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How Many Bedrooms Is Best for a Buy-To-Let Apartment?

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    Should Landlords Invest in a Studio, One-Bed or Two-Bed Apartment?

    If you’re looking to step into UK property investment, you may have an idea regarding the types of properties you want to add to your portfolio. However, a recent study from Shawbrook Bank notes that more than a quarter of landlords agree that city centre apartments will continue to be a lucrative investment opportunity throughout 2024.

    But if you focus on city centre apartments, what size property should you choose? Typically, you have a choice of three types of buy-to-rent properties: studios, one-beds and two-beds.

    Which one is right for your property investors investment strategies? Let’s look at each of their benefits in greater detail.

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      What Are the Benefits of Investing in a Studio Apartment?

      Investing in a studio apartment as a landlord offers numerous advantages. The lower purchase price makes it an affordable entry into the property market, and the reduced maintenance costs – fewer square feet than a larger apartment or house – can enhance profitability, ensuring higher returns.

      Studio flats sometimes yield higher rental income percentages due to their lower average property price. These types of properties attract singles and young professionals seeking affordable, convenient living spaces.

      Studio flats in urban areas may experience higher demand and appreciation, particularly in cities like Liverpool, which is popular with young professionals and students the most likely demographic for these apartments.

      In addition, adding a studio apartment to a rental portfolio predominantly made up of houses or larger apartments provides diversification, spreading risk across property types for long-term stability.

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      What Are the Benefits of Investing in a Two-Bed Apartment?

      Investing in a two-bedroom apartment as a landlord offers numerous benefits. Higher rental prices offer increased monthly income potential compared to smaller units.

      This property type attracts a diverse tenant pool, including small families and roommates, leading to stable, longer-term tenancies.

      Like studios and one-beds, two-bedroom apartments may have higher appreciation potential, especially in desirable locales. For instance, the North West is forecasted to enjoy capital growth of 20.2% in the next five years (as per Savills Residential Forecasts), significantly above the national average and more expensive regions like the South East and London.

      The extra space makes them adaptable for remote work, adding to their market appeal. Following the pandemic, people were forced to reconsider what they look for in a property – more space was right at the top of that list. As such, a two-bed apartment may afford them more living space and allow them to live in a desirable location. Considering that many new-build flats are located in areas with plenty of things to do, it is easy to see why people would opt to live in this type of property.

      The potential for roommate arrangements helps these apartments appeal to a broader tenant demographic, especially if they’re looking to split rent and utility costs to save money – this may be more of an issue with one-bed and studio apartments.

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        What Are the Benefits of Investing in a One-Bed Apartment?

        Opting for a one-bedroom apartment as a UK buy-to-let investor presents unique advantages compared to two-bedroom and studio properties.

        Affordability is a key benefit, offering a lower entry cost into the property market than buying a two-bed. Much like a studio, the smaller size reduces maintenance costs, simplifying the property management process for investors.

        One-bedroom apartments appeal to singles and couples, meaning they could appeal to people who would choose a studio or a two-bed, which could mean potentially faster tenant turnover.

        There is also a consistent demand for one-bedroom properties, which could mean a stable rental income.

        Find Out More: For more property investment insights and tips, check out our guide on what to invest in right now.

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          Which Property Type Is Right for Buy-to-Let Investors?

          As you can see, these three property types offer numerous benefits, from lower average property prices to high yield potential. City centre apartments also appeal to different demographics.

          However, there are many more things you need to consider than just apartment size. For example, purchasing properties in high-yielding areas like the North West with strong capital appreciation potential is just as essential to ensure significant returns on your investment.

          Explore the UK property investment landscape in greater detail with our recent buy-to-let area guides:

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          Author

          Dale Barham

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          Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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