Why Invest in a Studio apartments

Why Invest in a Studio Apartment? 

Studio apartments are a new and innovative addition to the UK property market. They appeal to a growing number of renters who want a stylish and compact living space in a great location, which makes them an attractive option for investors.

If you’ve been considering investing in studio apartments, you may have a few questions you’d like to find out about before you go forward. If you’re wondering ‘what is a studio flat in the UK?’, ‘what does a studio apartment look like?’, and ‘why should you consider investing in a studio apartment in the UK?’, make sure you read our detailed guide. Keep scrolling to learn more about why you should invest in a studio flat, and how to do so successfully.

Studio Flat Definition – What is a Studio Flat?

What is a Studio Apartment?

So what is a studio flat? Often referred to as an efficiency apartment or bachelor apartment, a studio apartment, by definition, is a self-contained living space where the bedroom, living room, dining area and kitchen are all within the same room. The floorplan of studio flats can differ. For example, some studio apartments contain divider walls which separate the studio bedroom/sleeping area from the rest of the flat to offer some privacy.

 

What is the Difference Between Studio and One Bedroom Apartments?

Once you know the definition of a studio flat, it’s essential to understand the difference between a studio and a flat. The main difference between a studio and flat is the floor plan, with a studio being contained to one space while a one-bedroom apartment is made up of different rooms.

There are no separate rooms in a studio flat, meaning that each of the key living areas of a home, aside from the bathroom, are located within the one space. One corner of the space may be a living area, for instance, while another corner, which would be considered the studio bedroom, contains the bed.

In a one-bedroom apartment, every room in the home is separated by walls, with a separate bedroom, separate bathroom and separate living area. The only exception to this is that sometimes a one-bedroom apartment may not have an entirely separate kitchen, with the kitchen and living area merging into one.

The Benefits of Investing in Studio Apartments

There’s a Growing Demand For Small Studio Apartments

Cities are growing, populations are increasing, and more people are living alone. Because of this, apartment living is on the up and the demand for studio apartments is growing. The number of UK renters is on the rise, with a fifth of UK households now in private rented accommodation, and the top tenant groups renting properties are students and young professionals.

Living in a studio flat in the UK, particularly within the city centre, is the perfect option for young people who have just moved to a new city and want an affordable, comfortable, and well-located place to live. With student tenants in particular, studio flats provide a level of privacy that they might not get from shared student accommodation such as a student house. Research shows that students in the UK are becoming more interested in renting self-contained student accommodation, and studios are the perfect mixture of independent city life and affordability.

Living alone is no longer seen as a curse, and many young professionals embrace having their own space when searching for apartments to rent. For people living solo, studio type apartments and micro-apartments in the UK are far more convenient and comfortable than a larger house.

fabric district residence

Small studio apartments are also perfect for older tenants. A growing number of older people are downsizing into a convenient all in one apartment after selling their family home. Living in a studio flat with an open plan layout can be the perfect residential unit for older people struggling with mobility. They are also far easier to keep clean and tidy, carry out home improvement tasks, and the landlord or property management company is often responsible for maintenance. Many older people are now looking for a studio apartment to rent because of the ease, comfort, and accessibility they provide.

They’re More Affordable and Come With High Yields

Studio apartments are more affordable than one or two-bedroom flats, both for the investor and for the person living in a studio flat in the UK. This is because they’re smaller than most other apartments, with sizes typically ranging from around 400-500 sq ft.

While the purchase costs and rental costs for a studio type apartment may be lower than the average cost of a one-bedroom flat, this doesn’t mean that small studio apartments can’t still generate some attractive rental yields. For those who aren’t familiar with rental yields, they’re a percentage figure which is calculated by taking the purchase price of a property and its rental income. The higher your rental yield, the better the return on investment you can expect. Liverpool’s Fabric District Residence studio apartments are a prime example, offering rental yields of 8%.

Rents in the UK are predicted to rise for the next five years, with a 15% increase in rental income expected. Consequently, investors are seeing growth in both rental rates and capital appreciation, with a growing market for studios.

They’re More Eco-Friendly

One other benefit of investing in a studio apartment, especially in 2020, is the fact that they’re more environmentally friendly than some other property types. There’s a generally smaller size that comes with a studio type apartment, meaning that the flat requires less energy in order to be properly heated or cooled. There’s also no chance of leaving the light on in multiple rooms of the home at once, which saves on electricity usage.

At a time when more and more tenants are classing eco-friendly features as one of their most important rental requirements, offering a property which meets this criteria is a great idea. Not only does investing in an eco-friendly studio flat attract more rental demand, but it will also lower your own carbon footprint in the process!

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What are the Best Locations to Invest in a Studio Apartment?

