When you start shopping for an investment property, there are several choices you’ll have to make. Should you buy a condo, single-family home or duplex? Free-hold or condo corporation? And perhaps the biggest question of all, how many bedrooms will offer the best opportunity for profit? With homes of all sizes hitting the market, both pre-construction and already built, it can be difficult to know which one is sure to bring the most profit potential and biggest return on your investment.
Positives to units of any size
There are positives to all sizes of homes when it comes to deciding which one is the best investment opportunity.
At AllinRealty, we help investor-buyers in Burlington, Oakville and area find the right units for their purposes. We help find the best units in the top developments and gain access to early, pre-construciton pricing and selection. Invest in real estate, and do it wisely with us!
3+ Bedrooms – This home size is well suited for families of many sizes thanks to the number of rooms that can be adapted to fit whatever configuration they need. Growing families are often looking for homes that they can live in for a long time, and that will be able to house them as their dynamic changes over the years. Homes with 3 or more bedrooms are often duplexes and single-family homes, so investing in a neighbourhood with good amenities can help maintain and increase the return on your investment.
2 Bedrooms – This size of home is often more affordable for renters than something larger, making it a great size to invest in. Two-bedroom units are common in many home styles so can appeal to a wide variety of prospective renters, and they often don’t require as big of an initial investment as a larger home.
1 Bedroom – These small units present the greatest opportunity for profits in today’s real estate market. By choosing the smallest square footage available, an investor is most likely to see the greatest return on their initial investment.
A small, 1 bedroom unit is often the best option
Although your goals may lead you to choosing a larger home as an investment property, there are many reasons why choosing a smaller space might be more beneficial.
Easier to rent
Especially in the GTA, there are countless professionals, couples and small families looking for small units to call home. A one-bedroom unit is more likely to appeal to a wider variety of family styles.
Lower upfront cost
When buying a property, especially a pre-construction unit, pricing is determined by the square footage. Because of this, small units obviously come with a lower upfront cost.
Better return for your investment
Although purchase price is determined by square footage, the same isn’t true when you put it on the rental market. Rental prices are usually classified by number of bedrooms and bathrooms as well as current market pricing, so a lower initial purchase price will often equate to a higher opportunity for profits from a rental agreement.
Great size for many people
A one-bedroom unit is the perfect size for many renters in the GTA. Smaller homes can appeal to young couples, professionals, retirees looking to downsize, new families and single renters, making their customer base quite large.
Better opportunity for appreciation
When it comes time to sell your investment unit, there is always a maximum amount that a buyer will be willing to pay for a given unit size or type. Buying the smallest, cheapest unit available will offer the most opportunity for appreciation over time.
Lower property tax
Property tax rates are in part determined by the size of the property, so a smaller unit is going to have a lower property tax as a result.
Location is key
When it comes to choosing the right investment property for your needs its location will play a significant role in your ability to rent it or flip it. Tenants will be looking at your unit’s proximity to good schools, quality amenities, adequate green space and transit options like GO stations and 400-series highways. Choosing a good neighbourhood to invest in by buying real estate can help ensure that your investment is a solid one.
Real estate investing is wise as part of your portfolio
At the end of the day, the current real estate market is hot and it’s projected to be so for years to come. So, whether you are looking at a small one bedroom or studio, a 3-bedroom condo, or a larger duplex or single-family home, you are sure to benefit from your investment.