Every other page in this series is about a place. This one is about a decision that happens before the place: whether to buy the format below or the format above, and what actually changes when you cross that line.
It is worth being precise about the boundary with its neighbour. The best layouts guide asks which internal arrangement rents best within a given size. This page asks something different: why buyers keep stepping up a size, and when that step is wrong.
The percentage falls, and buyers move anyway
Two things are simultaneously true, and holding both is the whole point.
Two-bedrooms usually show a lower headline yield. More capital, a rate that does not double when the bedroom count does, and (in most short-let markets) lower occupancy than the small units below them, because the pool of parties needing two rooms is smaller than the pool of couples needing one.
And demand for them has been rising anyway. Not because buyers have stopped doing arithmetic, but because the percentage was never a complete description of the asset.
Here is what actually changes across the line:
| Studio / one-bedroom | Two-bedroom | |
|---|---|---|
| Typical tenant | Couple, solo traveller, short stay | Family or sharers, longer stay |
| Length of stay | Nights to weeks | Months to a year |
| Turnovers per year | Many | Few |
| Cleaning and linen | Per turnover, so high | Per turnover, so low |
| Vacancy measured in | Days | Months |
| Wear cycle | Seasons | Years |
| Owner-use realistic? | Rarely comfortable | Yes |
| Resale buyers | Mostly investors | Investors and residents |
The two lines that decide it are turnover cost and resale width. A flat cleaned forty times a year carries a very different cost base from one cleaned twice, and a percentage quoted on gross hides that entirely. Meanwhile a two-bedroom can be sold to somebody who wants to live in it, which means its price is not purely a multiple of what it earned.
What the sizes actually are
Format names are looser than buyers expect, and a “two-bedroom” in one scheme can be smaller than a “one-bedroom” in another. Across the Phuket schemes covered in these guides the bands look roughly like this.
| Format | Sizes seen across schemes | Where it starts to work |
|---|---|---|
| Studio | 21-36 sqm | Anywhere; it is a letting unit by design |
| One-bedroom | 30-50 sqm | From the high 30s, below which it is a partitioned studio |
| Two-bedroom | 48-110 sqm | From about 60 sqm, below which the second room is nominal |
| Three-bedroom | 70-150 sqm | From about 110 sqm for a family, less for a dual-key |
Those are observed ranges from the project tables in this corpus rather than market statistics, and the point of them is the overlap. A 48 sqm two-bedroom and a 50 sqm one-bedroom are the same apartment with a different wall in it, and they will not let to the same tenant. Judge a flat by its floor plan and its area, never by the name in the listing.
Two other numbers govern the step up regardless of area. Foreign freehold is capped at 49% of a building’s floor area, which is why the larger formats run out of allowance first. And letting for under 30 days is hotel business licensed at the building, which mostly stops applying once you are letting to households on annual contracts - one of the quieter advantages of moving up a size.
Compare two formats in the same building
Seeing a one-bedroom and a two-bedroom in one visit settles the question faster than any spreadsheet. 0% buyer commission, full legal support.
When the step up is wrong
The move is not automatically right, and a page that only argued for it would be selling rather than advising.
When you are buying purely for percentage return. If the number on the spreadsheet is the whole objective and you have no interest in occupying or in a resident buyer, a well-run small unit usually wins. Say so plainly and buy the smaller flat.
When the second bedroom is not a bedroom. A partitioned space without a window or a door is a marketing claim. It will not hold a family tenant and it will not survive a valuation.
When the area has no family demand. Two bedrooms in a bay that fills with couples on short breaks is a larger flat competing for the same guest at a higher capital cost. The format needs a market of households behind it.
When vacancy would hurt you. Family tenancies cluster around a school year or a work contract. Miss the window and the flat can sit for a season. If you cannot carry two empty months, the smaller unit’s shorter voids are safer.
When you cannot fund the fit-out. A two-bedroom let to a household needs storage, a second bathroom that works, a real kitchen and a parking space. Half-furnishing a larger flat produces a worse asset than a properly finished small one.
The arithmetic that actually separates the formats
Almost every comparison between formats is run on gross yield, which is the one measure that cannot see the difference. Run it this way instead, and the answer usually flips.
