Five points to consider when looking at one-bedroom investment properties

rent a room

Traditionally investors veer away from one-bedroom properties; industry experts seem to think you won’t get the resale value or you’ll have difficulty in renting it out.

However, times are changing.

More people are choosing to live alone and many are looking for a lifestyle living in the middle of a vibrant centre or desirable area rather than living in a larger property out in the suburbs.

One-bedroom properties are becoming increasingly popular for both investors and home-buyers alike. They are usually cheaper than other properties. For some they offer a real opportunity to get a foot on the property ladder while for others, they offer a cheap alternative in instances such as a relationship split or wanting to downsize to a manageable property.

Here are five points to consider when looking at one-bedroom investment properties:

Location, location, location

Whether it is a one-bedroom apartment or a five-bedroom mansion, the key to any investment property is the location. If you’re looking to purchase a property in a highly desirable area, but your budget is a bit low, a one-bedroom apartment may be a real option.

Size matters

While people are choosing to live in one-bedroom apartments, they still like their space! Look for properties with a large living space and a good-sized bedroom. A parking spot is also a major plus for many tenants.

It’s also worth noting, some loan companies demand a higher deposit for one-bedroom properties less than 50 square metres.

Reduced strata fees

Another advantage may be reduced strata fees. Strata fees are usually worked out proportionally across the scheme based on the floor size of each residence. If you are buying into a strata or community living scheme, always check to see how much strata fees are.

Ask to read the strata financials and management reports to see whether any major maintenance is due; this could result in additional levies later down the track.

Good floorplan

Natural light gives the feeling of space and have a think about storage in the property too. Built-in wardrobes, and creatively placed shelving and other built-in cupboards can give great storage options without reducing the feeling of space.

A logical floorplan is a must; while you may not mind visitors going through your bedroom to use the loo, your tenants might not!

Rental yield

Generally, one-bedroom apartments and studios attract a high amount of rent for the space they occupy, but as highlighted earlier, they are not renowned for offering capital growth as experienced by other sized properties. That said, if the location is right, you may well experience a higher growth than anticipated later down the line!

Think about what your investor goals are – are you buying to get on the property market, do you want to earn an income, do you want a high resale value later down the track? Make sure the property is in keeping with these goals.

Our advice is know your budget and do your research. Talk to financial and real estate specialists so you can make informative decisions and you’re aware of the costs and risks as well as the potential gains.

With over 40 years of real estate experience behind us, we are committed to delivering the best service and achieving the best possible results for our customers. This is why we are one of Newcastle’s longest established property management companies. Give us a call on 02 4954 8833 or pop into our Cardiff office for a chat and let us help you realise your real estate dreams.