19 Mar Are micros the next big thing in real estate?
Micros (small apartment units/complexes) may be the next big thing in urban real estate investment. It doesn’t take much research to see that apartment prices are close to record highs and urban dwellers looking for a space to rent will find few vacancies.
What exactly is a “micro unit”? A micro unit is most often thought of as a one-bedroom apartment. You also may have heard micro units referred to as economy, efficiency or studio apartments. These tiny dwelling units are becoming more and more popular in metropolitan cities across the United States, including Boston, New York City, Washington D.C, Philadelphia and more. The micro unit generally consists of 400 square feet or less. Micros often make a less expensive investment as they are cheaper to purchase and maintain, and rental income potential is high.
Many apartment dwellers don’t even own a car. They walk everywhere, so living within walking distance of amenities is a must. Easy access to parks, shopping, eateries and jobs make potential renters willing to pay “more for less” in the heart of the city.
Mortgage lenders are jumping on the bandwagon to finance these micro units. There are unique challenges, such as building safety codes and zoning compliance for these densely-inhabited micro units. But for lenders, the investment opportunity can outweigh the risk as the demand for micro housing within walking distance of work and amenities continues to grow in city centers.
What do you see as your next big commercial real estate investment opportunity? We can help. The legal professionals here at Barsh & Cohen have decades of experience in all areas of real estate development, including construction lending, contracting, liens and the preparation of closing documents. Let us help close your loan quickly and inexpensively.