Residential Real Estate: Types, Importance & Other Details

Many investors like you find it overwhelming to see the number of investment properties available in the real estate market. While people buy residential homes for investment purposes or for living there themselves, residential real estate also has a vast range. Each type of residential real estate property has its own set of challenges and opportunities.

If you want to invest in residential real estate but are still unsure whether you should or not – you must see it from a lens you haven’t seen before. This quick read can help you know everything about residential real estate, so keep scrolling through!

What Is Residential Real Estate?

Residential real estate denotes properties (both land and buildings) used for residential or housing purposes. The most common residential real estate example is a single-family home.

Purchasing residential real estate is one of the most crucial financial investments you make in your lifetime. Say if you were to purchase a residential real estate in Mumbai, its value is determined by:

Residential real estate can help you generate revenue too. Hence, people prefer to invest in residential real estate to:

  • Use it as a money-making venture
  • Flip it for a profit
  • Rent it out to tenants
  • Simply live on their property

Residential Real Estate Vs Commercial Real Estate

The primary difference between residential and commercial real estate lies in their purposes:

  • A residential real estate is explicitly zoned for residential use. They may look different, but they’re designated only for non-commercial purposes. Zoning laws prohibit any large-scale commercial operations in residential real estate. Local laws may allow you to lease your houses as short-term or long-term rental properties.
  • Commercial real estate includes office buildings, apartments, grocery stores, parking garages, hotels and motels and other public-facing businesses. Factories, warehouses, and other properties that are used for large-scale business purposes are considered industrial real estate but sometimes they do fall under the wider category of commercial real estate.

Types of Residential Real Estate

When you say residential real estate, it refers to various types of real estate properties in the real estate sector:

  1. Single-family houses
  2. Townhouses
  3. Condominiums
  4. Multi-family houses

If you want to decide which type of residential real estate is right for you it narrows down to facts like:

  • Your budget
  • Your family requirements
  • The property’s location

Keep all of this information handy before you read further to know which type of real estate is for you!

Single-Family Houses

This suburban house is a stand-alone residential structure that sits on its own land. These single units are meant to be occupied by one occupant or family. They are not divided into multiple units.


Townhouses are housing units that stand side by side and have shared walls separating them. They are also called row houses. This type of housing unit is usually owned individually and has multiple levels.


Condominiums or condos are privately owned units that are located in a large building or within a community of other such units. They are not owned by a large corporation or property management company. The community of all the condo owners jointly owns and maintains the shared areas like

  • Lobbies
  • Hallways
  • Elevators

Multi-Family Houses

Duplexes and fourplexes are examples of multi-family houses. Duplexes are dwellings with two units, and fourplexes are dwellings with four units. Buildings that have five or more dwelling units are considered commercial real estate.

What Is The Right Time To Invest In Residential Real Estate?

This year is a good time to invest in residential real estate. Here is why you should invest in residential real estate in 2023:

You get consistent and high returns

The market value of a residential property is pretty dependent on the amenities. Hence, if you have a better location or amenities, you are much more likely to get a consistent rental income.

You can avail tax benefits

If you plan to rent out your property, you do not need to pay self-employment tax. The tax on it is exempted which is not really the case with commercial real estate.

There is an exponential growth rate

India has now become the most populous country in the world which is a direct indication that the need for housing in India will not reduce. It will just move up. So, any rental income you make from your residential real estate will increase over time.

The research and purchasing process has become quick and easy

Proptech companies like Clicbrics make sure that you get all the information you need about a property’s locality, its market valuation, and transaction history. They ensure you have a wonderful home-search experience. They have made the process of researching a property really simple, advanced and quick.

The railway and road connectivity is better than ever!

As per a 2022 report, India aims to build 1.8 lakh kilometres of highways and 1.2 lakh kilometres of railway lines by 2025. While they increase the intercity and interstate connectivity, you also need to remember that any residential properties located in close proximity will see a rise in demand and costs too.

The Bottom Line

The list of benefits you can get from a residential real estate investment is pretty long. But it is crucial you gauge whether the type of residential real estate you buy is worth your investment or not. Think about the reason why you want to invest in residential properties and how you want to proceed with it.