Should I Invest In A Studio Apartment?
Studio apartments are gaining popularity in the UK property market, but is this the right kind of investment for you? Read the infographic below to understand more about studio apartment property investment.
1) Budget & Cost
Lower cost and low/no* stamp duty required
Usually studio flats are of a smaller size and so a lower price than one bedroom and two bedroom apartments.
Suitable for first time buyers / investors who want to expand their investment portfolio
With lower cost and thus lower / no stamp duty, studio apartments are a good investment choice for new investors who want to expand their investment portfolio. Studio apartments appeal to tenants, as the lower cost than a one bedroom provides them with the choice of staying in the city centre without paying as much.
*For the first property that priced below £125,000
2) Location is the key
While location is one of the most important aspects of an income generating property investment, it is even more important in the case of studio apartments investment.
Studio apartments tenants are mostly younger people who value privacy and commuting more than space. A modern studio apartment close to their school/workplace will guarantee a great supply of tenants.
I want my tenants to be young professional… Then you should purchase a development close to a business hub and/or city centre.
I want my tenants to be students… Then you should purchase a development with easy assess to universities/colleges.
3) Rental Growth
With an increasing number of young professionals and international students demanding apartments with a high quality finish, the popularity of studio apartments among tenants are undeniable.
Studio apartments usually result in lower maintenance costs and a higher supply of potential tenants. The rental growth of studio flats in most cases generates a higher yield (around 1% – 1.5%) than their one and two bed counterparts.
4) Capital Gain
Studio apartments are suitable for long term investment. The capital growth of studio apartments in the short term is not as profitable as it is for bigger apartments. Still, the location is the most important factor for a development’s capital growth. Choosing the right location to invest in a studio apartment can let you to enjoy both high rental and capital yields.
5) So…why studio?
- Lower cost
- Higher rental yield
- More popular among tenant