Choosing Between Residential and Commercial Investments

The key differences between residential and commercial real estate investing in Canada. Here are three main takeaways:

Residential real estate is more accessible for beginners, requiring lower down payments (as low as 5% for house hacking, typically 20% for investment properties) and offering simpler management, though with lower returns (5-8%).
Commercial properties require higher initial investments (20-30% down, sometimes up to 50%) but can offer superior returns through longer lease terms and net lease structures where tenants cover various expenses.
While residential properties provide more stable income during economic downturns since people always need housing, commercial properties are more vulnerable to economic fluctuations, as evidenced by their performance during COVID-19.

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