Real estate investment is not always easy, especially when trying to make the most profitable choices. Are you hesitating between buying a one-room, two-room, or even three-room apartment to rent out? Struggling to identify the best real estate investment for your situation? In this article, we’ll provide you with some tips to better manage your project and adopt the most relevant strategy based on your circumstances.
The best real estate investment is the one that matches your budget!
Before deciding whether to purchase a studio, a two-room, or a three-room property to rent out, you need to start by establishing your budget. Let’s not forget: the primary component of a successful investment is financial control!
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Of course, you can buy a larger space by choosing the suburbs over the city center. But beyond size and property type, your priority should be finding a sufficiently profitable project. It’s okay to make a small monthly effort to repay a loan, but it shouldn’t jeopardize your comfort.
1, 2, or 3 rooms: Choose your investment type based on location
In the heart of a student district in central Luxembourg City, a studio is one of the best real estate investments. You’ll easily find tenants, allowing you to generate income without stress.
In contrast, in more peripheral or even rural areas, smaller properties are less popular. Therefore, if you’re looking to buy outside the most central neighborhoods, it’s better to target two- or three-room apartments or even family homes.
Advantages and disadvantages of investing in a studio, two-room, or three-room apartment
Beyond budget and location, discover the main benefits—and limitations—of these three property types, which are the most common for investment.
Studios: Quick profitability!
In large cities, there is strong rental demand for studios and one-bedroom apartments. Finding a tenant is straightforward, and if one leaves, you’ll have no trouble replacing them.
Rents per square meter are higher for studios than for larger apartments. You can even rent to students during the school year and to vacationers in the summer, earning even more and accelerating profitability.
However, keep in mind that investing in a studio requires more time, as tenants typically stay for only a few months or, at best, a few years. If you’re not available to manage the property, consider entrusting it to a real estate agency.
Two-room apartments: A good compromise
Slightly cheaper per square meter than a studio, a two-room apartment offers better stability. This type of property attracts not only students but also young professionals and childless couples.
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Nevertheless, turnover is still an issue for two-room apartments, as younger tenants tend to move more frequently than families or older individuals. Beyond the time needed to manage tenant changes, this may also require you to perform more minor repairs to address tenant-caused damages.
Three-room apartments: A long-term investment
A three-room apartment may be the best real estate investment if you have strong purchasing power and aim for a long-term strategy. Since the purchase price is higher than for smaller properties, it will take more time to make the investment profitable.
However, three-room apartments, sought after by families with at least one child, offer significant stability with fewer tenant changes. Additionally, larger properties often have proportionally lower costs (condo fees, local taxes, etc.).
While it’s impossible to identify a one-size-fits-all “best” real estate investment, this information should help you make an informed decision based on your situation. For even greater success, don’t hesitate to seek advice from a real estate professional who can identify the most suitable properties for your specific case.
