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Micro-Apartments the New McMansion?

Are micro-sized housing units taking over as the hottest real estate trend?

7 or 8 years ago it was all about chasing the McMansion, now there appears to be an increasing demand for smaller, more affordable units for singles.

So is the traditional ‘bread & butter’ 3/2 no longer the best acquisition move for real estate investing?

Home builders recently reported a rise in the average square footage of house that they are building. However, New York City’s Mayor Bloomberg just announced a design competition for coming up with plans to build smaller micro-units to satisfy the city’s shortage of affordable units for singles and couples as well as waiving zoning requirements to allow units of just 275 sq. ft. to be built.

Between the new generation of young professionals flocking to cities in search of tech jobs, an increase in divorces with more to come as the economy improves and a trend away from the typical path of monogamy, marriage and kids it is easy to see that smaller units could become increasingly in demand.

This doesn’t mean every real estate investing pro should immediately switch strategies and start buying smaller but it is a reminder to keep on top of trends.

What is important for profitable real estate investing is identifying the largest buyer pool in your market. Flipping these homes means they’ll typically sell faster and for top dollar. Look for property types where there is a shortage whether big or small. Where demand exceeds supply there are big profits to be had.

Then establish yourself as the local expert in that property type. Do this through your branding, marketing messages and how you network. Where do your ideal buyers and sellers hang out and spend their free time? What is most important to them?

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