Work in cost per occupied night, not cost per month. Cleaning and linen are charged per changeover. So take the annual cleaning cost, divide it by the number of nights the flat is actually occupied, and you have a figure you can compare across sizes. A studio filling its calendar with three-night stays incurs that charge roughly a hundred times a year. A two-bedroom on two annual tenancies incurs it twice. At the same occupancy percentage, those are not the same business, and no gross yield will tell you so.
Then add the lines that follow turnover rather than rent. Consumables, the small repairs that arrive with every new occupant, the management time spent on arrivals, the platform commission charged per booking, and the replacement cycle for soft furnishings that wear by use rather than by age.
Then subtract owner use honestly. A two-bedroom is a flat you can genuinely spend a fortnight in. If you will, those weeks are part of the return and they should be priced at what the equivalent stay would cost you elsewhere. A studio rarely delivers that, so its return is cash only.
Finally, put vacancy in the right unit. Days for a short-let studio, months for a family tenancy. The two risks feel different because they are different: one is a slow leak you barely notice, the other is a hole that appears once and takes a season to close.
Do that on both formats in the same building and the gap between the headline percentages usually narrows sharply, and sometimes reverses. The rental yield guide works the full stack.
What happens when you sell
The second half of the case for stepping up has nothing to do with rent, and it is the half most buyers never model.
A studio is sold to an investor. Almost nobody buys one to live in, so the purchaser values it as an income stream and the price follows what it earned. A soft letting year is therefore a soft sale price, and the two risks are correlated rather than independent.
A two-bedroom is sold to an investor or to a household. The second buyer is not calculating a yield at all. They are asking whether their family fits, whether the building is quiet, whether there is storage, whether the school run works. That widens the market and decouples your exit from your letting performance.
Three bedrooms narrows again, sharply. At that size the household buyer is specific and the investor has largely gone, which is why the format sells slowly almost everywhere on the island.
So the curve is not linear. Resale liquidity rises from studio to two-bedroom and then falls away above it, which is a large part of why two-bedroom demand has been strengthening while the formats either side of it have not.
What that means practically. If there is any chance you will need to sell inside five years, the width of the buyer pool matters more than a point of yield, and the middle of the range is where that width is greatest. If you are certain you are holding for a decade, the argument weakens and you can buy the format that suits your own use.
What to check before stepping up
- Is the second bedroom real? Door, window, space for a wardrobe. Judge it on the plan and again in person.
- Who is the household in this area? School families, remote workers, sharers, retirees, name them, and check they exist here rather than assuming.
- What do comparable two-bedrooms sign for on annual contracts? Signed rents from an agent, not asking rents from a portal.
- How many turnovers does your model assume? Then price cleaning and linen per turnover rather than per month.
- Can you carry a vacant window? Put the void in the model in months.
- Is the foreign allowance open for two-bedroom stock? The 49% cap is calculated on floor area, so larger units exhaust a building’s foreign side first, and this is where buyers most often find it closed. Ask in square metres, dated, before choosing a flat.
- Does parking come with it, in writing? Households arrive with cars. This is a contractual question rather than a matter of what is empty on viewing day.
Before you decide on a size
- Both formats priced in the same building, so the comparison is not contaminated by location.
- Cleaning and linen quoted per changeover, then converted to a cost per occupied night for each.
- Signed annual rents for the larger format, from an agent rather than a portal.
- Nightly rate and realistic occupancy for the smaller one, from owner statements rather than projections.
- Vacancy in the correct unit for each: days for short letting, months for a tenancy.
- Owner use priced in, if you will genuinely spend time there.
- Remaining foreign allowance, in square metres and dated, for the larger format specifically.
- Parking, storage and a second bathroom confirmed rather than assumed.
- An honest answer on holding period, because the resale argument only matters if you might sell.
One option that avoids the choice
A dual-key apartment splits a single title into two lockable halves, usually a one-bedroom and a studio sharing an entrance lobby. It looks like a way to have both formats at once, and sometimes it is.
