When it comes to construction, there are two main types of projects that fuel the industry: commercial construction projects and residential construction projects. It’s important to know the differences in each since they are very different in many aspects.
Commercial construction mainly deals with the construction of commercial buildings from small offices to giant skyscrapers. On the other hand, residential construction primarily focuses on the construction of homes of all sizes.
If you’re planning on having a home built or need a new building for your business, knowing the differences in the construction processes can help you plan, budget, and manage your expectations better—which gives you a more accurate idea of what the project will cost and how long it will take to complete.
All commercial construction projects focus on constructing commercial properties, with a goal of generating profits from rental income or capital gains. There are different types of commercial properties, some of the most common being office buildings, skyscrapers, retail stores, malls, restaurants, medical facilities, hotels, prisons, movie theaters, and bus stations, to name a few.
Commercial construction projects can create assets that generate a lot of money and provide valuable services and shelters to communities, so they’re always a great option for investors looking to increase revenue.
Commercial Construction Benefits
Employment – Commercial real estate is one of the largest employers across the globe. Commercial construction projects employ all kinds of skilled personnel, allowing them to earn great wages for themselves and their families, while helping fuel the growth and development of the country.
Economic Efficiency – Commercial construction projects often have large budgets to ensure the project can be completed successfully without running out of resources due to an exhausted finance pool. These big budgets also allow for sophisticated construction equipment that makes it safer and more efficient to complete the project at the highest standards possible.
High Stakes – The stakes are always high when it comes to commercial construction. Getting the job done the right way is essential, and so only reputable firms get to be part of the projects. These successful projects also make future procurements more viable and likely for investors to be part of them.
Residential construction primarily focuses on the development of properties for residential reasons. Residential properties can range from single-family units and multi-family residential units (such as townhomes) to apartments and condos. For many states, apartments and similar may fall into the commercial construction category if they’re over a certain number of stories (usually 3) – though this rule usually doesn’t apply to one and two-family homes.
Residential Commercial Benefits
Less Regulations – Since residential projects are usually much smaller in scope than commercial projects, there are less permits and regulations needed. This makes residential construction easy to start without extra paperwork and bureaucracy.
Workforce – Construction of residential properties tend to have fewer workers compared to a commercial project. This allows for workers to build tighter, more efficient teams while cutting costs.
Customization – Residential construction projects are often more flexible and customizable. Depending on the type of properties getting built, the processes can be modified to maximize the efficiency needed to get the work done.
Cost-Saving – Depending on the scale of the project, residential construction can be much more affordable since there is no need to use industry-quality materials. The cost of construction is reduced by getting suitable quality materials that are made specifically for residential properties.
Commercial and residential construction have different paces throughout the entire process. Commercial construction projects are more stringent regarding timelines since they always have a set deadline that they have to meet. The deadlines are set since the projects have investors who would like to see their investments make returns as soon as possible.
It also takes much more time due to the large scale from the material to the number of construction personnel involved in the project.
On the other hand, residential construction is more flexible on the timelines. Since the stakes are not always as high, the time to build an entire project can be more flexible and still provide great returns. The construction crew is also smaller, and there are less materials needed than for commercial properties, making it easy to construct the project without the rush.
Internal & External Influences
Both internal and external factors may influence the timelines of both commercial and residential construction projects. These factors can vary from land issues, design changes, harsh environmental conditions, and contractors’ considerations, any of which may lead to delays in the projects. These factors should always be considered during the planning phase to avoid delays.
Codes & Permits
There are many codes that commercial and residential real estate projects must adhere to. Regulations are always higher for commercial construction and lower for residential. Apart from the government regulations, safety standards also have to be considered for any project, so project developers have to factor this during the planning stages. Some of the aspects that have to be addressed within the construction regulations include:
• Electrical systems
• Size and zoning
• Construction techniques
Location and Zoning
Urban planning has made it evident that not all properties work everywhere, so the location matters a lot when planning any commercial or residential construction project. Commercial properties have their own suitable and appropriate locations, as do residential properties.
Access is a major priority when developing any construction project. Commercial properties work well with easily-accessed roads that make it easier for construction materials and equipment to be utilized.
The zoning regulations are vital to the type of property you are constructing—a business generally won’t get clearance to build most types of commercial property in residential zones without rezoning or special exemptions. These zones, along with other factors such as general location, affect the value of the land.
While both types of construction have a similar end goal—to create buildings—the processes to reach this goal vary widely depending on the construction type. There are many factors to consider when planning and executing either type of construction, so it’s important to choose a reputable commercial construction company for business, and a reliable residential construction company for homes.