When buying an apartment for subsequent renting out people often start from the prevailing real estate stereotypes. The main one, related to apartment rentals, sounds something like this:
«The most profitable investment is the purchase of a one-room apartment with small area, which is near to the underground station. Buying such real estate for subsequent lease, you will not fail!»
But is this really like that? What happens in practice?
Comparison of one- and two-room apartments from the point of view of the landlord
Analyzing the announcements of renting apartments in the long term, you can see at first glance a rather strange pattern.
In terms of the old housing stock, the most common total area of one-room apartments is in the range of 28-34 quadrant meters. The area of «two-pieces» is about one and a half times larger and is usually 42 to 51 «squares». As a result, the estimated price of two-room apartments on sale will be about one and a half times higher than the prices for one-room housing.
At the same time it can be noticed that the cost of rent two-rooms one is not so different from one-room one as the prices of sales. There’s only a 25 percent difference. At first glance it seems: why buy a two-room apartment for rent one and a half times more expensive than a one-room apartment, if it will bring «only» 20-25% more income?
Do not forget about the landlord’s expenses for the maintenance of the apartment
Despite this difference in prices and rental rates, experienced landlords are more likely to buy it is a two-room apartment for subsequent lease. Why do they prefer such real estate? Let’s note the following nuances of apartment rentals, which beginners inexperienced investors usually do not pay attention on:
- Renovation of the apartment when changing the tenant. It is important to take into account that when changing tenants for profitable delivery of the apartment to the next tenant, you need to «refresh» the repair in the room. As a rule, it is simpler and cheaper in this regard, the situation is in the living rooms. Walls enough to repaint or change wallpaper. It is also possible to change the flooring. Most often in the apartments for rent on the floor is laminate, change which is not a problem. In this way, cleaning a two-room apartment after the tenants is not much more expensive than a one-room apartment.
- Maintenance of household appliances and furniture. As a rule, a one-room apartment with furniture and household appliances is little different from a two-rooms one. After all, in the one-room apartment living room and bedroom are combined, there is usually a sofa or armchair, and a bed. And in the «two-rooms apartment the bed is simply put into a separate room. Therefore, the cost of maintaining furniture and equipment for one- and two-bedroom apartments is approximately the same.
- Different target group of tenants. It is also important to consider the number of tenants depending on the number of rooms in the apartment. In most cases, one-room apartments in the old housing stock are rented by young non-family people, most often students. Accordingly, you need to be prepared for the fact that the apartment will often be held various crowded holidays. As a result, the apartment will wear out much faster. Moreover, young people are not always able to calculate their finances correctly and plan their lives over a significant period of time. This means that you should be prepared for more frequent changes of tenants. And for more «deep» repair after each of them.
So what is more profitable for renting: one-room or two-rooms
We analyzed the lessor’s expenses for maintaining the apartment and its parts in a proper form. Now it becomes clear why, at a significantly higher price of a two-room apartment, its rent is not so higher than a one-room apartment.
This is due to the fact that a significant role in the rental business is played by the cost of maintaining the property in order. Of course, what is more profitable in each case, you need to calculate everything individually. At least we have drawn your attention to the factors that must be taken into account when planning a business.
But in general, based on our practice, in terms of profitability, studio and two-room apartments have about the same attractiveness. However, with the same level of profitability, a two-room apartment usually brings its owner less problems and headaches. Well, the choice of a particular residential property remains for you.