Advantages And Disadvantages Of Investing In Studio Apartments For Rental Income

Photo of author
Written By Adrian Cruce

 

 

 

 

 

Studios are constantly growing in popularity at the moment and they do appear in basically all cities from around the world. These properties are really popular for investors and people that want to live there. We see the tenants as being part of the working class, which looks for modern, manageable, stylish houses. In the past few years, there were studio apartments that appeared in various metro cities around the UK and so many already do exist in the USA.

studio apartments

How Will You Make Money As A Landlord?

The landlord can make money in basically 2 ways: rental income and capital growth. As the property increases its value as time passes, this is known as capital growth or capital appreciation. However, the value of a property can also go down, which is definitely not what you want to see happen. Local conditions will have a huge impact on property value.

Rental income is a factor that all investors will want to consider. Tenants will pay in order to live in your property. Hopefully, you get the opportunity of getting growth as time passes. While rental income cannot actually be predicted, it is the most viable way in which you could make money with your studio apartment. Due to the recession, the entire rented sector grew and rental prices follow annual increases based on inflation.

Why Invest In Studios?

Many of the property developers will include many studio apartments in projects. This is mainly due to the fact that they are really popular. You will notice that you make less money per month as with other possible investments but you will not actually have to deal with less downtime as the request is really high at the moment. You will not see studio apartments decaying in value in the near future, which is a great reason why you should seriously consider investing in them.

Related Article:  Buying Real Estate in China

Studio apartments are currently referred to as being bachelor apartments. They are self-contained, small and highly affordable for a large number of people. You will not have problems filling a vacancy and the money that you get per month as compared with other options is more valuable.

It should be added that buying a studio apartment is not expensive, which is definitely something that counts for an investor. You have really low stamp duty and you will have no problems in getting a loan from a bank so that you can buy one to then rent out.

Studio apartments are really good for the starter real estate investor or the investor that likes a conservative approach. Many see real estate as a save option for investment so the purchase of a studio apartment is definitely great because of the low amounts you will have to pay if you get a loan. You should consider this option since it is perfect to start your journey in real estate investments.