then you can’t make a sale or investment.

ProspectNow’s Database Includes Commercial and Residential Properties

Unfortunately, you cannot always know whether an apartment gets classified as a commercial or residential property. But you don’t have to let the situation prevent you from generating leads and increasing your sales.

ProspectNow maintains an updated residential database and commercial database. You will probably find most apartments in the residential database, but it’s always a good idea to check the commercial database when you don’t find the information you need. ProspectNow makes it easy for you to search both property databases. You can even narrow your searches by size, property type, and other filters.

ProspectNow gives you numerous tools that will help you locate, sell, and rent more apartments. The company has been perfecting its approach to supporting real estate brokers since 2008.

Sign up for a free trial with ProspectNow to experience how the platform works. If you like what you see, you can upgrade your account and join the thousands of other clients who rely on ProspectNow to do their jobs more efficiently.

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