Difference between commercial construction and residential construction

Difference between commercial construction and residential construction. The construction industry plays a vital role in the country’s economy. It has provided a backbone for our journey of modernization. Therefore, it is important to have some knowledge of what construction entails. Based on their use, we can divide lands into two categories: commercial and residential land.

However, there are many misconceptions about commercial and residential construction. People tend to get confused between the two. Yet commercial and residential construction are different on several grounds.

Commercial Construction

In simple words, it is an establishment for commercial use.

This means they are made to earn profit either through rental gains or capital gains.

Commercial properties have five main categories:

• Land- It is the investment in raw, rural, or underdeveloped land for future investments.
• Industrial- This can include cold storage and distribution centers, large R&D facilities, and warehouses.
• Retail/Restaurant- This includes large centers, small neighborhood shopping centers, single-tenant retail buildings.
• Office Building- It includes small professional office buildings from skyscrapers and everything in between.
• Multifamily- This includes high-rise complex apartments. Anything larger than a fourplex comes under the commercial property.
• Miscellaneous- This category has all properties of health, hospitality, medical, and many more.

Residential Construction

Residential buildings are establishments that are solely for living purposes.

According to the real estate industry, any property with less than five units in which none of them are for commercial use will fall into the residential category.

Some of the common types of residential properties are:

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

Main differences between commercial and residential construction

The construction categories two differ from each other based on their use. Yet, there are many more key differences between the two. Here, we mention some of the aspects on which both can be distinguished.

Building Material

Every establishment requires material and labor input to stand solid and firm. Thanks to advanced technology, many new architectural designs are being generated, and they require various materials to be built. Even in commercial and residential construction, there are differences on the subject of building material.

For smaller-sized homes or residential buildings, timber frames are common. Timber is cost-efficient and structurally suitable for smaller dimensions. Companies building residential properties usually choose timber as their primary building material.

Contrarily, larger construction, or commercial constructions, need a much stronger frame. Therefore, steel frames are commonly used. Steel is a much more convenient and resilient material. In addition, it also affords longevity to tall buildings such as skyscrapers.

Building materials other than these can also be used, but these are the most basic options.

Equipment needed

There are various types of construction equipment available in the market. One can distinguish these for commercial and residential use.

On the one hand, for commercial construction, heavy earth-moving equipment and cranes are used. These buildings are more complex and hence require new technologies for optimal results. To build commercial building designs, technical equipment is needed. For this equipment, well-experienced personnel are also required.

On the other hand, residential construction is not challenging. Simply construction machinery is sufficient for these types of buildings. Moreover, residential construction also can have the tendency to be influenced by the suggestions of friends and family. Of course, one needs heavy machinery for some especially extravagant houses.

Cost Difference

There is a notable cost difference between residential and commercial construction. This difference is the result of the quality and quantity of all labor, equipment materials, and compliance.

Starting with commercial construction, a large and skilled labor force is needed. In addition to this, the latest technologies and specialized equipment are also necessary. Labor is often done through a bidding process, in which the job goes to the lowest-price capable bidder. 

On the contrary, residential buildings also need an efficient labor force and equipment. However, there is a huge difference in the scale of the two. Due to this, the cost of residential construction is very low in comparison to commercial construction.

Funding

All establishments require funding.

With this in mind, the two types of construction also vary in this regard.

Commercial construction commonly obtains funds from:

• A government agency
• A corporation with bank financing
• A wealthy owner or developer

The entity which funds the project then hires a general contractor. This contractor looks after and manages the entire project. Further, the bidding process is also used to choose sub-contractors.

The funding for residential construction is mostly done by the homeowner through a loan from the bank. The following are some methods that are used for residential funding:

• Cash
• Insurance loan
• Bank loan
• Government agent/non-profit 

Note that generally there is no bidding procedure with residential funding. Yet there is extensive interaction between contractors, sub-contractors, and homeowners.

Project Deadline

You must be thinking that as commercial establishments are much larger in comparison to residential ones, then it must take a longer time for them to be completed. Let’s find out if this is true.

It is right that commercial construction is on a large scale, but comparatively, it takes less time than average house building. This is because they are well designed in advance. Besides this, there is a systematic workflow as well.

Do not miss that in commercial construction, the main aim is to earn profit. Hence, they work with faster construction and lower costs of labor. Their primary motive is to work as fast as they can.

In residential construction, there is little planning done in advance. Therefore, most decisions are made during the construction of the project. In addition to this, there is a significantly smaller labor force. They work on various projects simultaneously, which reduces the pace of residential construction.

Choose the Best Construction Company

We saw many key differences between commercial and residential construction. However, choosing the best company for any of your projects is a difficult decision. 

Residential projects require timber frames and normal construction equipment. This small-scale construction is manageable for homeowners themselves with the help of cash or loans.

In contrast, commercial projects are large and require a significant amount of input. There should be substantial and efficient labor with quality machinery and equipment. Yet both kinds of construction require a vision.

The construction company plays a vital role for both these small- and large-scale establishments. Therefore, you should choose a renowned company with an incredible track record for your dream project.

A suggestion for those of you who are looking for a construction company is to contact Erisa Projects, a construction and interior designing company based in Texas. We offer services such as Interior Design, Construction, Housing Development, Paving, and Remodeling.