Investing in real estate: the popularity of small apartments

Market research shows that small apartments are still in demand as investments. Once, this real estate was purchased for personal use, but now it is viewed as a capital investment. The effectiveness of investing directly depends on the choice of country for purchasing real estate. Typically, for investors, the optimal option is to buy two small apartments rather than one large one. This has several advantages.

Advantages of buying two small apartments

First of all, the likelihood of generating income increases, as the chance that both apartments will remain vacant at the same time is significantly lower. In the case of one large apartment, if it is not rented out, the investor could lose all of their income.

Secondly, the demand for renting small apartments remains high, both in Russia and in European cities. This reduces the downtime of the property and increases its liquidity. Small apartments are easier to sell if an investor urgently needs cash.

Thirdly, the investor has the opportunity to maneuver. Instead of selling a large asset all at once, he can sell one apartment while keeping the other.

The popularity of micro-apartments in Europe

In Europe, there is a trend towards the increasing popularity of microapartments. These apartments, ranging in size from 17 to 35 square meters are usually fully furnished and include a bathroom, a small kitchen and a bedroom. a kitchen and a bedroom. The lack of meterage is compensated by the presence in the building (apart-hotel) storage areas, common recreation areas and laundry facilities. Micro apartments are especially in demand among students, young professionals, business travelers, seasonal workers and tourists.

The micro-apartment market in Europe

The most developed markets for micro-apartments are the United Kingdom and Germany, which account for 86% of all transactions. France and the Netherlands follow behind. The average rental yield from micro-apartments in these countries is 4-6% per year, which is higher than the yield from a regular apartment, typically ranging from 2-3% per year.

Confirmation of investment attractiveness

In 2017, a residential complex was successfully completed in Berlin, confirming the attractiveness of investments in micro-apartments in Europe.

Initial housing costs in Europe

Student accommodation in the UK

LittleLittle

Housing on the real estate market

The real estate market offers various housing options, specifically furnished apartments with an area of 45 sq.m and a terrace, located in a residential complex with a garden and a pool just 100 meters from the beach in Denia, Alicante province. The price for such a property is 112,000 euros. There is also another option - to purchase a 49 sq.m apartment with one bedroom in a residential complex with a pool, garden, and underground parking near the sea for 115,000 euros.

In Turkey, there is also not very high demand for apartments with an area of up to 30-35 square meters. Since the beginning of 2017, the construction of studios has been banned throughout the country, except for Istanbul, where the minimum size of housing is about 28 square meters.

Montenegro: real estate investments

Experts claim that there is a strong interest among investors in studios and one-bedroom apartments in Montenegro. Real estate in these areas has an area starting from 35 m², and prices per square meter range from €2,000 to €3,000. For example, you can purchase a furnished studio located just 100 meters from the sea in Herceg Novi for only €75,000, or an apartment in the old town of Kotor (36 m²) for €108,000. There is also the option of buying an apartment in a new building in Luštica with a sea view for around €120,000. One of the attractive aspects of such properties is the potentially high return on investment when renting out the real estate.

Thailand: real estate and opportunities

Thailand also offers a variety of small-sized real estate options. Young people from different countries are settling here, thanks to the ability to work remotely and the use of advanced technologies for this type of work. The recent demand for such properties not only demonstrates the potential for price growth in this asset class but also the opportunity to generate rental income. According to experts, rental income is around 7% per year after all taxes. Condominium managers take care of finding tenants and conducting transactions.

Moscow: real estate market

Alexey Popov, head of the CIAN analytical center, reports that out of 181 new construction projects in Moscow, only 44 offer small apartments of less than 35 m². More than 64% of these are concentrated within the area between the MKAD and the TTK. Currently, apartments with an area of less than 35 m² make up 18% of the total supply, which amounts to 2.1 thousand lots. The majority of the supply is in comfort-class projects (48.2%), followed by the economy-class segment.

I hope this meets your requirements. If you have any further questions, please let me know!

Conclusion:

In conclusion, it is worth emphasizing that the real estate market, especially the segment of small apartments, is in a phase of active development and shows significant prospects for investors. The trend of purchasing several small apartments instead of one spacious one not only increases confidence in profitability but also provides higher liquidity of assets. In modern Europe, micro-apartments deserve special attention due to the growing mobility in the labor market and the increasing number of tourists. This housing format is being actively implemented in various countries, offering investors competitive returns compared to traditional rental formats.