Micro apartments for sale might be just what you are looking for. We have listed all the reasons to help you be sure this is the right real estate investment for you.
What Are Micro Apartments?
Micro apartments are real estate properties usually 250-300 sq. ft in size, but sometimes they may be as large as 600 sq. ft. They are a one-room space, similar to the idea of a refined studio apartment. Micro apartments may have private amenities or even shared amenities like kitchens, bathrooms, and balconies.
Related: Real Estate Market Trends: Living in Micro Apartments
5 Reasons to Invest in Micro Apartments
Micro apartments for sale have been called the next big thing in real estate and might be the perfect match for you. Here are 5 reasons why they make for great investment properties in the US housing market:
1. Because of Who They Attract
A big portion of the population in the U.S. is now millennials. Millennials are the generation born roughly between 1981 and 1996. Studies show that millennials have low incomes paired with high student loan debt. As a result, the millennial generation has delayed marriage and purchasing houses compared to older generations. This is why they are attracted to smaller micro apartments for rent; because they can afford it and are more likely to want to live alone.
Micro apartments are pre-furnished with space-efficient and energy-efficient furniture. This is another factor that attracts millennials because they are more likely to move than other generations and will also travel light.
Currently, millennials make up 30% of the workforce in the nation. In two years, they are expected to make up 50% of the workforce. This increase will affect the demand for micro apartments, causing it to rise. So if you find micro apartments for sale in a growing metropolitan area, it would be a great opportunity for real estate investment especially with the growing population of millennials. Millennials gravitate toward bigger cities like Los Angeles, San Francisco, Chicago, Boston, Portland, Denver, Miami, NYC, and Seattle. And in such cities, micro apartments for rent can be a cheap alternative for them. So if you can find a rental property investment in these cities, jump on it!
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Related: Location Location Location: What Makes for The Best Place to Invest in Real Estate?
2. Choice of Rental Property Investment Strategies
The main reason micro apartments for sale are now among the popular real estate trends is that you have a few choices of what to do with them.
As mentioned, micro apartments for rent are attractive to millennials, making them good long-term rental opportunities, but they also attract tourists. The modest size of micro apartments is perfect for tourists visiting cities for short periods of time. Because of this, a micro unit owner has the freedom to use his/her investment property for long-term or short-term rentals. If the real estate investor is smart, he/she will utilize both rental strategies during the right seasons to optimize cash flow. If you are in a college town, for example, you could rent your micro apartment to students throughout the academic year, and then during the summer, rent it out on Airbnb to tourists.
3. More Affordable
Usually, micro apartments are among the more affordable real estate investment properties. It is typically a lot cheaper to buy a micro apartment than to buy any other type of real estate, like detached single-family homes or condos. This is especially true with the rise in the cost of housing across the US real estate market. This is also why a lot of beginner real estate investors look at micro apartments as a starting point.
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4. High Demand
While micro apartments for sale seem to be among the newer real estate trends, they have actually been around for a long time. They have only increased in demand recently because, as we stated earlier, the rise in millennials.
Buying micro apartments could be the right move for you if you chose to invest in the right locations where the high demand will be. For example, in Seattle, 5,500 micro units were built from 2012-2015. And in other cities, like Los Angeles and San Francisco, where affordable housing is needed and land space is scarce, micro apartments could be the most logical solution.
Boston also started a pilot program in 2015 that will allow housing developers to build smaller, cheaper micro units. Investing in micro apartments for sale in these cities would be perfect for someone looking to generate rental income.
Related: 10 Best Places to Invest in Real Estate in 2020
5. Ease of Rental Property Maintenance
You can tell from the ‘micro’ in ‘micro apartments’ that these units are small. Like we stated earlier, micro apartments will be (at max) 600 sq. ft. Usually, they are 250 sq. ft, about the size of a one-car garage. This size will, as expected, be very manageable. As a property owner of a micro apartment, you will have little to worry about when thinking about maintenance. The units will have few utilities and a smaller surface area so it will be a lot simpler to maintain compared to two-bedroom or three-bedroom apartments and detached homes. Buying a micro apartment for investment will be undemanding, but will still help you make money in real estate.
Micro apartments are, in fact, a practical option for real estate investing- particularly now that the demand for smaller and cheaper housing is at an all-time high and will only continue to skyrocket. So, think about choosing micro unit apartments for your next property investment. You will surely enjoy the high occupancy rates with both short-term and long-term rental property investment strategies.
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