Should You Buy a 1 Bedroom or a 2 Bedroom Condo as an Investment?
A Simple Brentwood Example
This is one of the most common questions I hear from clients looking to purchase their first investment property.
The answer isn’t always straightforward. A 1 bedroom unit may generate stronger cash flow, while a 2 bedroom unit often has greater long term appreciation potential.
When evaluating a real estate investment, we typically look at two key factors:
• Cash flow
• Future appreciation
In general, we don’t recommend short term flipping. Real estate tends to perform better when held at least 5 to 10 years.
To illustrate the difference, let’s walk through a simplified example from a 15 year old complex near Brentwood Mall.
What This Shows
The 1 bedroom unit generally produces stronger cash flow, simply because the purchase price is lower relative to the rent.
However, the 2 bedroom unit may have stronger long term appreciation potential because the asset value is higher.
For example, if prices increase 10%:
1 bedroom
$500,000 → $550,000
Gain = $50,000
2 bedroom
$700,000 → $770,000
Gain = $70,000
Tenant Profile Matters
Another factor investors often overlook is the type of tenants each unit attracts.
1 Bedroom Units
These units typically attract
• Singles
• Young couples without children
Turnover tends to be higher, as tenants may move when their life stage changes.
2 Bedroom Units
These units usually attract
• Small families
• Professionals sharing
Tenants often stay longer, which can provide more stability.
The Most Important Factor: Location
Regardless of whether you choose a 1 bedroom or 2 bedroom, one factor consistently matters the most:
Location.
For example:
A 2 bedroom in a less desirable location
vs
A 1 bedroom in a prime location
In most cases, the better location tends to perform better over time.
Final Thoughts
Both 1 bedroom and 2 bedroom units can work well as investments. It ultimately depends on your budget, cash flow expectations, and long term goals.
But regardless of the unit type, the most important thing is choosing a property with strong fundamentals in the right location.