...The Case for Fewer, Better Spaces in Your Investment Property
When it comes to investment properties, one common assumption is that more rooms equate to more rent. It seems logical: the more tenants you can fit into a property, the higher the rental income. However, this isn't always the case. In fact, reducing the number of rooms and focusing on creating more spacious, comfortable living areas can significantly improve your return on investment (ROI).
Here’s why fewer, larger rooms can often be more profitable than cramming as many small rooms as possible into your property - squished sardines not welcomed! ...
Less Cramped Communal Space = Happier, More Sociable Tenants
In properties with multiple tenants, the quality and size of communal spaces are crucial. Tenants need areas where they can relax, cook, and be a social butterfly without feeling cramped. When you reduce the number of rooms, you can allocate more space to communal areas like living rooms, kitchens, or shared dining spaces.
A well-designed, spacious communal area can lead to happier tenants who are more likely to stay longer, reducing tenant turnover and the associated costs - winning! Happy tenants are also more likely to take care of the property and may even recommend it to others, helping you maintain high occupancy rates.
tml top tip - don't forget the triangle rule we so often bang on about when it comes to appliance placements! Head to our Instagram post here to find out what that is.
Larger Bedrooms Improve Tenant Wellbeing
Tenants typically spend the majority of their time in their own rooms. By reducing the number of rooms, you can create larger, more comfortable bedroom spaces that cater to their needs. A larger room allows for better layouts, more natural light, and the opportunity to add features that enhance the tenant's experience, such as a seating area or a workspace - an ever increasing essential due to more flexible working locations in jobs these days.
Improving the quality of their own space can have a significant impact on tenant wellbeing. When tenants feel comfortable and content in their living environment, they’re more likely to renew their leases, providing you with a stable, long-term income stream.
Space for More Ensuite Rooms – A Must for Professionals
One of the most attractive features for professional tenants is the availability of ensuite bathrooms. In shared accommodation, having a private bathroom is a major selling point that can command higher rent.
By reducing the number of rooms, you can create more space for ensuite bathrooms, making your property more appealing to a professional demographic. Professionals are usually willing to pay a premium for the convenience and privacy of an ensuite, which can significantly boost your rental income.
tml top tip - if you're struggling for space in a HMO room, choosing a corner layout with an angled door for an ensuite is a layout that utilises space best, it's not all squares and rectangles!
More Scope for Creativity
Fewer rooms mean more space to be creative with your property’s design. You have the opportunity to create unique, attractive spaces that stand out in the rental market. Whether it’s incorporating built-in storage solutions, adding high-end finishes, or designing multi-functional areas, creativity in your property’s design can enhance its appeal and justify higher rents than your local competitors.
Additionally, a well-designed property that stands out can lead to quicker rentals (i.e. shorter vacancy periods), which positively impacts your overall ROI.
Small Rooms Can Be Problematic
Small rooms often come with a host of challenges. Standard furniture may not fit properly, leading to awkward layouts or the need for custom-built furniture, which can be expensive. Built-in elements like wardrobes, desks, or shelving units can quickly add to your renovation costs, eating into your profits.
Moreover, small rooms can feel cramped and uncomfortable, which may deter potential tenants.
If the room feels too small or poorly designed, it will usually be the last to rent, leaving you with vacant spaces that generate no income - a situation to avoid like the plague!
People May Not Want to Rent Small Rooms at All
In today’s rental market, many tenants are looking for more than just a place to sleep. They want a comfortable, spacious environment where they can live, work, and relax. Small, cramped rooms are often a turn-off for prospective renters, especially professionals who value their living space.
If your property is filled with small rooms, you may struggle to attract tenants, but particularly those who are willing to pay higher rents. Empty rooms mean lost income, and if your property develops a reputation for being cramped and uncomfortable, it could be harder to rent out in the future, further impacting your ROI.
tml top tip - don't forget to do your competitor research to look at room rates, sizes and finish to ensure you are offering a superior property. Struggling with how exactly to do this? Download our 'Find my Target Market : Research Guide'.
While it might seem counterintuitive, reducing the number of rooms in your investment property can often lead to higher rental income and a better return on investment. By focusing on creating larger, more comfortable spaces with well-designed communal areas and ensuite bathrooms, you can attract and retain quality tenants who are willing to pay a premium for a better living experience.
In the end, it’s not just about how many tenants you can fit into a property, but how well you can meet their needs and enhance their living experience. Fewer, better rooms can lead to happier tenants, higher rents, and a more successful investment property.
