Why Invest in a 2-Bed Apartment?

The apartment size will affect the investor’s ROI, meaning it is typically more lucrative to invest in a 2-bed rather than buy a studio apartment or a 1-bed.

One of the factors determining this profitability is rental income. Higher rents can be earned from a 2-bed apartment than a smaller one. For example, home.co.uk states that the average rent for a 1-bed property in Liverpool is £815, while the average monthly rent for a 2-bed property is £1,104. This typically means a higher monthly income for the investor.

When you compare the property price with the earning potential, 2-beds are the best type of property to invest in for rental yields in many cases. For example, luxury 2-bed apartments in the upcoming Mercantile development in Liverpool offer 6% assured net rental returns. Some 2-bed units can offer a net rental income of £17,097; if you compare this to the possible income for a 1-bed of £11,907, it’s clear that there are significant differences in rental income depending on the number of bedrooms in the property.

1-bed flats and studio apartments are popular with single young professionals and students or graduates. This type of residence suits their lifestyle and is seen as a more flexible, shorter-term residence. Of course, the tenant may stay in the apartment for years, but in the long term, they may be looking towards getting a larger apartment with more space or moving in with a partner.

So, while 1-beds are great investments for targeting the young professional demographic, 2-bed tenancies may be longer-term and more stable as they are considered a place to settle down with a partner or family or a symbol of finally having enough success to secure a larger, long-term residence.

Targeting these demographics may lead to longer tenancies and fewer void periods.