As cities across the UK grow and expand, city centre land is coming in at a premium. With a historic shortage of housing in the UK, studios are providing a compact solution to the lack of housing available. Small studio apartments typically allow investors to purchase property in popular city-centre locations for a reduced cost, with increasing rental rates too.

Developers are integrating studios into their new developments across the board. The demand for studios is clear, with studios selling out quickly as investors make the most of the opportunity to invest in such thriving locations. It is for this reason that the studio flats Manchester and Liverpool have to offer present a perfect investment opportunity.

In places like Manchester and Liverpool where property prices are rising rapidly, this type of apartment will allow investors to purchase in high-value areas. The choice of studio apartment Liverpool and Manchester offers makes a great option for your next property venture, allowing you to benefit from high returns and increased growth.

Liverpool Studio Apartments

Buying a Liverpool studio flat is a perfect option for investors who want to generate high returns, attract a steady stream of demand, and boost their chances of capital growth. Liverpool city centre is an area that sees a lot of demand from tenants who want to rent a property that’s close to their workplace or university, but who don’t want to spend a fortune to do so. Liverpool rental costs have risen by 2.65 per cent and are expected to continue growing, which is good news for property investors looking to maximise their rental income.

Studio apartments in Liverpool city centre are the ideal solution for cost-conscious tenants as they’re comfortable, affordable, and well located. Average rental yields in Liverpool stand at 5.05 per cent, with some postcodes generating yields as high as 14 per cent. Many parts of Liverpool are also seeing huge growth thanks to regeneration projects throughout the city centre. Therefore, purchasing the residential or student studio flats Liverpool has to offer is a smart investment decision for those focused on capital appreciation as well as rental returns.

Manchester is another top UK investment hotspot and an equally as lucrative city for investing in studio apartments. The studio apartments Manchester has to offer are often based within the city centre due to the demand this area sees. Many young professionals and students seek cheap studio flats in Manchester as they want to live right in the midst of Manchester’s hustle and bustle without forking out massive amounts for rent.

The average rent in Manchester city centre is £1,169 per calendar month, so studio flats in Manchester provide tenants with a cheaper alternative which is often just as appealing as a one or two-bedroom apartment. Manchester has similar rental yields as Liverpool, with a 5.55 per cent average, and boasts house price growth predictions of 22.8 per cent by 2022.

Liverpool City Centre Studio Apartments

Liverpool Studio Apartments

Buying a Liverpool studio flat is a perfect option for investors who want to generate high returns, attract a steady stream of demand, and boost their chances of capital growth. Liverpool city centre is an area that sees a lot of demand from tenants who want to rent a property that’s close to their workplace or university, but who don’t want to spend a fortune to do so. Liverpool rental costs have risen by 2.65 per cent and are expected to continue growing, which is good news for property investors looking to maximise their rental income.

Studio apartments in Liverpool city centre are the ideal solution for cost-conscious tenants as they’re comfortable, affordable, and well located. Average rental yields in Liverpool stand at 5.05 per cent, with some postcodes generating yields as high as 14 per cent. Many parts of Liverpool are also seeing huge growth thanks to regeneration projects throughout the city centre. Therefore, purchasing the residential or student studio flats Liverpool has to offer is a smart investment decision for those focused on capital appreciation as well as rental returns.

Manchester City Centre Studio Apartments

Manchester is another top UK investment hotspot and an equally as lucrative city for investing in studio apartments. The studio apartments Manchester has to offer are often based within the city centre due to the demand this area sees. Many young professionals and students seek cheap studio flats in Manchester as they want to live right in the midst of Manchester’s hustle and bustle without forking out massive amounts for rent.

The average rent in Manchester city centre is £1,169 per calendar month, so studio flats in Manchester provide tenants with a cheaper alternative which is often just as appealing as a one or two-bedroom apartment. Manchester has similar rental yields as Liverpool, with a 5.55 per cent average, and boasts house price growth predictions of 22.8 per cent by 2022.

Should I Buy a Studio Flat?

Is it Worth Buying a Studio Apartment?

If you’re an investor, it’s definitely worth buying a studio apartment. Studio apartments are affordable and able to generate a large return on investment. With so much demand for city-centre apartments, a stylish and modern studio apartment in the city centre offers a desirable investment option which will attract a range of tenants.

A Guide to Buying a Studio Apartment - Things You Need to Know

When buying a studio apartment as an investment, there are many things you should look for before you go ahead with the purchase. Here are five steps that you should keep in mind before investing in a studio apartment.

What is a studio flat? What is a studio room plan like? And why invest in a studio apartment when you could buy a one or two-bedroom flat? If you don’t understand all of the basics on studio apartments, you’re limiting your success. Before you think about buying a studio flat, make sure you know everything there is to know about investing in a studio flat, meaning what studios look like, what makes them different from an apartment, and their benefits.

