Difference Between Residential and Commercial Construction

Difference Between Residential and Commercial Construction

Whoever said that the size of a building imparts no bearing on the amount of happiness gained from living in it has never built a building or commissioned the completion of a site plan.

It takes hard work, sacrifice, planning, money, and dedication to finish a construction process professionally. And it isn't easy to satisfy the commissioning client, city council authorities, or the end-user residents with a finalized construction project.

The best way to get a professional construction finished is to use the right site plans, floor designs, and conceptualization for the right job. And there is no one-size-fits-all site plan, construction design, bidding process, or construction process that can be contributed to every type of construction project.  

For example, too many people think of a "building construction project" as a generalized term. "General" construction projects don't exist, especially when it comes to the erection of dwellings and multi-story buildings.

Many factors go into constructing a residential or a commercial building. For example, the site plan designs, building materials, construction methods, fundraising methods, and marketing strategies for residential and commercial building construction differs significantly.

The most crucial factor in building construction, which differs for residential and commercial projects, is the site plan design. After all, no construction can begin with a viable site plan.

So, let's discuss the difference between residential and commercial building construction.

If you need consultation guidance with construction site plans, then contact My Site Plan today.

Let's start by defining the difference between residential and commercial construction, of which there are many.

Related: How To Add Space To Your House: Home Addition Ideas

What is a Residential Property?

The best way to highlight the process differences between residential and commercial building construction is first to take some time to define each.

A typical residential property is a house or building designed for short-term or long-term habitation by an individual, multiple persons, or a family. 

There are many different kinds of residential properties. A residential property can be a:

  • One-story or two-story single unit house
  • Duplex 
  • Triplex
  • Fourplex
  • Trailer home community
  • Multi-unit apartment building 
  • Condominium
  • Townhouse
  • Hotel
  • Dormitory
  • Suburban community 
  • Cooperative living community

Some residential properties can also double as commercial property. For example, an apartment building or condominium is legally classified as a commercial property instead of a residential one, even though the property functions as a habitation (more on that later).

While some people buy residential for investment or resale purposes, many buy them for habitation, raise a family, or perpetuate a familial legacy. Residential properties are meant to be lived, so the values for homeowners and renters are more emotion-based than investment-based, like in a commercial property.

It typically takes seven months to build a single-family residential home.

What is a Commercial Property?

Upward view of skyscrapers in midtown setting


A typical commercial property is a building, land, or property expressly used for profit-making, business, and investment purposes. 

Here are some examples of commercial properties:

  • Office building
  • Lodging
  • Movie Theater
  • Restaurant
  • Hospital or medical clinic
  • Parking garage
  • Farmland
  • Mall
  • School, high school, or college
  • House of worship
  • Warehouse

A commercial property exists to generate profit for the owner. It typically takes about 11 months to build an average-sized apartment building with 20+ units in a city.

Now that we have this baseline understanding of the difference between a residential and commercial property, let's dive deeper into those differences.


Residential properties are designed to be lived in and used for habitation. Most people rent or buy a home for years or decades. Homeowners and apartment renters live in dwelling alone or with families and fill them with emotional belongings. 

Residential properties are designed for people to live in and be owned by individuals, banks, or investors. Some residential properties are also commercial properties, like apartment buildings or condominiums. Even though a condominium operates for profit-making and investment purposes, it is designed for habitation.

However, all commercial properties exist for profit-making purposes. 

A school is a commercial property that generates income through taxes or dues. A restaurant is a commercial property that generates revenue by offering culinary services.

Commercial office buildings exist to rent spaces to multiple businesses that operate within it, and so on. 

It is essential to explain these distinctions before explaining the differences in the construction processes for each.

Building Materials

One of the most defining differences between residential and commercial construction is the building materials used in each process. 

The building materials for a single-family home will be a lot cheaper than the material required to build an office building. While the site plan designs for a home are never simple, they are relatively less complicated than those required to construct a commercial office building.

The most plentiful building materials in a single-family home are wood, drywall, and cement for the foundation. Depending on the home's size, construction can be finished within three months to seven months.

The construction of a commercial property or building requires sourcing any kind of materials and the employment of specialists who know how to use such materials. When it comes to constructing high-rise commercial buildings, building materials have to be ordered in stages to accommodate construction in phases.

The construction of a commercial building may require large requisition orders of glass, metal rebar, cement, steel, scaffolding, wiring, and so on. It can take a year to complete the construction of a commercial building in optimum circumstances.


The permit process to build a residential building instead of a commercial building is shorter and relatively straightforward. 

It can take seven days or two weeks to get a permit for a residential property. Meanwhile, it could take a month or longer to obtain a permit to construct a commercial property depending on the project’s scale..

The potential homeowner or property owner can apply for a building permit to build a house themselves. The owner or investors behind commercial property construction need to apply for a building permit with a local city council or relevant authority.

It All Starts With the Site Plan

Designers overlooking construction site plans on whiteboard


There are too many differences between the construction of residential and commercial properties to list.

Consider that securing the code and zoning requirements for a single-family residential home is relatively more straightforward than for a commercial building.

What both construction processes have in common is the reality that construction can't begin without a reference to a professionally commissioned site plan.

Need help with a construction project? Consult with My Site Plan today.

Related: How to Create a Parking Lot Plan


Frequently Asked Questions (FAQs) Answer
What are the typical challenges faced during the construction of residential properties? Challenges include managing budget constraints, dealing with unexpected construction delays, ensuring compliance with local zoning laws, and meeting the specific needs of future residents.
How does the complexity of site plans affect the construction timeline for commercial buildings? More complex site plans can lead to longer construction timelines as they require detailed approvals, sophisticated logistics planning, and coordination of more specialized labor and materials.
What are the financial implications of building residential vs. commercial properties? Commercial properties often involve higher upfront costs and potential for greater profit margins due to their income-generating potential. Residential properties generally have lower initial investments but also lower returns compared to commercial investments.
How do environmental regulations impact residential and commercial construction differently? Commercial construction projects may face stricter environmental regulations related to their larger scale and potential impacts on the environment. Residential projects, while still regulated, often have less stringent requirements.
What role does technology play in modern building construction? Technology plays a crucial role in modern construction through the use of Building Information Modeling (BIM), automated machinery, and advanced materials that improve efficiency, safety, and sustainability in building projects.

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  • Ryan Crownholm