For some, small to mid-range houses are the most practical solutions for homebuyers. Everything including water, appliances and other basic things you need can be available in such places. Such houses give you almost everything you need to live, but as an investment, choosing such properties is an impractical move and for investors, going big always makes sense.
Return on investment on small to mid-range houses is close to none. Here’s why buying small is not a great idea.
Demand is low
Don’t think that people want small houses these days and you’ll find many buyers for such property. Real estate sales are supply and demand dependent, while the supply of such units is high, the demand is less. That’s the biggest reason why there are houses that sell for less. A small home only fits into a small segment where the number of buyers is less. If you’re planning to invest in multiple small house units, you will have to wait for a long time to see the ‘best time for sell’ moment.
The biggest reason why people choose small houses is the price. Downsizing is considered an attempt to save money. But the problem is, this is not always the case.If you wish to have a party, you’ll be renting a venue, if you want a small office space, you will need to rent a place. If you’re paying little price for a small unit, you can expect your potential buyer to pay you more for the same unit in future.
It’s small and it sucks
As a college grad or a new bachelor in the city, small houses are always appealing and affordable. Let’s consider facts. Most of the Indians tend to collect stuff and they struggle to find storage space for everything they have. In small houses, you get enough space for yourself, but you cannot think about expansion, extra storage, and a new room nothing. Planning to welcome a baby, that house will make your life worse than ever. If you like living with enough sunlight, fresh air and nature, choosing a luxury villa could be the best decision.
The market of small houses is no more attractive. It has become an unproven market where nobody really cares about growth. People just want to buy a place at a lower price. They don’t mind looking for add-ons. So no matter how much you invest in a small house to increase the value, things go unnoticed many times and as a result, the money you put into it doesn’t add real value to the house when it comes to selling. Small homes are a risky investment.