Luxury property: micro-apartments as an inexpensive capital investment

The world’s metropolises show how a real estate trend can be used profitably while also creating living space.

The increasing demand for smaller apartments

The housing market in major German cities is tense and living space is scarce. For world metropolises like London, Paris or New York this problem has been present for years, but it is precisely these cities that are already showing how to take advantage of a trend. There is talk of the increasing demand for so-called micro-apartments in areas with a housing shortage. The residential units are usually no larger than 30 square meters and are therefore particularly interesting for single tenants. The increasing number and demand for small apartments is the reaction to the development that the number of one-person households has risen extremely in the last few years, because there are now 16.5 million single households in Germany. That corresponds to more than 40 percent of all households in Germany – and the trend is rising.

The reasons and problems of increasing demand

The number of single-person households is increasing continuously and, at the same time, the demand for small apartments such as micro or student apartments is also increasing. The reason for this is, among other things, the increasing number of students from Germany and abroad, who are often looking for modern, flexible and affordable accommodation. But commuters who are looking for a residential unit close to their place of work during the week, for example, are also driving the numbers up. The biggest problem with this is that the supply on the real estate market has not kept pace with this development, so that there is now an enormous housing shortage in many large cities.

Micro apartments as an investment

Micro apartments not only close a gap in the housing market, they also offer an ideal capital investment for a broad mass of people. Because the small apartments are highly profitable investments, since rental income and returns are much higher than with traditional new apartments. Often whole complete packages are sold, such as professional building and rental management, so that the investor saves the administrative effort. It is precisely this fact that makes micro-real estate particularly interesting for students and busy investors.

A long-term extra income

Micro-real estate often not only involves little administrative effort, but also offers optimal market conditions, because currently the high demand cannot be met with the currently available micro-apartments. And it doesn’t look like a return in the future either. The acquisition and subsequent letting of such a property can mean a long-term and secure additional income for the capital investor. “Acquisition and subletting of micro-apartments show an advantageous risk-opportunity profile. Micro-real estate offers other advantages as well. Professional administrators take care of building and rental management. This saves a lot of work for investors, ”emphasizes Reccius from AG in an official press release.

A crisis-proof system

In addition, micro-apartments are considered a particularly crisis-proof capital investment if you have taken into account important factors such as location, infrastructure and environment when buying. “These features influence rentability and resale value. If the property is in a promising environment, this reduces the purchase risks and makes the purchase so worthwhile for normal earners despite the higher acquisition costs, ”says Reccius. In the big cities in particular, there is a shortage of housing and, at the same time, an increasing demand for small and modern apartments.

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