Article | Intelligent Investment
What type of apartment to buy for rental purposes?
Besides buying shares, investing in an apartment to rent out is a frequently chosen alternative to the barely yielding savings account. An investment that can certainly yield more, but which also involves a lot more. That location is crucial, you probably already figured out. But did you know that bigger does not always guarantee more?
April 11, 2023
Smaller is more profitableA smaller apartment will fetch more than a more spacious property. You need to purchase fewer square meters, but the rent you can charge is often close to that of a larger space. For example, the rent of a 100m², two-bedroom apartment is barely more than that of a similar 90m² apartment. In some districts, the rent of a studio apartment comes close to that of a one-bedroom apartment. The studio will need less investment from our side, while giving you more chances to rent it out.
Would you prefer stable tenants?Smaller areas change tenants more often than more spacious apartments. Tenants of studio apartments will therefore generally keep their lease for less time than those who rent a three-bedroom apartment. But that is not necessarily a disadvantage if you prefer a dynamic management of your property. Nevertheless, a larger area does not always guarantee a stable tenant. For instance, it is increasingly common for friends or colleagues to rent a larger apartment together and share the monthly costs. In doing so, each tenant pays for the occupied room. Students and young workers like to opt for this formula. As a property owner, this allows you to charge a higher rent than a family would be willing to pay.
Location is everythingWithout a doubt, you also know the so-called three most important criteria when choosing a property: location, location, location. The better the location, the more valuable and sought-after your property will be. Ultimately, it comes down to attracting as many potential tenants as possible. Also think about the rental audience you want. If you are aiming for young workers, you need to opt for premises in an area with a lot of commercial and professional activity. If you prefer to attract students, then a flat or studio apartment near universities and schools is the way to go.
Know your own profileEach apartment is rentable. Every location has its target group. Above all, determine your own investor profile before investing in this type of property. And if you have any questions about residential investments in Belgium, our Residential Investment Properties experts are at your disposal.
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