Most individual investors start with residential property. Commercial property behaves differently, and fractional ownership makes it accessible to people who could never buy a warehouse on their own.
Leases and income
Commercial leases are often longer, with tenants commonly responsible for repairs and insurance under full repairing and insuring (FRI) terms. Residential tenancies are shorter and the landlord carries more of the running costs.
Yields
Commercial property has historically offered higher income yields than residential, partly because of higher vacancy risk and longer empty periods when a tenant leaves.
Sectors
- Industrial and logistics: warehouses and trade units, supported by online retail and supply-chain changes.
- Offices: demand has shifted towards smaller, high-quality, energy-efficient space.
- Retail: varies widely between convenience-led parades and struggling town-centre units.
Regulation
Residential lettings carry extensive tenant protection and safety rules. Commercial lettings are governed mainly by the lease, though energy efficiency standards apply to both.
See our pages on industrial and logistics and residential investment.
This guide is general information, not financial, tax or legal advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.