Should I Buy Studio Apartment?

Considering the hefty increase in urbanization and how it is altering the trends of real estate, one of the latest trends that we came across is a major hit of vertical buildings and an increased demand for apartments, particularly studio apartments or flats. The desire of the masses especially youth to live or own studio apartments is based on several factors such as they want not only to avail a modern lifestyle but also wish to avail of many other advantages of studio apartments such as low purchasing costs, high rental rates, low maintenance cost, and price appreciation.

With the launch of many projects such as Nova One Lahore offering lavish and modern studio apartments the demand for studio apartments has significantly increased. But before investing in studio apartments let’s build some background knowledge and evaluate all the pros and cons of investing in studio apartments.

What Makes Up a Studio Apartment:

The layout of every studio apartment may vary but essentially all the studio apartments compromise several core elements such as a bedroom, a living room, a dining area, and a kitchen all in the same room. It is a self-contained living space that is also known as a bachelor apartment or an efficiency apartment.

What Should I Consider Before Buying a Studio Apartment?

It is always better to do some homework before doing any task especially when it’s investing your hard-earned money. So here are a few things that you must consider before buying a studio apartment.

Location:

No matter in what field or property of the real estate you intend to invest in, it is always important to determine the location of the property in which you are going to invest. Make sure to purchase the apartment in a location that provides easy access to all the basic amenities.

Initial Costs:

Initial costs of the apartment may vary from being agreeable with your budget and resources to being so expensive to give you a hard time. Make sure to purchase the apartment that agrees with your affordability and doesn’t leave you totally broke and bankrupt.

Property Management:

You must look if the apartment was recently constructed or furnished before closing the deal as if it were recently built and furnished a little management would be required on your behalf. However, if the apartment seems to be old and weary, you can make a decision according to your priorities and resources by consulting your agent and tenant.

Apartment’s Maintenance:

Before investing in a studio apartment make sure that it has good maintenance such as electrical wiring and fittings and that no repair work is going on in the apartment.

Pros of Buying A Studio Apartment:

Ideal for Young People:

As studio apartments seem to be a cost-efficient approach to a residence, it attracts a huge number of young people; bachelors and students or those with a tight budget. One such example was recently seen with the launch of Nova One Lahore.

Cost Efficient:

Studio Apartments are the most budget-friendly investment option that any investor with a limited budget has got. The prices of studio apartments are lower than 2-3 bedroom apartments or houses and hence these are easy to afford.

Low-Maintenance Cost:

As studio apartments offer you all the residential basics in a single room it as a consequence also requires a little cost for maintenance.

Short Term Lease:

Studio apartments offer short-term leases and hence are one of the best options to avail especially if you are looking to rent a property for a short period of time.

High Rentals:

Studio apartments yield higher profits as compared to other types of apartments because of their higher demand. Hence, you can earn a higher profit margin by earning through studio apartment rentals.

Cons of Investing in Studio Apartments:

Everything comes with both pros and cons and a studio apartment investment also involves several cons. Real estate investments including investing in studio apartments also include several risks which are as follows;

Tenants Take a Lot of Time:

Renting out your house or apartment comes with a lot of issues such as late payments from the tenants. Moreover, you are obliged to maintain the unit and you have to be available to resolve any difficulty or emergency that may emerge.

Non-Liquidity:

Real estate unlike stocks or funds lacks liquidity and cannot give you an instantaneous or spontaneous sale and the studio apartments owners are particularly the victims of this non-liquidity.

Pricing:

The capital growth of studio apartments is very slow and you might have to wait a long time to earn some return profits.

Risks:

Real estate investment in studio apartments involves a lot of risks such as larger down payments and higher interest rates. You must be ready to face these risks along with the uncertainty of receiving payments.

For availing free consultancy services regarding investing in studio apartments or any other real estate property, contact us at Record Marketing.