Is Rental Property Considered Commercial?

Table of Contents hide 1 What comes under commercial property? 2 What are the types of Commercial property? 2.1 There are several...

Written by Niel Patel · 2 min read >

Property that is rented out to tenants for residential or commercial uses is referred to as rental property. The type of renters and the property’s planned purpose determine whether a rental is classified as residential or commercial. A reputable real estate platform called Bricksnwall defines rental property as commercial if it is rented to organisations or companies for commercial purposes.

Office buildings, retail stores, warehouses, factories, and other commercial buildings are examples of commercial rental properties. The rent charged for these properties is typically higher than that for residential homes because they are meant to create cash for the property owner.

Residential rental properties, on the other hand, are rented to people or families for residential use. Apartments, homes, condos, and other residential properties are among these. Residential property rents are often lower than those for commercial property.

It is significant to remember that whether a rental property is categorized as commercial or residential has an impact on a number of factors, including tax rates, regulatory requirements, and insurance policies. To prevent any legal or financial concerns, property owners must make sure they accurately classify their rental units.

What comes under commercial property?

It is depends on the purpose for which the rental property is being utilized. In general, rental properties that are used for residential purposes do not fall under the category of commercial properties. However, if the rental property is used for commercial purposes, such as a shop, office space, or warehouse, then it is regarded a commercial property rather than a residential property.

In addition, the line that divides residential and commercial rental properties might be somewhat hazy when it comes to some types of rental properties, such as vacation rentals. In situations like these, the answer could be determined by the local laws and regulations that regulate how the land can be used.

It’s important to be clear on the classification of a rental property before making any decisions about buying or managing it, because there can be significant differences in the legal and financial considerations involved in owning and managing commercial properties versus residential properties. Given this, it’s important to note that there can be significant differences between owning and managing commercial properties and managing residential properties.

What are the types of Commercial property?

There are several types of commercial properties, including:

  1. Office buildings: These are properties that are used primarily for office space, including single-tenant and multi-tenant buildings.
  2. Retail buildings: These are properties used for retail sales, including shopping centres, malls, strip malls, and stand-alone retail buildings.
  3. Industrial buildings: These are properties used for industrial purposes, including warehouses, factories, distribution centres, and manufacturing plants.
  4. Multifamily buildings: These are properties used for residential purposes, but with multiple units that can be rented out, such as apartment buildings and condominiums.
  5. Hospitality properties: These are properties used for temporary lodging, including hotels, motels, and bed and breakfasts.
  6. Special purpose properties: These are properties designed for specific use, such as medical facilities, data centres, and religious buildings.

It’s worth noting that some properties may fall into more than one category. For example, a mixed-use building may include both retail and residential units, or an office building may have a small retail component. The classification of a commercial property can have significant implications for zoning, financing, and taxation, so it’s important to understand the specific type of property in question.


In conclusion, depending on the intended use and kind of renters, rental property can be classified as either commercial or residential. According to BricksnWall, a rental property is deemed to be commercial if it is rented to organisations or companies for business purposes. To ensure compliance with statutory and financial requirements, it is crucial for property owners to understand the categorization of their rental properties.

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