Three things decide whether it works. The title has to be a single unit rather than two, or you are buying a different thing from what you were shown. The building’s rules have to permit letting one side while the other is occupied, which is a question for the juristic person rather than the sales office. And the layout has to give each half its own bathroom and a genuine door, otherwise you have a two-bedroom with an awkward corridor.
Where all three hold, a dual-key gives a household somewhere to put visiting family and an owner a way to let half the flat while using the rest. Where they do not, it is a compromise that serves neither purpose and confuses a valuer at resale.
Which buyer should step up
| Profile | Format | What settles it |
|---|---|---|
| Percentage-led investor | Studio or one-bedroom | Do you care about anything except the yield line? |
| Buyer wanting a steadier year | Two-bedroom on annual tenancies | Can you carry a vacant window between tenants? |
| Buyer who will use the flat | Two-bedroom | Would you spend a fortnight in the smaller one? |
| Buyer thinking about resale | Two-bedroom | Do you want investors alone, or residents as well? |
| First purchase, limited budget | The smaller flat, done properly | Is a well-finished small unit better than a half-finished large one? |
Insider tip: before choosing a size, ask a letting agent in your target area for the number of two-bedroom tenancies they signed last year and the number of nightly bookings they handled for one-bedrooms. The ratio tells you which format that specific market actually absorbs, and it is a fact rather than a projection.
The honest summary
Stepping up a format trades a higher percentage for a lower cost base, a longer tenant, a wider resale market and the ability to use the property yourself. That trade is worth making for most buyers who are not purely yield-driven, which is why demand has moved the way it has.
It is not worth making when the second bedroom is nominal, when the local market has no households in it, or when your model cannot absorb a vacant season. The correct answer depends on which of those describes you, and the rental yield guide sets out how to run the arithmetic on both sides before deciding.
Frequently Asked Questions
In percentage terms, usually less: more capital, a rate that does not double with the bedroom count, and often lower occupancy because fewer parties need two rooms than need one. What improves is everything the percentage does not capture - far fewer turnovers and therefore far lower cleaning and linen cost, longer tenancies, slower wear, and a resale market that includes residents rather than only investors.
Because the percentage was never a complete description of the asset. A flat cleaned twice a year has a different cost base from one cleaned forty times, and a flat that can be sold to someone who wants to live in it is not priced purely as a multiple of what it earned. Buyers stepping up are trading a headline number for a lower cost base, a steadier tenant and a wider exit.
When you are buying purely for percentage return and have no interest in occupying it or in a resident buyer - a well-run small unit usually wins on that measure. Also when the second bedroom has no door or window, when the area has no household demand behind it, when you could not carry two empty months between tenancies, or when you cannot afford to furnish the larger flat properly.
Lower than for a one-bedroom in the same building if you are letting short, because the pool of groups needing two rooms is smaller than the pool of couples needing one. If you are letting annually the question changes shape entirely: what matters is not occupancy but whether you catch the letting window, since family tenancies cluster around a school year or a work contract and a missed window can mean a season empty.
Only if it is genuinely a bedroom. A partitioned corner without a door or a window is a marketing claim: it will not hold a family tenant, it will not survive a valuation and it will not widen your resale market. Judge it on the floor plan and then in person, and check there is room for a wardrobe rather than just a bed.
Yes, and it catches buyers out at exactly this step. The 49% foreign allowance in a condominium is calculated on floor area rather than on the number of apartments, so larger units consume it several times faster and a building's foreign side usually closes at the top first. Ask for the remaining allowance in square metres, dated, for two-bedroom stock specifically - before you choose a flat rather than after.
Related Guides:
- Best Layouts for Rental Demand, which arrangement rents best within a size
- What Type of Unit Performs Best in Phuket, the format question from the income side
- Which Phuket Areas Have the Strongest Occupancy, where the households actually are
- Best Areas to Buy Property in Phuket, choosing the place after the format
- Phuket Rental Yield Guide, running the arithmetic on both sides
MORE Group Editorial
Phuket Real Estate Experts
The MORE Group team has helped 500+ European and American buyers purchase property in Thailand. We provide legal support, 0% commission, and on-the-ground expertise with 8 years in the Phuket market.
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