Best Home Size for an Investment Property

When you’re building an investment property, one of the most important questions is: How big of a home should I build? For big money developers, the mantra is usually, “Bigger is always better” – because they want to maximize lot coverage. After all, the larger the property, the more income potential it has. However, that’s not always the case – and it’s not always the best option for every investor or market. As the real estate market and lifestyles evolve, the answer becomes less black-and-white. While 3-bed/2-bath homes were once the ideal size for families, they’re no longer the gold standard. Deciding on the size of your new investment property relies heavily on knowing the area, the people, and the market of the location you’re building in.

At Naples Relocation Experts, we lend our insights and expertise at every step of the real estate investment process. That includes the early planning stages when you’re deciding where, how much, and how big to invest! We’re a triple-threat real estate team that specializes in buying and selling property, moving consultations, and real estate investing. We use our intimate knowledge of the area and our years of experience in the local market to our client’s best advantage.

To get you started on your investing journey, we’ve compiled a list of things to consider when deciding on the best size for your investment property.

Changing Households

Gone are the days where every family strived for two kids, a dog, and a white picket fence. The “traditional” family household has become more nuanced and blended. Americans are now waiting longer to have children, choosing to have fewer babies, or deciding not to have kids at all. The real estate market is evolving to reflect that.

Young Couple At A Naples Beach
Happy couple walking off the Naples beach.

Here’s an estimated breakdown of family living arrangements, according to 2022 US Census statistics:

  • Two Family Members: 47.8%
  • Three Family Members: 21.7%
  • Four Family Members: 17.8%
  • Five or More Family Members: 12.6%

Based on that data, nearly half of family households in the US currently have only two family members living together. The previously popular four-member family unit is only 17.8%. The demand is certainly there for smaller homes.

Housing Shortage

The United States is currently in a nationwide housing shortage, and it’s predicted to get worse. This challenge is magnified in Florida, and especially in Southwest Florida. There’s already scarcity in the real estate market, and that means demand is high – and getting higher. This is a great time for real estate investors, as it increases chances of a faster sale with a higher sale price. It also lends flexibility in the size and style you choose to build. Regardless of the home’s square footage, you can feel confident that the demand will be there as long as it’s well-built and well-priced.

Local Lifestyle

The best home size obviously varies from state to state and city to city, but it also fluctuates at a neighborhood level. When considering the best size for your investment property, you need to consider the location you plan to build in. This is especially true for Naples, where property values vary greatly by location. The average home in Park Shore, where the median listing price is nearly $2.45 million, is going to differ from the average home in Naples Park, where the median listing price is $1.3 million.

“Always consider the neighborhood when deciding on size,” emphasized Drew Josephson, founder of Naples Relocation Experts. “Large properties make sense in areas like Park Shore, where the market can bear an $8 million sale. However, in Naples Park, some of the highest priced sales on standard lots were over $2 million, and those homes were only 1,970 square feet.”

Drew cites the properties 775 92nd Ave N and 541 102nd Ave N as examples of high priced sales on standard lots in Naples Park.

Grandfather and grand children walking with fishing poles in Naples.

Consider the lifestyle of some of these popular Naples, FL neighborhoods:

  • Coquina Sands: Tree-lined winding streets with single-family homes and condominiums.
  • Naples Park: Suburban and affordable with single-family homes.
  • Old Naples: Expensive and extravagant with large mansions and a mix of old and new homes.
  • Park Shore: Exclusive and luxurious with high-rise apartments, stately mansions, and waterfront properties.
  • Pelican Bay: Trendy and high-end with high rises and views of the Gulf.
  • The Moorings: Quiet and picturesque with single-family homes and condominiums.

Consult a local real estate expert to decide the best neighborhood for your investment before deciding on the best size.

Size vs. Layout

Even more important than the size of the home you build is what you do with that square footage. A good floor plan can make a home appear bigger by maximizing space, light, and airflow. On the other hand, a bad floor plan can make a home appear dark, stuffy, and uninviting. How many times have you walked through a home just to be put off by a small master bedroom or a cramped kitchen? When determining the size of your build, consider how many rooms you want to include and allocate them with the appropriate amount of space. You’ll want to partner with an experienced architect and construction company to ensure you’re making the most of the space you choose to build on.

Local Housing Prices & Rent

If you want to sell your investment property after building, you’ll want to consider the local housing prices. Building a bigger home costs more, and you want to be sure you’ll recoup your investment with profit once it sells. In March 2023, the Naples Area Board of Realtors (NABOR) reported a median closed price of $615,000 for all of Naples, FL.

Waterfront homes in Naples, Florida with boats and docks
Waterfront homes in Naples, FL.

This will also, of course, vary by neighborhood. Here are the median listing prices for some of Naples’s neighborhoods as of April 2023 (according to

  • Coquina Sands: $5 million
  • Naples Park: $1.3 million
  • Old Naples: $2.1 million
  • Park Shore: $2.45 million
  • Pelican Bay: $1.6 million
  • The Moorings: $2.79 million

If you’re choosing to rent out your property, be sure to research the average rent for the neighborhood. Zillow lists the median rent for all bedrooms and property types in Naples, FL as $4,500 per month as of April 2023.

Other Upgrades

If you’re hesitant to build a larger home, there are plenty of other ways to add value and appeal to your investment property. For example, in Southwest Florida, a pool is a must-have addition and is often a dealbreaker for buyers, especially in the post-COVID market. Other desirable upgrades include wood floors, extra-height kitchen cabinets, energy-efficient appliances, two-car garages, and more. If the end goal is simply increasing your property value, there are an endless number of ways to do this without adding more space. Research value-adds in other properties in the area for a better understanding of what’s selling versus what’s not.

Ready to move forward with your investment property?

Regardless of what size home you’re choosing to build, our team is ready to help you begin the investment process. We can guide you through the best neighborhoods to invest in, help you find the right property for your needs, and connect you with trusted contractors to begin construction.

To learn more about Naples real estate investing, check out some of our other blogs:

The Naples Relocation Experts and Compass Real Estate team standing at a kitchen counter from left to right Andrew Ventura Chanel Josephson and Drew Josephson
The Naples Relocation Experts and Compass Real Estate team standing at a kitchen counter from left to right Andrew Ventura, Chanel Josephson, and Drew Josephson

Contact Naples Relocation Experts today, and let’s get to building your dream investment property.

Drew Josephson
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