Make sure you’re looking to invest in a studio apartment in a desirable location, such as within the city centre if you want to attract a young professional or student crowd. Ensure that you’re also able to generate a high level of capital growth from your studio apartment, meaning that the area you invest in is known to have a strong property market with predictions for house price growth.

When searching for the perfect studio apartment, you need to pay attention to the space itself and make sure it’s well-designed, not too cramped, and practical. So what is a studio room supposed to look like exactly? Some of the main things you should pay attention to are space and layout. While a studio apartment meaning defines it as a smaller space than a one or two-bedroom flat, this doesn’t mean that a studio flat shouldn’t still offer a comfortable living experience.

Think about whether you would be happy to live in the studio flat you’re considering buying. If you wouldn’t, due to the space being too cramped, what makes you think your tenant would? You should also make sure that the design and decor of the property are up to a high standard, as this will attract more tenant interest and also mean you won’t have to worry about refurbishments. When targeting specific tenant groups like students, it’s also a good idea to think about looking for studio flats with features such as a dedicated study area.

With every buy to let investment, it’s crucial to think about your potential returns before purchasing the property. Don’t forget to factor this into your investment process when buying a studio flat. If you’re wondering ‘what is a studio apartment rental return supposed to be?’, the ideal yield ranges from around 5 per cent to 10 per cent or higher in certain areas. Investing in a studio flat in a city like Liverpool is a good idea due to the high yields and strong capital growth on offer. This figure may be included within the property listing, or you might need to work out the rental yields yourself.

If a studio apartment doesn’t offer high enough yields or capital growth predictions to generate strong returns, it’s a good idea to continue your property search until you find a studio flat investment that ticks all the boxes.

1. Understand the Basics

What is a studio flat? What is a studio room plan like? And why invest in a studio apartment when you could buy a one or two-bedroom flat? If you don’t understand all of the basics on studio apartments, you’re limiting your success. Before you think about buying a studio flat, make sure you know everything there is to know about investing in a studio flat, meaning what studios look like, what makes them different from an apartment, and their benefits.

2. Search for Studios in the Best Locations

Make sure you’re looking to invest in a studio apartment in a desirable location, such as within the city centre if you want to attract a young professional or student crowd. Ensure that you’re also able to generate a high level of capital growth from your studio apartment, meaning that the area you invest in is known to have a strong property market with predictions for house price growth.

3. Select the Right Studio Flat

When searching for the perfect studio apartment, you need to pay attention to the space itself and make sure it’s well-designed, not too cramped, and practical. So what is a studio room supposed to look like exactly? Some of the main things you should pay attention to are space and layout. While a studio apartment meaning defines it as a smaller space than a one or two-bedroom flat, this doesn’t mean that a studio flat shouldn’t still offer a comfortable living experience.

Think about whether you would be happy to live in the studio flat you’re considering buying. If you wouldn’t, due to the space being too cramped, what makes you think your tenant would? You should also make sure that the design and decor of the property are up to a high standard, as this will attract more tenant interest and also mean you won’t have to worry about refurbishments. When targeting specific tenant groups like students, it’s also a good idea to think about looking for studio flats with features such as a dedicated study area.

4. Think About Your Returns

With every buy to let investment, it’s crucial to think about your potential returns before purchasing the property. Don’t forget to factor this into your investment process when buying a studio flat. If you’re wondering ‘what is a studio apartment rental return supposed to be?’, the ideal yield ranges from around 5 per cent to 10 per cent or higher in certain areas. Investing in a studio flat in a city like Liverpool is a good idea due to the high yields and strong capital growth on offer. This figure may be included within the property listing, or you might need to work out the rental yields yourself.

If a studio apartment doesn’t offer high enough yields or capital growth predictions to generate strong returns, it’s a good idea to continue your property search until you find a studio flat investment that ticks all the boxes.

Make Your First Studio Property Investment With RWinvest

Now is the perfect time to invest in studios. With such huge demand for these streamlined, compact living spaces along with higher affordability, studio apartments are perfect for a first-time investment. These low-cost, easy to manage spaces are a reliable way to start out in property investment. With fantastic city-centre locations, high-end designs, and proven appeal, studio apartments are an ideal investment opportunity.

Now that you know the answer to what is a studio flat in the UK and the definition of a studio apartment, you’re hopefully a lot more informed on the potential behind investing in studio apartments. If you’re still seeking information about studio apartments or you’re interested in taking the next step to invest in a studio flat, be sure to contact us and we can help you find the perfect opportunity. Or, to find out more about buy to let investment as a whole, take a look at our buy to let investing guide containing some helpful tips and advice, and our buy to let news section with lots of related articles.

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