Family Type vs. Single Type

Merit of Family Type

Tenants tend to stay long
Demand for quiet neighbor always exists
Easy to differentiate by having a reform done
Possible to gain profit from reselling

Demerit of Family Type

Harder to find a tenant than single type
Expensive reform costs
Possibility to move out (a family might buy a house)
Lower profitability per square meter

Merit of Single Type

High profitability per square meter
Cheap reform costs
More lease demands in big cities

Demerit of Single Type

Demand depends heavily on location
Time/Trouble consuming because of many move in/out
Too small room is not attractive to customers
Quality of tenants goes bad if rent is too cheap  

It is obvious that profitability differs in those two different types of rooms. For example, let’s assume a 20㎡ single room is rented for 50,000JPY a month. However you cannot always expect 100,000JPY from a 40㎡ family type room which is the double size of the single room. As you can see, single rooms have usually higher profitability. However a tenant usually stays in a single room for a short period which requires your energy and time to find new tenant.
In contrast, a tenant in a family type stays relatively long once they settle down. Also it is possible to differentiate and add more value by having reforms done to the room which helps finding new tenants any time.
 

Summary

Choose a property that meets the lease demands in the specific area. It is also important to think about your investment strategy as well as your property portfolio before you make the final decision.


Family Type vs. Single Type
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