“Should I Invest in studio apartments for sale?” is a common question among real estate investors at varying levels in their property investing careers. Because there are so many different types of residential homes, it can be hard to know where to start or what to add to an income property investment portfolio.
Nonetheless, studio apartments for sale can make for some of the best real estate investments in the housing market.
Of course, no real estate investor should jump into an income property investment just because someone says it’s a good idea. You need to know exactly how you can benefit from investing in studio apartments. Let’s explore all of the reasons why real estate investors should consider investing in studio apartments for sale.
Investing in Studio Apartments for Sale: Invest in Almost Any Housing Market!
Studio apartments for sale are always on the list for property development. These small units are a low-cost option for property development. At the same time, studio apartments for sale mean almost immediate profit for someone in property development, as they are easy to sell and thus sell quickly.
What does this mean for real estate investors? You can find studio apartments in the housing market of your choice as they are often part of property development projects. Want to start investing in studio apartments for sale close to home or out-of-state? You won’t be limited to a specific housing market when investing in studio apartments for sale. Choose the ideal location that fits your real estate investment strategy.
Click here to find the ideal location in the housing market for your studio apartment.
Related: Where to Look for The Best Real Estate Investments for 2018
Investing in Studio Apartments for Sale: Invest with Less Money!
Beginner real estate investors don’t always have a lot of cash to put towards a real estate investment. With studio apartments for sale, this cash flow problem won’t stop real estate investors from making money in real estate. Studio apartments are pretty affordable compared to other types of real estate investments. Even the typical monthly mortgage payment for studio apartments is relatively low.
Tip: Mortgage lenders can sometimes be a little strict when it comes to financing smaller studio apartments for sale. Look for studio apartments that are on the larger size. Your best bet will be to shop around for a mortgage lender who will give you the best rates.
Spending less money on an income property investment naturally has a few advantages for a real estate property owner:
Capital Appreciation of Studio Apartments for Sale
Because they are low cost, studio apartments for sale will end up building more capital appreciation in the long run. Capital appreciation is when the value of an investment property increases over time. If a real estate property owner holds onto a studio apartment, eventually selling at the right time will produce a significant profit due to capital appreciation. Of course, capital appreciation depends on the location of studio apartments for sale as well as the housing market, but in general, a real estate property owner should be able to benefit from it.
Greater Rental Yield for Studio Apartments for Sale
The rental yield of an investment property takes into account the rental income compared to the investment property price. Rental income from studio apartments is usually high and steady simply because there is demand for the income property from tenants. Good rental income compared to low investment property price means strong rental yields. In fact, because of the rental income and the low property price, investing in studio apartments for sale can bring a rental yield of 1.5% greater than larger apartments with one or two bedrooms.
Tip: Look for locations with high rental income when investing in studio apartments for sale to produce an even greater rental yield. Visit Mashvisor to look at the rental income from real estate investments in cities and neighborhoods from all over the US housing market.
It would seem then that investing is studio apartments for sale is a great way for making money in real estate from both rental income and capital appreciation. An investment property that brings profit from both for a real estate property owner is a winner.
Related: How to Make Any Rental Property into a Positively Geared Investment Property
Investing in Studio Apartments for Sale: Invest with Little Risk!
One of the risks that come with real estate investments is vacancy. Sometimes, a real estate property owner has what seems to be a great investment property on paper, but if he/she can’t find tenants, it’s pointless. Studio apartment tenants are easy to find, and high occupancy rates are a general trend for studio apartments.
Another major risk for real estate investments is not being able to sell an income property. With studio apartments for sale, a real estate property owner will find a large pool of buyers including real estate investors, owner occupiers, and young millennials looking to own their first place.
Real estate investors know that high demand for an investment property can be one of the best ways for making money in real estate.
Tip: While studio apartments for sale inherently attract tenants, the location is a big factor. Perform investment property analysis and investigate the neighborhood to determine if it will be desirable to tenants.
Investing in Studio Apartments for Sale: Invest in Airbnb Rentals!
Not every kind of investment property has the potential to be used for Airbnb rentals as much as single family homes. However, studio apartments for sale are a great alternative for Airbnb rentals if single-family homes aren’t in your budget. For one, studio apartments are generally located where tenants of Airbnb rentals flock to (major city centers near nightlife and popular attractions). The size is also ideal for Airbnb rentals, as short-term tenants are usually not looking for a lot of space. The combination of studio apartments for sale and Airbnb rentals is a great way for making money in real estate.
Related: Four Things to Consider Before Purchasing an Airbnb Investment Property
Now you can jump right into this income property investment! You can be confident in the benefits that studio apartments bring to real estate investors. Make studio apartments for sale your next real estate investment.
Click here to look for studio apartments with the help of Mashvisor.