For those investors in either the fix and flip and rental property spaces, purchasing a condo as an investment property can be a lucrative way to break into a more expensive market. This is particularly true in areas with a smaller market of traditional houses and a higher volume of apartments and condos.
With lower prices and easier access in some metro areas, a condo seems like a great place to start or expand a portfolio for many investors. However, a smaller size can be limiting. Not all buyers and renters are willing to compromise with a little space, even in spite of other amazing amenities. This can be a turn-off even in places with historically high housing costs, particularly if there are other units available in the area at similar prices with slightly more room.
Staging a smaller home properly can make a huge difference in how it is perceived. These strategies can make your small condo investment look larger for potential renters or buyers, making it easier for you to turn a profit with a higher price tag.
Why Purchase a Smaller Property?
Small condos can be a great investment under the right circumstances, but it’s prudent for investors to know where a smaller property factors in before moving forward. A lower price tag may seem like a stellar way to build a portfolio without the costs of a larger single-family home, but investors need to be aware of the drawbacks.
In many situations, however, purchasing a smaller condo property can be an excellent option. The benefits of buying a smaller investment space for the right investor include:
- Increased opportunity for diversification: For investors who want a large portfolio of either varying property types or to add to a collection of local condos, a smaller and more affordable space can make it easy to expand.
- Opportunities in high cost property market: In cities like San Francisco and Los Angeles, many potential renters and buyers are comfortable living in smaller spaces. In this kind of market, a small space isn’t a significant detriment and there may not be any negative effects to a purchase.
- Reduced costs to renovate: Large homes can be extremely expensive to renovate, especially when they are notably out of date or in need of significant repairs. This is not the case for small condos; not only are repairs generally far more affordable but it is much easier to accurately estimate repair costs in a smaller space.
- Faster timeline to rent or flip: Small spaces usually need far less work. This means you can make renovations on a shorter timeline for an expedited time to market.
For investors who understand the challenges of purchasing a smaller property and find that the benefits outweigh the potential downsides, moving forward with a smaller space can be a great way to get ahead.
Making a Small Space Feel Larger
Buying a small condo can be affordable to finance and renovate, but there’s no way around it: many buyers and renters like spacious homes. However, there are plenty of steps investors can take to make a small space feel light, airy, and open, helping potential homeowners or renters to imagine a comfortable life within.
Stage the Unit
Some investors see staging as a waste of time and money that can stifle the creative vision of a prospective tenant. However, in a small space, furniture can actually be a benefit because it illustrates exactly what will fit.
Many small spaces actually feel bigger with furniture in them, particularly when furniture is chosen thoughtfully. In a small space, creating a larger feeling will generally require thin, streamlined furniture as opposed to something larger or bulkier. In addition to appropriate pieces, consider multi-use furniture, like ottomans and coffee tables with built-in storage or beds with drawers. These kinds of things can show prospective residents how they can best make use of their space, allowing them to see how to maximize every room.
Be sure to keep decor in mind when furnishing; things like floor to ceiling curtains in a sheer white can make ceilings feel higher and rooms feel lighter. Avoid short curtains if at all possible, even on windows that aren’t floor length; long curtains create clean, long line while short curtain can shrink the perceived height of a wall.
Employ rugs, too, to create a clear demarcation between spaces. Many smaller apartments have multi-use rooms, like living rooms that also serve as a dining space. When done wrong, the functions of the space can look uncomfortably cluttered or chaotic. However, making use of rugs can help clarify this. A rug in the living area under the coffee table and another in the dining space can help prospective tenants see two distinct areas rather than a room of muddled clutter.
It’s okay to hang art on the walls, but leave some walls bare, too; blank spaces can imply vastness. On other walls, use mirrors; this allows light to bounce around the room, making it feel bigger.
Don’t be afraid to use multiple lighting sources. One solitary overhead light can shrink a space, while several lighting sources, like spotlighting or floor lamps, can keep create a warm and inviting atmosphere
Choose Light Colors
Dark colors can make a space feel small and cramped, while light colors can do the opposite. In the renovation process, focus on choosing light-colored fixtures in as many places as possible.
