For renters, the math is simple: A one-bedroom for $1,585 is cheaper than a two-bedroom for $1,833 and a lot less than a three-bedroom for $2,048.
But from the perspective of a landlord intent on making the most money out of every square foot, the larger units are a relative bargain.
Look at the cost per square foot: an effective rate of $1.96 per square foot for a one-bedroom, $1.62 for a two-bedroom and $1.44 for three bedrooms, according to Dallas research firm Axiometrics.
Years ago, fewer than half of all new apartments constructed were one bedroom or studio units, says Axiometrics’ KC Sanjay.
Since 2012, however, builders have constructed about 10 percent more of the smaller units, hoping to pack more profit into a building, Sanjay says.
Now, apartment developers are pivoting again, as landlords find increasing demand for larger units, says Jeff Kottmeier of John Burns Real Estate Consulting, Washington, D.C.
“Contrary to history,” notes Kottmeier, “three-bedroom units are now often renting for more per square foot than two-bedroom units.”
Fueling demand, says Kottmeier: baby boomers selling large homes and moving into a rental, “one that’s smaller than the house they had, but still a big apartment,” and families with children.
Large units constructed now won’t be available until 2017, Kottmeier says.
The best way to land newly constructed units is to search the pre-leasing sections of apartment listing sites, says Michael Cohen of CoStar Group, Washington, D.C., parent of apartments.com. “You can secure a unit before it’s completed with a rental deposit.”
Many apartment companies list available rentals for immediate occupancy. For apartment hunters who are looking to move in a couple months, call or visit the leasing office of the building to see what’s available later, advises Cohen.
— Marilyn Kennedy Melia
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