One Large Apartment or Two Small Ones to Rent Out? Yield and Risk Compared
With a fixed budget for a rental investment, you may wonder whether to buy one large apartment or two small ones for roughly the same money. Two small units can bring higher gross income and spread risk, but they double the tenants, costs and admin. One large unit is simpler to manage but puts all your income on a single tenant. Here is how to compare them with your own numbers.
Start with the target tenant
In a university, industrial and coastal city like New Damietta, demand can vary by district. Students and single workers often want smaller, cheaper units; families usually need more space and tend to stay longer; summer visitors create seasonal demand. Ask several local agents how long each unit size typically stays empty and compare real listings.
A worked example
All figures below are hypothetical, for illustration only. Replace them with market data you collect.
| Item | One large unit (160 sq m) | Two small units (80 sq m each) |
|---|---|---|
| Total purchase price (EGP) | 3,200,000 | 3,200,000 (1,600,000 each) |
| Assumed monthly rent (EGP) | 15,000 | 8,500 each |
| Assumed vacancy per year | 1 month | 1.5 months each |
| Assumed annual costs (EGP) | 12,000 | 9,000 each |
| Gross annual rent (EGP) | 180,000 | 204,000 |
| Gross yield | 5.6% | 6.4% |
| Net income after vacancy and costs (EGP) | 153,000 | 160,500 |
| Net yield | 4.8% | 5.0% |
Net income = monthly rent x (12 minus vacant months) minus annual costs; yield = net income divided by price. The small units lead, but the net gap is much smaller than the gross gap because vacancy and costs multiply with each unit. See our guide to calculating rental yield.
Stress test: six months empty
| Scenario | Net annual income (EGP) | Net yield |
|---|---|---|
| Large unit empty for 6 months | 78,000 | 2.4% |
| One small unit empty for 6 months, the other normal | 122,250 | 3.8% |
This is the core advantage of two units: a vacancy stops only part of your income.
What the numbers miss
- Management effort: two contracts, two tenants, more maintenance, especially hard from abroad. See renting out from abroad.
- Per-unit fixed costs: utility meters, maintenance deposits, union fees and fit-out repeat for every unit.
- Exit flexibility: you can sell one small unit and keep the other.
- Future personal use: a larger unit may suit your family later.
- Furnished letting: small units may suit short furnished stays, at higher setup and management cost.
Decision checklist
- Define the target tenant for the district.
- Collect real rents for comparable units.
- Ask about typical vacancy by unit size.
- Calculate net yield for each option.
- Run a stress test with at least six months of vacancy.
- Price your management time or a manager's fee.
- Consult a financial adviser if this is a large share of your savings.
FAQ
Do small units always yield more?
No. Gross yield may be higher, but repeated vacancy and costs can narrow or erase the gap.
What is a good rental yield?
There is no single figure. Compare expected net yield with your alternatives and the risk involved, and ignore promises of guaranteed returns.
Should both units be in the same building?
It eases management but concentrates location risk.
This guide is for information only and is not investment advice.
On Masari you can compare unit prices, floor plans and payment plans before contacting any seller.