Shoebox apartments are also called Mickey Mouse apartments. Apparently, local estate agents think the mascot of a multi-million dollar company is trivial. But just like Mickey Mouse, shoebox apartments aren’t the joke that they seem. In fact, the cost drawbacks may outweigh that of larger apartments. H88 has an opinion on the real worth of these properties:
Mickey Mouse Apartments: Do Your Maths First
We read a very interesting article in Today. They were talking about the economics of tiny shoebox apartments, known locally as ‘Mickey Mouse’ apartments. These are condo units about the size of a large hotel room, ranging from 250 to 500 sqft in size.
It’s a pretty long article, which you should read if you have the time. If you don’t here’s the gist of what he said:
- There’s always a limit to how high the rent can go. Any higher and it might actually be cheaper to stay in a hotel! And cleaning is included in cost!
- Look carefully at maintenance fees, especially if your shoebox is sharing the condos with larger condo units. Why? Because though your shoebox might be three times smaller than a 3-bedder, the 3-bedder is not paying three times more in maintenance fees. The ‘burden’ is unequally shared. It’s the rules!
- When the economy goes down, can your shoebox handle the competition when the normal 2 and 3 bedder’s rental price falls close to yours?
- Condos with a mix of shoeboxes and normal 4-bedders might have a ‘social’ challenge. Basically, there might be ‘social’ issues between the temporary tenant and the long-term live-here-until-I-die occupier.
A MoneySmart Response
The maintenance cost is a good point. When getting a shoebox apartment, don’t count on getting a lot of rent money. If you really want to invest in them, these small apartments are better bought and sold fast, rather than kept as cash cows. Shoebox apartments are also fairly new to the market, and there are few predictors for their performance.
Are you considering a shoebox apartment? Comment and let us know!
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