When buying an apartment, one of the biggest decisions is whether to choose one bedroom or two. Do you go for the option that allows you a bit of wiggle room financially, or do you stretch your finances a little for more space and, presumably, a better return in the future?
It’s a tough decision, and one that only you can make, but let’s see if we can clarify the situation and make the decision a bit easier.
Any apartment, one bedroom, two, or a penthouse, will only be a success if it is in a good location. The ideal, from a lifestyle point of view, and also when looking at rental return or resale, is within 10 kilometres of the CBD, close to transport, cafes, shopping and amenities, and close to parks or green space. A one-bedroom apartment in a location like this is quite likely to outperform a two-bedroom apartment in a less desirable area.
The ideal apartment of any size has lots of natural light and pleasant views. If buying off the plan, best to opt for one where the main windows, or balcony with glass doors, face north. A flowing floorplan with the living area opening to a balcony is ideal. The balcony will give you a feeling of space as well as add to the pleasure of living there. The more storage the better, and a storage cage in the basement is great for sports gear and little-used items. A Euro laundry and a carpark are also desirable.
A quality apartment will always outperform a cheap build. If possible, try to visit or find out about previous builds by the same developer. When looking at the display suite, ask about the finishes, kitchen appliances, and bathroom fixtures.
Consider your lifestyle. If you are not one for collecting a lot of stuff – have a fairly minimalist approach to life – then you probably don’t need the extra territory. Do you spend a lot of time at home, or are you out most nights? Do you often have friends and family to stay? If so, would a sofa bed be just as good as a spare room?
Technology is your friend – it reduces your need for space and allows you to decorate in a super-stylish minimalist way. Our books are on electronic readers, we no longer have bulky stereos and racks of CDs, and DVD storage is a thing of the past.
A smaller apartment also costs less to run. Owners corporation fees and council rates are usually lower and it uses less energy to heat and cool, so your impact on the planet, and cost to your pocket, are reduced.
One word of caution – when considering a one-bedroom apartment, bear in mind that lenders can be a bit tricky if the internal area is less than 50 square metres.
But what about the two bedroom option? A two-bedroom apartment can help pay for itself. You could rent out the second bedroom and put this toward the mortgage. Or it could save you money as a home office. You may also be able to rent out the extra parking space if you are not using it.
Two bedrooms could suit your requirements longer than a single bedroom. If you are a couple considering starting a family, you may find that a two-bedroom apartment is just fine for when the two of you become three.
Traditional wisdom has it that a two-bedroom apartment produces greater capital gain than a one-bedroom, but that could well be changing. The Australian Bureau of Statistics predicts that the number of people living alone will increase by 1.7 million in the next 20 years, creating greater demand for one-bedroom apartments.
In Melbourne, the median price of one-bedroom apartments is currently (April 2019) $395,000; the two-bedroom median is $550,000. Prices in Sydney vary a lot more than Melbourne. In the south and south-west, an extra bedroom adds 14 per cent; in the inner west and northern beaches, it’s 30 per cent; and in the city and the east, an extra bedroom adds a huge 49 per cent. The one-bedroom median for Sydney is $735,000; two bedroom is $1.205 million.
So, the decision is yours. Like everything in life, the right choice comes down to what works for you and your plans.
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