The core trade-off
Residential property offers stability and end-user demand. Commercial property offers higher yields and longer leases. The right pick depends on your capital, risk appetite and time horizon.
Yield and risk
Residential rental yields sit in the 3–4% range but come with steady tenant demand. Commercial yields of 7–9% are more attractive, but tenant risk and vacancy periods are longer.
Effort and management
Commercial tenants sign 5–9 year leases and typically handle their own fit-outs — lower involvement for the owner. Residential requires more frequent tenant turnover and upkeep.
Liquidity
Residential resale is faster and more liquid. Commercial takes longer to exit but at a better absolute value.
How to decide
If you are a first-time investor with an under-₹1 crore ticket, start residential. Beyond ₹2 crores and with a longer horizon, blend both.
