Compact living: Why apartments are a lucrative investment

Apartment-living is on the rise in most countries across Europe, with 66 per cent of Spain’s population residing in apartments, while the Eurozone holds an average of 48 per cent. Surprisingly, the UK only has 14 per cent of residents who prefer apartments, although this is set to rise with apartment developments popping up across the country in order to meet the demand for the lack of housing supply.

This rise in apartments has turned the heads of investors who are interested in boosting their buy to let portfolio. As apartments not only diversify their investment collection but can also offer the following advantages that will enable success in the real estate sector.

Growing demand

Despite the low percentage associated with apartment dwellers, there has actually been a significant increase in the number of people looking to rent apartments, as they are a much more affordable option than a house. City-centre apartments are especially popular with young professionals who are straight out of university or are looking to progress their career, as central areas are where the best job opportunities lie.

Studio apartments cater to individuals who wish to live in prime locations without expensive price tags, which includes professionals as well as students. The latter are stepping away from dingy digs and looking towards sleek apartments that are in walking distance of their chosen university. Investors who purchase studios can expect to receive a significant amount of interest from the above demographics, enabling them to generate massive profits.

Rental returns

One of the biggest advantages of investing in apartments is the regular rental income, which can be fixed according to the amenities offered. Property professionals RW Invest advise investors to look into luxury student properties with lavish amenities such as rooftop terraces, gym facilities, entertainment rooms and more, as they can offer higher than average returns. 

You could also consider boosting your returns with an average apartment, although this may be costly to add luxury facilities, it will definitely be worth it in the long run. This will also massively increase demand, as students and professionals now prefer high-quality over basic properties.

Reduced outgoings

The great thing about investing in a buy to let apartment is that it is much more affordable than renting out a home. This is because spaces are much smaller, and apartments are modern which means there is little do in terms of renovation and maintenance.

With an apartment, you will also spend much less on heating the property, as there is less room to eat, which saves both you and your tenants. This is also a more eco-friendly investment, as contemporary apartments are more energy efficient with fixtures such as high-quality insulation and smart lighting which will help to reduce your carbon footprint, and again, reduce your outgoings.

Capital growth

Another financial gain is in the form of capital appreciation, which is a long-term benefit which means your property will increase in value over time. This is ideal if you decide to sell the property in the future, as you can sell it on for a lot more than the original purchase price.

The longer you own the apartment the better, as the price of a residential property tends to increase every year at a steady rate. It should also rise significantly, as more and more people will be interested in buying apartments in the future.