New York Mayor Michael Bloomberg has asked real estate developers to create “tiny apartments” of about 300 square feet each in order to meet the housing needs in New York.
If you’re in the corporate housing business, you may be wondering if a tiny apartment would be a good investment for you.
I asked the co-founder of CHBO to weigh in on this hot topic. Here’s what she had to say:
“The first condo I ever bought was only 400 square feet – a tiny apartment in San Francisco! I think these properties offer wonderful opportunities for individuals who want to live in a highly populated area. First of all, when I bought my tiny apartment, I was just out of college and the condo was at a price point I could afford. At the time I got a FHA first-time homebuyer’s loan and later turned the property into a fantastic, well cash-flowing rental. The tiny apartment had everything someone would need when working away from home for a month or two at a time – it had a closet, washer dryer, and functioning kitchen. I even installed a murphybed wall unit with built-in desk and had a love seat and kitchen counter with stools. Everything I needed was there.
“The rest of the world has much smaller living spaces than in the U.S. and let’s face it when you live in a major city the most fun is not found at home – more and more we are turning into a 24-7 social society. My opinion is if a condo building has a nice common area with big screen TV, isn’t that more fun to do with your neighbors than watching TV alone anyways? During my trip to Paris recently, I noticed very few stores selling big items – I figured it was because there were no large cars to transport these items. This is how the rest of the world lives – there’s no need for McMansions if it’s just one person (or even a couple) needing to buy or rent a living space.”
Overall, tiny apartments can make great corporate rental properties because:
- They can be bought at a low price point and cost less to maintain, enabling an investor to earn better returns from the property.
- They provide all the amenities of a typical rental property and make the perfect furnished rentals – no need to have your tenants haul furniture in and out of these tiny abodes!
- They enable more people to live and rent in thriving cities vs. sprawling suburbs, which can cut back on commute costs and add to the excitement of a business trip to the heart of New York City!
With a low price point and a high potential for renters, tiny apartments may just be the next exciting thing in corporate housing!