Commercial investments produce an average yield of 10.7% while residential properties offer just 3.7%, new research has claimed.
Scotland is home to the highest commercial yield at 20.4%, along with the South West (13.7%), while Scotland is also where investors can find the highest residential yields '� along with the North West - at 4.4% and 4.3% respectively, according to agent Benham and Reeves.
But when it comes to the initial cost of investing, the average residential property needs a �259,850 budget, but with an average value of �454,384, a commercial investment needs a budget that'�s 75% larger.
Benham and Reeves says that it is also easier to find residential stock as the market offers far greater choice, with 541,966 listings compared to just 12,022 across the commercial space.
London and the South East rank highest for residential stock availability, accounting for 19% of all listings, followed by the East of England (12%).
Those eyeing a commercial investment are better placed investing in the South West and North West where there'�s greater stock at 12.9% and 12% respectively.
Benham and Reeves director Marc von Grundherr says both the residential and commercial markets have been impacted by the pandemic which means that it'�s hard for investors to know where to put their money.
He believes the best approach is a balanced portfolio.
Von Grundherr (pictured) adds: 'While a commercial investment may offer a higher yield, the recovery timeline as a result of the pandemic is set to stretch on far longer than that of the residential rental market and residential property investment remains by far the dominant force where availability, affordability and total sector value is concerned.
But commercial investment can provide a more hands-off approach for those doing so through a third-party platform, while the amateur buy-to-let landlord is sure to spend more time sorting out tenant issues.'