Frequently Asked Questions

What Is Residential Property?

Residential property includes properties such as houses, flats, townhouses, condominiums and any other spaces where people live. Residential properties have been developed for the purpose of living, and therefore, using a residential property for business or commercial purposes tends to be prohibited.

A property is categorised as residential through a process of ‘zoning’, which means that the property is not to be used for non-residential purposes – whether it is an undeveloped plot of land or an empty property.

In technical terms, the description ‘residential property’ is used for an owner-occupied space, and for tax purposes, a residential property can be defined as a rental property with a minimum of 80% income from dwelling units.

What Is Commercial Property?

Commercial property is any property that has been designated for business use.

What Is Commercial Property Investing?

Investing in commercial property has a number of benefits, particularly as it is an asset class that diversifies your investment portfolio, therefore spreading the risk. There are several ways of investing in commercial property, including direct investment, direct commercial property funds, and indirect property funds.

Direct investments describe the partial or full purchase of a property, whereas direct commercial property funds – also called bricks-and-mortar funds – are collective investment schemes that invest directly into a portfolio of commercial properties which would be out of reach for the individual investor.

Indirect property funds are collective investment schemes that focus on the shares of property companies listed on the stock market. Whilst they are a way of investing in commercial property, this type of investment does not offer the same diversification as more direct methods of investing, as property shares tend to follow trends in the stock market.

What Is Property Development?

Property development is the process of designing and building properties of all types, from warehouses and shops to houses and flats. Property developers create the built world – all of the buildings and spaces that we use on a daily basis. The aim of the property developer is to develop land or buildings into a higher use value, which can include buying an empty plot of land to build upon; renovating or extending an existing property; and converting a property from one use to another.