Have you chosen real estate as a career and now you are confused whether you want to choose commercial real estate or residential real estate? There are pros and cons to working with both types of properties, but you have to choose the career that leads you towards success the best. Although it is easier to break into residential real estate, if you want to make more money during your lifetime, you need to choose commercial real estate.
Commercial real estate brings you the big deals because you are dealing with corporations instead of someone who wants to rent, sell, or buy a single house. Although you need to work harder in commercial real estate, hard work is necessary to be successful in every job, so why not get paid fairly for your hard work? Today we would like to tell you about the top 5 reasons why you should go commercial instead of residential real estate.
1. More Commission
If you are dealing in commercial real estate, you will definitely make more money because the percentage of commission is more significant as compared to residential deals. The properties are more expensive as compared to a residential building, and the clients are willing to pay more because they need the property for putting their business on the ground. A commercial deal may take 9 to 10 months to be closed and fully funded, but it would definitely pay off commensurate with your hard work.
According to the National Association of Realtors, a commercial real estate agent makes $85,000 per year on average and a residential real estate agent makes $35,000 per year on average. You can see such a massive gap between the earnings and decide which one would suit you the most. If you can become a commercial realtor, you may even receive up to 100% of your commission.
2. Career Growth
A commercial real estate agent needs to have a proper degree to work in the market, which helps him or her to make full use of their knowledge in the field. On the other hand, residential real estate agents don’t need a degree. Regardless of college education, both types of agents are required by law to have a real estate license.
If you are working in the commercial market, you’ve got better chances to grow because you are in contact with different businesses outside of the market. The connections you make in the business community can lead you towards getting even bigger clients shortly.
A residential real estate agent is only in contact with small families most of the time, which cannot help them to take their career to the next level. Even if a small business needs to find a property, it would have to contact a commercial real estate agent, so you would be in contact with almost all the companies in your area looking for property to expand their operations.
3. Work with Large Companies
The environment of commercial real estate is really different from the residential market. You get to talk to the big fishes in the industry. This is not a side hustle. The commercial side introduces you to the real corporate sector, and you get to see more serious buyers and sellers. It is more about making the business happen and allows you to earn tens of thousands of dollars with just one deal.
Residential real estate gives you the chance to make great relationships with various families, and get more time for yourself. A commercial real estate agent is always on the move and trying to earn more instead of finding time to relax. Working in the commercial area is a full-time job, and you definitely get paid for the months of hard work you put in to close a deal. If you are looking to make a name for yourself in the market and work with big corporations in your area, you need to choose the commercial side.
4. Exclusive Clientele
As a commercial sales agent, you do not have to deal with a variety of clients because not everybody can buy a retail center worth $3 million. You will get to see more people from the corporate sector dealing with buying and selling in the commercial sector. This is where you can build a vast network with the people in high places in your area.
You will get invited to parties where you will meet people who are ready to invest in millions. You don’t have to bargain for a few thousand dollars because these people know how business is done. You can get straight to the point and close a deal if you give these clients a real proposition which suits them as they have a lot of money at their disposal.
5. Fewer Competitors
A bigger chunk of real estate agents chooses residential real estate because it is easier to get into and you can even do it as a side hustle. You can see evidence of this whenever you attend a networking event for real estate agents, or when you see signs of homes or apartments available for sale or rent.
On the other hand, there are only going to be a handful of commercial real estate agents that you’ll see attending networking events. So there is a lot of competition in the residential market, and if you can market yourself in a better way, you may find it easier to get the top spot in the commercial real estate market in a few years.
There are not many agents contacting commercial property owners with property worth millions of dollars so you can get a great deal done in a few meetings. All you need is someone who needs a commercial property and someone who needs it right away. Several commercial properties worth less than $4 million would be a long shot for a residential investor, but it is not a significant investment for a commercial investor. So you can easily hit the jackpot if you are persistent and willing to work hard in the commercial sector.