Small apartments as investments: yield with limits
Small apartments are in high demand, but they also carry higher operating risk. Yield depends on cost per square metre, not only on the rent.
01
Demand is not a guarantee
A small apartment in a central location lets quickly. That does not make it a good investment. Purchase price, service charges and renovation cost can erase the yield.
Demand is useful when it is stable. Areas with seasonal interest or an oversupply of small units can look dynamic and carry greater volatility.
02
Renovation and maintenance cost
In small spaces, every mistake shows. Kitchen, bathroom, windows and storage shape the tenant experience. A cheap renovation can reduce the rent or increase repairs.
Cost per square metre is often higher in small properties, because core installations do not shrink proportionally. The calculation must use real quotes, not averages.
“A good yield is not the highest rent. It is the most stable net income.”
03
Liquidity and exit
Ease of resale is part of the return. A property that is easy to buy and hard to sell carries hidden risk. Size, condition and location shape the pool of buyers.
An investor should know who will buy before buying. If the answer is anyone who pays the most, the strategy is weak.
04
Which sizes and which areas
35 to 55 square metres often balance demand and functionality. Below that, the space becomes more sensitive to tenant needs. Above that, yield per square metre can fall.
The area is not selected on average price alone. It is selected on tenant profile, access and the durability of demand.
This article is general information and does not constitute legal, tax or investment advice.
The Journal
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The Journal
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