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A successful apartment investment is a goal for many, but one of the first and most important questions has to do with the type of property: studio, one-bedroom or two-bedroom? The choice is not simply a matter of budget, but a strategic decision that will determine your profitability, risks and management commitments for years to come. A common mistake is to look for a one-size-fits-all answer. The truth is that the “best” investment suite does not exist in the abstract. It is directly related to your investment strategy, your target tenants and most importantly, your specific market and location.
In this article, we’ll do a detailed analysis of the pros and cons of each type of apartment so you can decide which apartment investment is best for you based on data, not emotion.
The Golden Rule: Strategy determines choice
Before comparing apartment types, you need to answer three questions:
- What is my strategy? Are you aiming for maximum monthly rental income (short term rental), stable and long term passive income (long term rental) or capital growth (sale in a few years at a higher price)?
- Who is my ideal tenant? Are you targeting students, young professionals, couples or small families? The answer depends entirely on location.
- What is the location? An apartment next to a university has a radically different demand profile than one in a quiet residential neighborhood or in the heart of a tourist area.
Once you have clarity on these points, we can move on to the analysis of each property type.
Studio analysis: maximum efficiency per square meter
The studio is a small, open space that combines a bedroom, living room and kitchenette into one.
Target tenants: students, young professionals working in the centre, single people, tourists (for short-term rentals).
Pros for the investor:
- Lowest entry price: this is the most affordable property in terms of purchase price, making it an excellent choice for first-time investors or those on a tighter budget.
- Potentially highest ROI (%): Due to the low initial investment, the percentage return (ROI) can be higher compared to larger apartments if the property is managed well.
- Low maintenance costs: smaller space means lower costs for repairs, furnishings, cleaning and running bills.
- High demand in specific areas: in areas around universities, large business centres or in the city centre, demand for studios can exceed supply.
Minuses for the investor:
- High tenant turnover: students and young professionals change their home more often. This leads to more frequent periods without rent (vacancy), costs to find new tenants and a higher administrative commitment.
- Smaller audience: the circle of potential tenants is limited. The studio is not suitable for couples (long-term) or families.
- Lower capital growth: although the percentage price growth may be good, the absolute value of the gain on sale is lower compared to larger apartments.
Analysis of One Bedroom Apartment (1 Bedroom): ‘The Golden Environment’
The one-bedroom apartment (consisting of a bedroom and a separate living room with kitchen) is often defined as the “gold standard” in long-term rental investments. For many, this is the most balanced apartment investment.
Target tenants: young professionals, couples, small families with one child. This is the broadest and most stable segment of the rental market.
Pros for the investor:
- The widest range of tenants: this type of apartment is attractive to the largest group of the population, which guarantees a constant demand.
- Balance between price and yield: offers the perfect balance between affordable purchase price and stable, good monthly rent.
- Lower turnover: Couples and young professionals tend to stay longer as tenants, which provides security to your income.
- High liquidity: one-bedroom apartments are the easiest not only to rent, but also to sell when you decide to exit the investment.
Minuses for the investor:
- High competition: as this is the most sought after type of investment property, you will be competing with many other landlords in the market.
- A “happy medium” in returns too: rarely will you achieve the record high percentage return on a studio or the highest absolute rent on a three-bedroom. It’s stable, but not an extreme player.
Analysis of the Three Bedroom Apartment (2 Bedrooms): Game of Stability
The three-bedroom apartment (with two separate bedrooms and a living room) is aimed at more settled tenants looking for a long-term home.
Target tenants: families with children, two roommates who want their own space.
Pros for the investor:
- Longest-term tenants: Families are the most stable tenants. They don’t move often, which means minimal rent-free periods and almost zero tenant search costs.
- Highest monthly rent: In absolute value, this apartment type generates the highest rent.
- Higher capital growth: higher property value also means a higher absolute gain on a future sale.
- Less wear and tear: families tend to look after the property as if it were their own home.
Minuses for the investor:
- Highest purchase price: requires a significantly larger initial investment.
- Higher costs: everything is more expensive – taxes, maintenance fees, repairs and furnishings.
- Lower percentage ROI: Because of the high entry price, the percentage return is usually lower than that of smaller apartments.
- Narrower range of tenants: there is less demand for three-bedroom apartments for rent than two-bedroom apartments.
Comparison table for the investor
To summarise, here is a comparison table to help you assess which apartment investment is best for you:
| Criterion | Studio | One bedroom (1 bedroom) | Three bedroom (2 bedrooms) |
| Purchase price | Low | Medium | High |
| Percent ROI | Potentially highest | Stable and good | Potentially lowest |
| Monthly rent (€) | Moderate | Good | Top |
| Turnover of tenants | High | Medium | Low |
| Circle of tenants | Tessen (students) | Wide (couples, professionals) | Specific (families) |
| Liquidity (easy sale) | Good | Excellent | Good |
| Maintenance costs | Low | Medium | High |
Conclusion: who is the winner for you?
As you can see, there is no one winner. The choice is entirely up to you.
- Choose a studio if: you have a limited budget, you’re aiming for the highest percentage ROI, and you’re investing in an area with lots of students or near a major business center. Be prepared for more active management.
- Choose a one-bedroom apartment if: you are looking for the best balance between security, stable income and good liquidity. This is the safest and most versatile bet for most markets.
- Choose a two-bedroom apartment if: you have more equity, your goal is long-term stability with minimal care and high absolute rent, and you’re investing in a neighborhood favored by families.
The right question is not “Which type of apartment is best?” but “Which type of apartment is best for my strategy and for this particular market?”. Analyze the location, define your ideal tenant, and the best apartment investment for you will become obvious.
This post is also available in: Български
