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how does residential rental property work before we proceed lets pay attention to this question what is residential rental property residential rental property is defined as a dwelling bought by an investor and occupied by tenants under a lease or other sorts of rental arrangement residential property is land allocated expressly for individual or household living or habitation and can range from single family homes to massive multi-unit apartment buildings a commercial rental property on the other hand is leased out to companies in premises zoned specifically for profit generating as opposed to a residential rental property now how does residential rental property work single family homes condominium units Apartments townhouses duplexes and other types of residential real estates are available this phrase residential rental property separates this type of rental real estate investment from commercial buildings where the renter is often a corporation rather than a person or family and