As the U.S. population grows and space decreases, many property developers are forgoing the skyscraper model and instead choosing smaller options – micro-apartments.
Micro-apartments are beginning to spring up in population-dense cities including Chicago, Boston, San Francisco and New York City. Located in popular, urban neighborhoods in these cities, micro-apartments are great housing options for middle-class, single and younger renters looking to live in the desirable neighborhoods whose housing options may otherwise be unaffordable.
In San Francisco, a 300-square-foot unit can go for $1,600 a month, which is a deal considering the average rent in the city is $2,741.
While property managers may be wary of units going for less money per month, the upside is that micro-apartments allow property managers to offer more total units – at a higher rent per square footage.
As Ashley Halligan, an editor at Software Advice, says, “New York City sets its minimum square footage to 250, and the average square footage of a one-bedroom apartment there is 750. This means you could create three micro-apartments out of one average-sized apartment.” With each unit going for $1,600 a month, micro-apartments can bring in $2,000 more than before.
Property managers need to consider design and construction costs and location before starting a micro-apartment project, but with the right factors, micro-apartments can be a very profitable investment.
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