The differences between residential and commercial construction

VA Loan Texas
November 05 2022 | By Elevation Construction

What is commercial construction?

Think of commercial construction as any type of property that's constructed for commercial purposes. Commercial buildings support the daily ventures of those who work in them.

The following are common types of commercial properties:


  • Land investments
  • Office spaces
  • Retail buildings
  • Storage units
  • Industrial buildings
  • Hospitals

Although large-scale apartment buildings do house people, they´re considered commercial property because the building space is leased out as a rental business.

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What is residential construction?

Residential construction is almost every type of building used to house people, both in individual and multi-family dwellings.

The following are common types of residential properties:

  • Single-family homes
  • Duplexes, triplexes, fourplexes
  • Townhouses
  • Co-ops
  • Condominiums

The difference between commercial and residential construction is the purpose for which each type of building is constructed.

Building materials

Concrete is frequently used with steel-framed commercial buildings, although the residential industry is gravitating toward concrete because of its durability. While there is some crossover between materials used for residential and commercial buildings, the only hard and fast rule is that the material has to support the design. This is where the quality and grade of materials steels come in a wide range of grades, and different designs will require certain ratings.Resultado de imagen de The differences between residential and commercial construction

Codes and permits

Every kind of construction has to meet codes. Commercial buildings have stricter codes because they're generally a lot larger, accommodate many more people, and include many more building components. Commercial buildings need to accommodate complicated electrical and plumbing systems, IT systems, accessibility, concerns, and parking garages. Residential buildings are smaller and generally simpler to build, so there are fewer considerations (and codes are generally less strict).

Cost and funding sources

Materials for commercial construction are generally higher grade and therefore more expensive, and commercial construction teams are paid to keep tighter deadlines and are also often more expensive because they use specialized equipment and techniques.

Commercial projects may be founded by the government, a corporation with bank financing, or a developer. Residential projects may be financed by a developer, but they are often paid for by homeowners with bank loans or cash. In some instances, as in the construction of low-cost housing, the government or a nonprofit agency may fund a project.

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Commercial projects often have tighter working plans going in, so they'll often move faster. Because multiple investors may be involved in financing a commercial building, they'll expect a streamlined workflow and on-time delivery. Residential homes often take longer to complete because the property owner may make decisions as they go along or change their minds multiple times through the process.

There is some crossover between residential and commercial buildings, but in general, these two sides of the industry stay in their own lanes.