The Advantages of Investing in Studios and One-Bedroom Apartments
With space at a premium and pressure on urban space increasing as cities grow and populations burgeon, compact studio and one-bedroom apartments are fast becoming an attractive prospect. First-time buyers and property investors are hoping to acquire a centrally located investment property that harnesses the demand of a wide range of high-quality tenants. It seems young professional couples, singletons, students and those who have relocated to the new city for a job, comprise a decent chunk of this desirable tenant demographic. Â
First and foremost, investing in a smaller footprint, means the cost will be lower. The reality for many investors and those hoping to get onto the property ladder is that the capital they are in a position to draw on is often marginal, which makes studios and one-bedroom apartmentsts a realistic option as a low cost asset in a market that they would otherwise most likely be priced out of. This is especially the case when it comes to larger apartment options, real estate in a main city centre or properties with hot ticket features such as a waterfront location or uninterrupted picture-postcard views.
An attractive example of a unique development that fits this investment property dynamic is The Residences at Central Park. This new build comprises a boutique collection of apartments, whose residential studios start from just $399,000 and one bedroom apartments from $599,000. Another brand new development in Auckland worth noting is the stylish Augustus Park by Safari offering a competitive freehold opportunity with Studio, One Bedroom and One Bedroom plus Study configurations priced at entry level from just $475,000.
Both developments tick the premium location box with Augustus Park set right on the cusp of Auckland’s sought after CBD while capitalising on the boutique charm of one of Auckland’s most sought after residential neighbourhoods, Parnell, not to mention the enviable Double Grammar Zone and being just a hop, skip and jump to Auckland University and the CBD. Similarly, The Residences at Central Park is well-positioned within an established central business district of Auckland, conveniently close to Ellerslie Train Station, the CBD and key entertainment and event spaces.
While the longer-term benefits of capital gain might depend on a number of interwoven factors and even at the best of times when it comes to apartment investing can be tricky to predict or quantify, smaller and more compact apartments tend to be the configuration that have the potential for respectable capital appreciation over the medium to long term.
Moreover, a distinct advantage of investing in studios and compact one-bedroom apartments is that they tend to see a higher rental yield relative to their cost than larger apartment options. This is due to factors such as their smaller, self-contained footprint and their location often being in premium proximity to the city centre, which in turn captures a valuable renters market in the way of young professionals and students. These investment property traits can be seen in the stylish and centrally located The Residences at Central Park, which is a positive cash flow-focused property investment with up to a six percent gross return per annum.
Smaller-scale apartments are also a low-cost asset. They tend to be easier to maintain with less time and expense involved in terms of upkeep and renovation, as well as being cheaper to design and furnish.
With the offer of attractive purchase prices and overall lower costs, combined with high demand from certain tenant groups who are willing to forgo space for inner city living, and potentially high rental yields, studios and one-bedroom apartments are well worth a look-in for those starting out in property investment or looking to build on an existing portfolio, as well as being an attractive and affordable option for first-home buyers.
For more information, contact Safari Group Team:
https://safarigroup.co.nz/contact/
0800 790 790
