Maximize returns by optimizing small spaces. Discover smart design tips, storage solutions, and layout ideas to enhance functionality and increase value.

You’ve invested in a smaller property and now you think you’ve made a huge mistake. How do you put a higher rent on something small? Or how to sell it for a good profit?

The good news is, you can make a small place work. And also, you can get a good rent income or price out of it. Small doesn’t have to mean less; it just means you have to be a little bit smarter when it comes to design.

This ‘small’ guide will demonstrate how to decorate a compact property effectively so that it looks very attractive to future prospects. We’ll also tell you how to get the necessary funds for those adjustments/redecorating (in case you need them).

How To Get The Funds In Case You Need Them?

Let’s get this straight out of the way, so that you can focus not on your budget, but rather on what you want and how you envision design. 

When inferring about financing, the first thing that might come to mind will be loans (most likely). And that’s because of the sole reason of the majority of people financing their properties with loans. The type of loan that you settle on will influence in a major way how much return the investment will bring. This, however, isn’t a universal answer due to the fact that loans are very different from one state to another.

For example, Kansas has cheaper property rates; that’s why investing in property in Kansas would be a good, ‘safe’ option (especially for beginners). In California, this isn’t the case, which has higher prices, but the lending rules are more stringent, making it difficult to access a loan (not beginner-friendly). However, Texas is quite appealing for real estate investors since real estate is doing well there, and the loans given are also beneficial to the investors, meaning investable deals are easier to come across with very good returns.

That’s a generalization, of course, but you get the idea.

For instance, Kansas offers lower property prices; this means that investing in property in Kansas would be a good idea, especially for starters. This isn’t the case in California, which has higher prices, but the lending rules are more stringent, making it difficult to access a loan. Bear in mind that Texas has a strong real estate economy, and its loans are very favorable to investors, so it’s easier to find investment opportunities with high returns. That’s a generalization, but you get the idea.

Then there’s also the type of loan you’re taking. 

Debt-service coverage ratio (DSCR) loans are one of the most popular options among investors, and it’s obvious why. A DSCR loan emphasizes cash flow generation from the secured real estate asset rather than the borrower’s income making them perfect for rental properties. 

There are also conventional loans, but those require a very decent credit score and a huge payment (a percentage of the full price) in advance, which may not be suitable for a beginner or someone with limited resources.

Federal Housing Administration (FHA) loans are excellent; they’re backed by the government and they’re ideal for people with no/limited capital. 

How to Make a Small Space Work

Ok, so now you have the funds secured, and you can start thinking about how to boost value of your small-sized property.

Well, you can’t just cram furniture into the place and hope for the best. You can, but it might look ridiculous; or even worse, this way, you’d emphasize how small the place is, instead of doing the opposite. 

In small spaces, every inch needs to have a purpose, and if you can make your small property look good and spacious, you can charge a higher rent or get a better selling price.

1. Multi-Functional Furniture

Furniture cannot be limited to serving only one purpose. Well, again, it CAN, but it definitely shouldn’t.

Think beds/couches with internal storage; think foldable dining/coffee tables; think seating areas with storage inside them.

Tenants love furniture like this because it’s versatile, and they can turn living rooms into guest rooms or dining areas into home offices. It gives them options, which with limited space, you usually don’t have.

2. Vertical Storage

If there’s limited floor space, you don’t want to use it for storage. Instead, go up. Use those walls which would otherwise stand there completely blank, or as placeholders for a painting. Instead of spreading out horizontally, use floor-to-ceiling shelves, hooks, and leaning cupboards.

For example, you can mount a bookshelf high up, or you can do the same with kitchen cabinets. You can even create a fancy wine bottle shelf up near the dining area on a wall that would otherwise stand there doing nothing (besides its main function of holding the weight, of course). Solutions like these will prove to be very effective storage, and they won’t clutter the floor space.

With vertical storage, the space becomes more organized and visually open.

3. Open Plan Designs are Increasingly Popular

With open layouts, you get more ‘breathing’ room. The area might’ve increased by a tiny bit because there are fewer walls now, but it’s pretty much the same. And yet – it looks so much more spacious than it did before.

To do this, remove all the walls along with the room separators as they are not necessary at all.

WARNING: Do not touch the bearing walls, or you might threaten the stability of the whole property. So, if you don't know what you’re doing, definitely hire a designer, or an architect. These types of professionals will (very likely) be interconnected with one another because they depend on each other. So you won’t have to go through the trouble of looking for an architect, a structural engineer, a designer, etc.

4. Light and Color

Lighting and colors are important in general; that’s a given. But they can actually make or break a small space. Light colors make the space (appear) larger, while darker colors do the opposite. However, if you, for example, color all the walls, alongside the ceiling into a dark color in a bedroom, you’ll create the illusion that the space is ‘endless’. So, you can do A LOT with just colors.

Lighting should be adequate but, more importantly, layered. That is, one can have skirting boards fitted with recessed lights and also install wall-mounted fixtures to light up the insides quite well, leaving no dark corners. LED strips are (if done right) a very affordable way to add ambient light and enhance a space extremely effectively. 

And also, don’t forget mirrors and all surfaces that could go reflective (e.g., cabinets, closets, etc.) as they enhance sunlight to parts of the room that are in the shade (e.g., hallways, corners, etc.) and bring class to the room.

Conclusion

If you use any of the above-mentioned techniques individually, you’ll surely get a positive outcome. It won’t be THAT impactful, but it will be noticeable. However, if you combine multiple of these (or other) techniques, you’ll completely transform the place. It will actually look completely new/different. Unrecognizable; but in a good way. 

And most importantly, it’ll look bigger – which is the goal you wanted to achieve.

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