Key Differences Between Commercial and Residential Construction

Commercial and residential construction differ in nearly every way from the building materials used to the equipment required, and even the way funding is achieved. The differences start with how the residential properties are used compared to commercial properties.

Notably, residential construction refers to buildings that are designed to be lived in.

Residential includes:

  1. Single Family, Detached Homes
  2. Duplex, Triplex, Fourplex
  3. Townhouse
  4. Some housing co-operatives
  5. Condominiums

Even though apartment buildings are designed for residential use, large-scale apartment complexes are considered commercial property since space is leased out to others as part of a rental business.

Commercial buildings are more varied as compared to residential properties. While residential properties are entirely used for private living quarters, commercial refers to any property used for business activities.

Commercial refers to hospitals, assembly plants, shopping centers, office spaces, storage warehouses, or any other business enterprise location. Commercial and Residential properties have key differences as follows.

Building Materials Used in Commercial and Residential Construction

Commercial and Residential Construction projects entails certain materials to meet the demands of a building design.

In general, the materials utilized in the construction of residential construction are much different from those used in commercial buildings.

The average home uses timber frame construction because timber is deemed to be the most cost-effective and structurally appropriate for smaller-sized buildings.

Companies that focus on residential construction are best-suited to complete traditional timber frame construction projects.

Commercial construction projects have larger, more complicated design requirements that demand various materials than the timber commonly used for residential properties.

Codes and Permitting

Commercial buildings have stringent regulations than residential ones. Both Commercial and Residential Construction  require adherence to specific codes and obtaining permits from the municipality where the structure is being built.

However, commercial properties have different rules & regulations for:

  • Building materials
  • Plumbing
  • Size
  • Construction techniques
  • Design
  • Electrical systems

Construction management professionals for commercial projects are experienced in the relevant local and federal building regulations essential for commercial projects.

Although residential buildings also adhere to building standards, these requirements are considered easier to comply with than commercial construction.

Significant Cost Differences

The overall costs for residential and commercial developments are vastly different. That is even for buildings of comparable size.

These cost differences come from the materials and compliance standards explained above. They can also emanate from costs related to overhead, labor, and equipment. Funding for commercial versus residential construction is completed using various protocols.

Commercial projects are often funded by:

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

Residential construction projects are paid for with following methods:

  • Bank loan
  • Cash
  • Insurance loan
  • Government Agency/Non-profit

Residential projects comprise extensive interaction between homeowners, contractors, and subcontractors. Work is regularly scheduled through referrals or marketing instead of bidding.