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Property Management – Northridge – Why Property Owners May Want to Consider Micro-Apartments

NORTHRIDGE PROPERTY MANAGEMENT

Why Property Owners May Want to Consider Micro-Apartments

For the longest time, property developers have had a “the sky’s the limit” mentality when it comes to building new rental properties to keep up with America’s rapidly increasing population. That mindset is beginning to change now with the emergence of micro-apartments.

Micro-apartments are typically located in highly-desired, urban centers in population-dense cities like San Francisco, NYC and Seattle – and come with lower-than-average price tags. For these two reasons, the target audience for micro-apartments tends to be middle-class, single and younger renters.

Advantages For Property Managers
One benefit of micro-apartments is that they allow property managers to offer more total units. In New York City, a micro-apartment can be as small as 250 square feet. If you converted an average 750 square foot, one-bedroom apartment, you would end up with a total of three separate apartments.

As Ashley Halligan, an editor at Software Advice, explained, “These units will command lower than average rent, but of course you now have more units. For example, 300-square-foot units offered by Smartspace in San Francisco are going for $1,600 a month. While still pricey, this is considered a bargain in the city, where the average rent was $2,741 in Q4 2012.”

As these examples show, a property owner with three micro-apartments will collect $4,800 a month in rent – $2,000 more than a single, one-bedroom apartment.

Additionally, nearly any building can be transformed into micro-apartment communities. In Chicago, developers have been successfully converting foreclosed flophouses into micro-apartments, and recently, a historic building in Providence, Rhode Island that was included on the Providence Preservation Society’s “10 Most Endangered Buildings” list was remodeled to house 48 micro-apartments.

Factors To Keep In Mind
While micro-apartments can bring in more revenue, getting to that point can be a challenge. Whether you’re remodeling traditional apartments or a different kind of building, construction costs can start piling up quickly, and smart design is necessary to make these small living spaces functional – but the return can be quite profitable.

Additionally, you need to be certain you have time to manage micro-apartments as more units means more tenants, who will require more administrative attention and maintenance duties. Also, micro-apartments’ success depends upon location, so unless your building is in a sought-after, urban neighborhood, you may have difficulty attracting your target tenants.

Posted by Holly Aker in Business

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