Micro-apartments are smaller-than-average studios intended for a single resident. Ultra-efficient design packs a kitchen, bathroom, and other necessities into a unit of 200 to 400 square feet, while high ceilings and large windows create the illusion of large space.
Many micro-unit buildings provide common areas where residents can relax and socialize together. Some are designed for co-living, in which your bedroom is private, but all other amenities are shared with other residents. Thriving communities, appealing amenities, and prime downtown locations balance out micro-apartments’ small size. With the building as their living room and the city as their backyard, residents often only return to their rooms when it’s time to go to sleep.
The intended interest group for miniature lofts is single 20-year-olds with moderately substantial positions in the city. These are the occupants who will exchange a smaller apartment for an energetic, advantageous community, who live alone and haven't yet collected numerous belongings, who can bear the cost of a tolerably high lease, and who spend most of their time at work or outside of the home.
These young renters generally stay for a year or two as they start a new job or move to a new city, then eventually move up to larger units. As you might expect, these micro-units aren’t roomy enough for families or multiple people; however, they’re also too expensive to be used as pied-à-terre units or affordable housing (more on this issue later).
Miniature condos' inhabitants’ rates and cost per square foot beat those of standard units. This is a massive part of the market that is rarely discussed. Notwithstanding, almost 1 of every 4 tenants of regular units express interest in leasing a micro-apartment. They'd trade space for 20-30% less on rent each month, living in an exceptionally attractive area, and the ability to live alone.
82% of current micro-apartment dwellers weren’t intentionally seeking out smaller units. Rather, location was the deciding factor for 97% of these renters, in addition to factors like proximity to work and public transit, neighborhood amenities, the ability to live alone, and price.
In correlation with traditional tenants, they're more excited about their condos' common areas and tend to create a community with others living in neighboring micro-apartments. They reestablish their leases 41% of the time, contrasted to the 57% of ordinary tenants. Individuals who leave do so due to high lease costs and (justifiably) the need for more space. Notwithstanding, 37% of miniature loft inhabitants would consider buying their units given the opportunity.
If micro-apartments are showing up in your city, should you jump at the chance to purchase and rent one out—or does their niche appeal make them too risky an investment?
Public Real Estate Investor accepts that while miniature lodging isn't for everybody, it will possess a steady portion of the rental business, especially in urban communities where a flourishing tech industry is drawing in a Millennial labor force. Existing miniature condos have higher inhabitant rates and rental costs than traditional units, because of the convenience and solitary living. Most micro-apartments get rented out in about two weeks, with multiple applications submitted for each unit. So watch out for the development of miniature apartments in major urban communities like San Francisco, Los Angeles, Seattle, Boston, and New York. While breaking into the industry is difficult, the gains can be major.