10 reasons to invest in compact apartments

10 reasons to invest in compact apartments

Investing

It only takes a few trips around the city of São Paulo to see that the real estate market remains buoyant, with a variety of projects under construction. In the eyes, one type stands out: the so-called compact apartments.

To give you an idea, they accounted for 60% of sales and launches in the capital in 2019, according to data from Secovi-SP (Sector Union).

Lifestyle changes and zoning laws help explain this trend, which is expected to continue for years to come. And this can also be a good investment opportunity.

What are compact apartments?

They are apartments that have, on average, less than 45 square meters, usually with one bedroom or Studio type. To make up for the lack of private space, this standard of development has valued common use environments among residents.

How did this trend come about?

Economic factors and new sociocultural patterns help explain this scenario. Since 2015, with the changes made to the São Paulo Master Plan – a set of rules that determines the city’s growth over a period of 20 years, high-rise buildings can only be built in areas close to subway stations or bus terminals.

As a result, land prices in regions with ample public transport offer have inflated the cost of construction. One of the strategies adopted to reduce this impact was to converge on plants with smaller footage.

According to Secovi-SP, the units with only one bedroom were the ones that decreased the most: they went from 55.7 square meters, on average, to 33.2 square meters in 2019.

Today, there is an amendment to the Law on Zoning or Land Use and Occupation that provides for an increase in the limit of these constructions, but the process has been temporarily suspended by the São Paulo Courts since December 2019.

Who is driving this market

Urban mobility and quality of life are two pressing needs for those who live in big cities.

The lifestyle has changed and, with it, new needs arise. This is another factor that explains the high demand for compact apartments.

The convenience they provide has attracted, mainly, four profiles of buyers or tenants: young people who leave their parents’ homes to live close to where they study (universities); young couples without children, who are looking for smaller spaces that are easy to maintain; people who want agility to move to the workplace and prefer regions that offer public transport; and professionals who are consolidating their careers, but have not yet built a family.

10 reasons to invest in small apartments

Practical, well located and with several convenience services. These are some of the advantages that make these ventures valued and also an alternative for those who want to invest.

Here are 10 reasons why a compact apartment is a good deal:

1. Modern buildings

More and more modern and sophisticated, the compact floor plans gain well-resolved architectural projects, which manage to optimize the space and meet the contemporary lifestyle.

2. Infrastructure

In addition to reduced environments, these architectural projects focus on shared service and leisure spaces. All to motivate residents to enjoy more of the apartment’s outdoor areas.

Alle Studios, by Tegra Incorporadora, is an example of this trend. Located in Campo Belo, the development includes Studios measuring 24 and 26 square meters with swimming pool, coworking, fitness, laundry, gourmet rooftop, terrace, barbecue, bicycle rack, among other benefits.

3. Meets a new work reality

Coworkings reached residential condominiums and gained prominence in times of valorization of home office work. The rooms equipped with wi-fi, the coworking space and the commercial rooms are great attractions for those who work remotely or want to establish a business.

Know more:

Advantages of coworking space in residential condominiums

4. Expenses and little maintenance

Expenses with this type of apartment are lower, starting with the IPTU value. And with reduced and planned areas, there is not a large amount of equipment and facilities, which makes maintenance and repairs easier.

Another point is the profile of the residents. As tenants, in most cases, they spend very little time at home, keeping the property in good condition.

5. Alternative to Flats

Studios already furnished have become an alternative to Flats, also known as Apart-hotels.

They attract people who need a home for a short period, such as executives from other cities or states who frequently visit a certain region or even newcomers to the country who need to settle down quickly.

6. Upgrade

The small property is an excellent solution for living in more valued neighborhoods.

7. Valuing mobility

With a lifestyle increasingly guided by time, many people do not want to spend hours in traffic and look for mobility alternatives, such as public transport and bicycle paths. Many condominiums not only have bike racks but also provide bicycles for shared use.

8. Initial investment is lower

If compared to properties with three or more bedrooms, or those that have outdoor areas, compact apartments have a lower value.

Read too:

Is it worth it to buy an apartment directly from the construction company?

9. Return

In the case of lease, it is possible to have greater profitability compared to the standard property, as tenants accept to pay slightly higher rents to have more facilities in their daily lives.

10. Appreciation

Profits can be quite high on properties located in neighborhoods with growth potential that are receiving improvements in infrastructure and transportation, such as subway stations, trains, bus stops, shopping malls and markets. All this adds value to the investment for a possible sale in the future.