Can You Change a Commercial Property to Residential?

[BLOG] Published: 2022-04-19 - Updated: 2023-05-31

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Commercial Renovation Commercial Property to Residential Changing a Commercial Property to a Residential The Advantages of Changing a Commercial Building Into a Residence

Can You Change a Commercial Property to Residential?

Real estate is just like any other form of investment. It is expected to grow in popularity as a result of its potential to generate substantially larger profit returns. This is especially true if you decide to turn your commercial property into a home.


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Changing a commercial property to a residential one can be a very profitable investment plan if it is located in the proper area. It can potentially generate a constant supplemental revenue stream for investors like you.

If zoning and housing laws allow it, commercial property can be changed to residential property.


Before switching from one zoning to another, investors must confirm that the commercial property is up to code. It's crucial to keep in mind that commercial and residential buildings aren't designed to the same standards.

Changing a Commercial Property to a Residential Property: Some Pointers

As earlier stated, depending on the property's zoning laws, commercial property can be used in a variety of ways. Is it possible to change the zoning of a commercial property to residential? Yes, you can! Converting a commercial property to a residential residence can be a very profitable financial option.


Commercial properties in the appropriate location can be good fits for additional residential housing alternatives. This is due to a variety of factors like proximity to facilities, building quality, and more. That isn't to argue that all commercial buildings are good residential assets.

Learn what to consider when converting a commercial property to residential property by reading the following article.

Locate the Best Property

Most commercial to residential property conversions can offer high-profit potential. This is as long as the property is in a desirable location where there is a guarantee of profit. As a result, before you embark on the transformation, make certain that you have located the ideal property for your real estate investment.

Purpose of the Property

If you plan to rent out the property after the conversion, pick a location where there are a lot of potential tenants. You'll be able to get the most out of your rental income in the long term this way. ( UpCounsel, 2020)


It is important to note that any change of use from commercial to residential usually requires planning permission from your local authority. You'll likely find that the government is encouraging such changes of use as part of the National Planning Policy Framework.  


ProTip Takeaway: Keep in mind that the change of use only applies to the current structure. If your plans include expansions or renovations of shop fronts, for example, they will be subject to the usual planning consent regulations.

Establishments and Essential Public Services 

Always look at the neighboring community when looking for a property to convert. If you plan to rent out the property, for example, it's beneficial if it's close to establishments and essential public services.

ProTip Takeaway: Having these facilities that can help to improve your tenants' quality of life.

Make a Financial Plan

You will need to have enough finances to pay for the expected costs during property conversions. No matter how much money you're working with, it's a good idea to make a financial plan before beginning the property conversion process.





The good news is that there are numerous ways to fund and begin the property conversion process without jeopardizing your financial security. Bridging finance, for example, can be a good alternative if you need money to pay for property renovations.


ProTip Takeaway: Bridging finance, among others, can give you a fast funding solution so you can get started on the renovations right away.


Once you have the planning permission in hand, you may want to consider renovation insurance. The insurance will protect the property during the construction process. It will also meet any obligations to have adequate buildings covered under the terms of your mortgage agreement. (S-Ehrlich, 2021)


ProTip Takeaway: Look for an insurance company that can help you protect the property during the construction process and to meet any obligations that may arise during the conversion process.

Exceptions to Be Aware of When Changing a Commercial Property to a Residential

Many commercial buildings are now eligible for conversion to residential use. However, there are several exceptions to be aware of. These are some of them:


  • Commercial buildings in national parks or conservation zones
  • Commercial buildings in designated natural beauty/scientific interest regions
  • Commercial buildings that are designated as historic landmarks
  • Commercial buildings in military explosive zones/safety danger zones

If you're not sure about the building site and the exceptions it may have, be sure to double-check before you buy. Some of the aforementioned examples may be possible to convert to residential properties.


They will, however, want full planning authorization as well as architectural designs. Furthermore, the job may be required to meet a certain standard, and government restrictions may limit your design options.


ProTip Takeaway: Be sure to check with your local authorities in all you do. You will find that different local governments have different sets of restrictions, with some having more limited permitted permits than others.

Changing the Zoning of Your Property From a Commercial Property to a Residential

When changing a commercial property to residential use, it's also crucial to modify the zoning description. You can do this if you've completed your research and found a property that meets your needs. You'll need to acquaint yourself with the various zoning rules and regulations in your area in order to begin the rezoning process. The following steps can be included in the procedure:


  • Assess the Local Area

If you want to rezone your commercial property, you can leverage changes to the land near your property, such as new roads or buildings, in your favor. However, some neighbors may reject your rezoning plan. A careful assessment of your neighborhood may reveal adjustments that may promote your cause and appeal to others.


  • Read and Understand Local Zoning Laws

Make sure you familiarize yourself with the local zoning laws and regulations. With some online study and a visit to your local planning department, you can learn about zoning restrictions in your area. (Entrepreneurship in a Bo, 2021)


  • Engage Your Neighbors

Your rezoning proposals may face opposition from your neighbors. As a result, talking to your neighbors and making a positive impression can be advantageous to you. Any opposition from your neighbors will influence the decision of your planning department. They can either approve or deny your request based on this.


  • Begin With the Paperwork

Fill out the necessary paperwork provided by the planning department in your area. Make sure to factor in the cost of fees, which could range from hundreds to thousands of dollars depending on your location.



Your rezoning plan will be evaluated after you've submitted your application. If there are any objections, you may need to make changes to your proposal to get the necessary approval.


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  • Meeting of the Commission

Your rezoning petition will be made public in order to inform local residents about the plan. Following that, a committee meeting will be held to allow residents to voice their concerns and for you to clarify your position.


  • The Final Decision

The commission will issue a recommendation following the meeting which will be submitted to a legislative body. The legislative body will then make the final decision on your application. If your application is turned down, you may have to wait a set amount of time before applying again. (Fortune Builders, 2021)

Read Also: How much does it cost to remodel a retail store

 The Advantages of Changing a Commercial Building Into a Residence

A commercial-to-residential changeover has a number of significant advantages. Here are a few examples:


Advantages of Changing a Commercial Building Into a Residence

The prices are reasonable.

It's a clean slate. 

It can be a quick sale. 

Commercial properties are frequently in prime locations. 

Possibility of forming an HMO


The prices are reasonable. Commercial properties are currently more competitive than ever, resulting in cheaper prices than residential properties. This means that there are a lot of opportunities to get a building that you can add value to and convert for a profit.


It's a clean slate. To make your commercial space appropriate for residents, it will almost certainly need to be completely renovated. This means you have a lot of freedom to rearrange and design the building whatever you like without being restricted.


It can be a quick sale. Owners of commercial properties are sometimes eager to sell as soon as possible. If a commercial facility has been vacant for a long time, the owner is most likely eager to sell. This means there's a lot of potential for price negotiation.


Commercial properties are frequently in prime locations. Commercial properties are mostly found in desirable sites, such as city centers or near public transportation. This increases the property's appeal to potential purchasers or tenants.

Possibility of forming an HMO (Houses in Multiple Occupation). Converting a business facility into an HMO is a terrific alternative if you really want to maximize your profits. This allows you to rent to numerous tenants at the same time, resulting in a larger rental income. (Simple Landlords, 2021)

Are you Ready To Convert Your building?

Do you want to change a commercial property into a residential one? If you're brand new to property investment or have a few deals under your belt, Smart Remodeling LLC will teach you everything you need to know to get started.

Our experts will also offer the finest real estate methods to help you go on the road to a better financial future. Please contact us today and we will be happy to connect you with our skilled residential experts.

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