Our mistaken strategies (part 2)

Conclusion #2: buying two small properties wasn’t such a good strategy either

Initially we wanted to buy one studio, not two. We targeted studios because it was the cheapest so it was more in the price range we could afford. The second studio was more of an opportunity purchase.

Anyway, as explained before, a studio is always a studio, no matter what. There is not much you can do to make it so more valuable that you can charge a high rent for it. But if we had pooled our money and bought one bigger flat, maybe we could have followed the “making the property more valuable” strategy.

Also, in terms of expenses, we would have incurred fewer expenses with one big property than with two small ones. This is because not all expenses are proportional to the size. For instance, instead of paying an agency to look for two tenants, we would have paid for just one. Owner’s insurance costs the same up to a certain amount of insured goods so we would have benefited from that too by buying one bigger property. We would have had fewer maintenance expenses because, as small as they are, both our studios have showers, WC, radiators, windows, pipes, furniture…

It’s true what they say: proportionally, the smallest things are always the most expensive. It’s too late to change strategy now so let’s hope that we end up profitting from it at some point in the future. Call me optimistic but maybe in 20 years the real estate market will have skyrocketted again and our two little studios will be worth very good money and we can make capital gains from selling them…

I hope you enjoyed this series of posts and learnt from them. And as always, feel free to comment on them!