Residential properties have a shorter lease period making tenants moving out constantly and new tenants coming in who will also want the same amenities.
Hence, maintenance should be of utmost importance. The location and proximity of a residential project to schools, hospitals, shopping malls, and main roads determine how much rent can be charged.
Commercial spaces, on the other hand, do not need too many amenities as it is not usually a lifestyle hub. It can be a simple open space where professionals can work. Regular maintenance is also not essential for commercial projects, and since the lease is usually pretty long, so, there is hardly ever an opportunity to worry.
Rent is, therefore, higher for the commercial real estate by default. However, it can be argued that the rent for commercial projects cannot be revised as frequently as in residential projects.
Once all the proceeds from the rent are considered in the long run, and every expense is taken into account, residential properties can generate even higher returns than the commercial ones.