Thursday, April 21, 2011

One or Two Bedrooms?

I am often asked by potential property investors is it better, all things being equal, to purchase a one bedroom or two bedroom apartment? There is no absolute answer to this, but my preference is for two bedroom apartments.

The main reason is that there are more likely buyers for two bedroom apartments. A one bedroom apartment is good for a divorced father, a widow, a rich foreign student or a lonely yuppie. A two bedroom apartment is better for a newly married couple, a young family, a divorced mother with children or a retired couple.

When it comes to renting, a good two bedroom apartment often rents faster. One reason is that if the apartment is well designed, it rents to single younger people who share.

Consider the maths. A one bedroom apartment rents for $400. In the same complex, a two bedroom two bathroom apartment rents for $520. So if two people share the rent, they only pay $260 each.

It is important to focus on a good layout for a two bedroom.
  • It should have two bathrooms. If it only has one bathroom, it is not so good to share. Often, a two bed one bath apartment is really a one bed plus study apartment.
  • The second bedroom should be near the bathroom. It is not good if you have to walk through the living room to get to the bathroom.
  • The bedrooms should be separated and have privacy.
  • Both bedrooms should have external windows. A window onto a hallway does not count.
  • Ideally, both bedrooms should be a reasonable size. Anything less than 3.2m x 3.1m for a bedroom (not including the wardrobe) is too small in my view. It is best if the smallest room is no less than 3.4m x 3.2 m. The main bedroom should have a wall that is at least 4m.
  • There should be room for a desk in both bedrooms.
Also, some one bedrooms are left-overs -- an apartment that could have been a two bedroom apartment, except that the developer need room for a lift or fire escape, so the second bedroom disappeared.

Below is an example of a good two bedroom design. The apartment is 92 sqm internal, plus balcony. Both bedrooms are more than 12 sqm each.
Here is an example of a bad two bedroom design. Although the bedrooms are separated, look where the second bathroom is located.

Additionally, on a price per sqm basis, a one bedroom apartment is often more expensive than a two bedroom apartment in the same complex. That premium is not worth it.

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