Studios & one beddas...

Hi afolks,

I'm just a newbie to the property game.

I hav'nt got too much a deposit saved up and was wondering if anyone here have considered investing in a serviecd apartment/studio or a one bedda? If so, it would be great if you can share your experiences with this type of investment?

They are less capital restrictive, seems to yield a higher rental return, and the tenant covers most of the outgoings? too good to be true? I guess the downside is that you wont be getting much capital growth.

If its under 50 square meters you will struggle to get finance regardless of whether its a stand alone one bedda or serviced apartment. Better off looking at large one beddas or small two bedroom properties in less desirable locations to start out with.

Alternatively, focus on building that deposit base.

As said, you may struggle with finance.

Also, one day you will want to sell. Yes, I know many people buy with the INTENTION of holding for decades, but life has a funny way of upsetting the best-laid plans.

A studio or one-bedder won't appeal to many buyers. You are basically restricted to investors. And if you have to sell with any urgency, you will be at the mercy of skilled buyers.

When buying IPs we always keep one eye firmly on the resale potential.
Many threads on serviced apartments on SS arguing pros and cons.

The reality is that you may need more than 20% deposit, because of the use of the property (ie serviced apartment) and the banks' policies towards these, which may mean you still do not have enough for a deposit.

My simple answer is there are better options for both yield and capital growth