When it comes to choosing how and where to live, the options are endless. Apartments, tiny houses, co-living, micro-apartments…no matter who you are or where you’re trying to be in life, there are different options for many different personalities. The real estate market is constantly changing to adapt to the demographic shifts occurring. The American dream of a household with 2 kids, a dog, and a garage is no longer the norm. People are staying single longer, having kids later and choosing to live in suburbs. In response to these shifts, cities have adopted changes such as micro-apartments in an effort to create more affordable units. Let us take a look at these real estate market trends for housing.
Micro-apartments attract millennials
For those who want to live in expensive places like New York City, rents can be a real turn-off, especially when trying to find a place in a favorable area. Micro-apartments are becoming the new real estate market trend, especially for millennials who are interested are primarily drawn by location. In general, there’s a major shift from millennials in urban locations to so-called 18-hour cities. Micro-units are no longer confined to places like New York and traditional 24-hour cities where you can find plenty places open at 3 am. In the 18-hour cities, you can still go out, in walk downtown, and grab something before things close at around 10 p.m. In addition to location and a desire for privacy, there’s a strong economic draw to micro-units since typically, they rent for 20 to 30 percent less than larger units in the same neighborhoods. This is another reason why micro-apartments attract millennials and are increasingly becoming part of the most popular real estate market trends.
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So one very important question worth asking is, what do investors need to know and do to make micro-apartments investments successful? The units need to be carefully designed to maximize the space. Basically, people who rent them don’t want to feel like they’re in a hotel room. They still need enough space to be able to fit a full size refrigerator and full bathroom, since I doubt that anyone would be pleased to share a toilet or shower with their neighbors. Also there’s likely to be built-in furniture and storage and shelving that reaches the ceilings. A table may convert into a seating area for example. In general, these micro-units should offer an extensive array of amenities so that people can live comfortably. Investors must always keep these details in mind when investing in micro-apartments in order to succeed.
Pros and cons of micro-apartments/micro-housing:
Real estate market trends bring both the good and the bad. The micro housing trend is sweeping the globe as people are becoming more fascinated with the idea of a minimalist lifestyle. The benefits of micro-housing are numerous, let us mention the major ones.
1. Reduced cost
Obviously, the smaller your home is, the less likely you should pay for building costs, taxes, insurance and utilities. And for some people who may not qualify for a high dollar mortgage, building their own tiny house is a great way to enjoy the perks of home-ownership without being burdened by long term financing obligations. Also, when it comes to daily expenses, people who choose to enjoy compact living are likely to use far less electricity or gas to cool and heat their home. This can result in great savings, leaving the homeowner free to spend their hard earned money on other, more enjoyable pursuits. Just imagine all the things you could do if you saved thousands of dollars a year just on utilities!
2. Elimination on clutter
More people are striving to live a simple life. It stands to reason that the more space we allow ourselves to have, the more tempted we are to fill that space with unnecessary “stuff.” This stuff is, in all likelihood, not needed in our lives, but an inborn desire to have more conveniences. For people who adopt the minimal lifestyle by living in a tiny home, accumulating clutter is an impossibility. After all, if you only have 750 square feet of living space, you’re probably going to use that space for only the necessities.
3. Decreased rate of homelessness
In a city like New York City were the rate of homelessness is gradually increasing, real estate market trends like micro-housing will help decrease this rate. More affordable housing options will help those at risk of homelessness and keep people self-sufficient.
This real estate market trend comes with disadvantages as well. The disadvantages of micro-housing are:
1. Illness or injury
Living in a tiny house while being sick or injured can be uncomfortable and depending on the situation, impossible. This is why tiny houses get such a bad reputation for retirees and the aging population. A loft can be an overwhelming problem if you are suffering from a back injury. So for people who have any sort of health problem can suffer a lot if they decide to live in micro-apartments.
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If you really have a problem with confined spaces, micro-apartments may not be the right fit for you. However, I am not going to say that being confined to 120 square feet doesn’t occasionally make you want to claw at the walls. The bright side is that most people choosing to live in these types of properties, are really only looking for a place to sleep and shower. Otherwise, they spend the majority of their time out.
3. You know you want to move to a bigger home eventually
Since the micro housing scene is still pretty new and is just slowly becoming a real estate market trend, it’s difficult to say just how long it will last, therefore making it difficult to predict how a tiny home’s market value will do in the future. If you invest in a tiny home now, there are no guarantees that you’ll be able to sell the home a few years down the line. Tiny housing is certainly taking off, but who’s to say it’s not just a passing trend? Although you will spend far less on a tiny house as opposed to a traditional-size home, you should go into the deal with the understanding that you may not get a solid return on investment if you decide to sell. And we all know deep down inside we all dream of owning a house of our own that is big and spacious.
Real estate market trends come and go and the one thing that investors must keep in mind is to always keep up with these trends in accordance with what suits the people in each area and their needs. Be sure to check out Mashvisor for the latest real estate market trends.