How you choose to use these principles will vary based on the space itself, but this can mean putting down light wood, pale tile, or light wood laminate flooring, installing white or gray counters, adding stainless steel appliances, and putting in white or light wood cupboards. Keep bathroom tile white or pale gray and add light accents wherever possible, like white molding and silver drawer pulls.
Add Storage Options
A potential lack of storage can be a significant drawback to smaller spaces. For prospective buyers or renters with many possessions or a love of organization, it’s not uncommon to worry about how everything can be stored.
Instead of leaving buyers or renters to fend for themselves, consider adding in innovative storage options. This can mean putting in shelving on walls, building in kitchen storage options, like slide-out spice racks or hooks on which to hang pans, and ensuring medicine cabinets are large enough to meet needs. Placing shelves around the ceiling isn’t a common housing trend, but it can be very appealing for some tenants. Offering a way to store possessions or create a library without taking up floor space, this can be an innovative way to make use of real estate that normally goes untouched.
The closets can be another great way to implement innovative storage options. Instead of a single hanging bar and some shelving above it, consider using some storage best practices to add a lower hanging bar, pull-out drawers, cubbies, or any other solutions that can take a simple closet and offer something that better suits the storage needs in a small space.
Choose the Right Lighting
Fluorescent lighting may be affordable, but it’s rarely a good choice when renovating a small condo space. Instead, think about the lighting that is right for each space based on comfort and purpose.
First, it’s important to understand the different classifications of lighting. Ambient light refers to the overall lighting in a room, like what is generated by a standard overhead fixture. This light is intended to fill an entire space without being overwhelmingly bright or uncomfortably dim. Accent lighting adds to ambient light and can come in the form of several hanging lights over a kitchen island, sconces on the wall, or floor or table lamps added for decor. Brighter, more direct lighting is often known as task lighting as it is intended to provide ample light for accomplishing specific tasks, like reading. This kind of light is most commonly seen in the kitchen or over a desk.
Light bulbs that produce more lumens are brighter, while those with a lower count are dimmer and warmer. The average light bulb is around 60 watts, or 800 lumens. However, a standard light bulb may not be enough for every room. In general, the recommended lumen count for each room is as follows:
- Kitchens: 5,000 total lumens
- Bathrooms: 4,000 total lumens
- Bedrooms: 2,000 total lumens
- Living rooms: 1,500 lumens
- Dining rooms: 3,000 lumens
- Home offices: 3,000 lumens
Note that this is total lumens, which adds up all lighting fixtures in a room rather than the bulb in a single fixture.
The appearance of a light is measured in Kelvins. Higher Kelvins equates to cooler, bluer light, while lower Kelvins yields warmer, cozier results. A light in the living room around 2700 Kelvins can provide a warm but comfortable glow, while a 5000 Kelvin light is closest to daylight and can provide the best color contrast in a room like the kitchen or bathroom.
Focus on Bathrooms
Even a tiny bathroom can feel large and comfortable with the right approach to furnishings and appliances. However, this means making the right aesthetic decisions.
A bathroom will feel its biggest with natural light. However, this may not be an option with condos that allow minimal opportunities for renovation. Instead, choose light bulbs intended to provide cool, direct light to mimic a feeling as close to daylight as possible.
When designing your bathroom, keep everything as close to the same color as possible. Keep the ceiling the same color as the walls and pick a complementary tile color to minimize the differences between varying surface areas. Use large tiles wherever possible to create the illusion of space and choose appliances that fit logically and without crowding. Consider using a curved shower bar in bathrooms with tubs; this can help residents feel comfortable and not cramped.
Maximize Window Space
Some small condos have floor to ceiling windows, but most will likely have a few smaller windows throughout the unit. When renovation to add bigger windows isn’t an option, think about changing out traditional double-hung windows for casement or awning windows. This can eliminate the clutter than can come from multiple windowpanes, creating a smooth, seamless pane of glass that increase the spacious appearance of a room. Depending on the logistics, this can also increase airflow, making a room more comfortable to live in when the weather is warm. In areas in which opening a window is impractical, switching standard windows for picture windows can have the same effect.
A small condo space isn’t the right choice for every investor, but for those who understand the benefits and limitations, it can be a great way to grow a portfolio and generate revenue. With these tips to make your small condo feel larger for potential renters and buyers, it’s possible to improve your ROI and increase the appeal of your smaller space.