Investment by Bedrooms: What Yields the Most in Montevideo? — July 2026
INGAR · · Guides
Is it better to invest in smaller properties for higher yield?
A studio can yield 6.5% and a 3-bedroom 4.5%, so on gross yield smaller usually wins, but it is not always the best investment. The question every investor asks in Montevideo is whether buying small yields more than buying large. The answer is not simple, but the numbers from the current market give clear clues.
In the current real estate supply market in Montevideo, gross yields vary significantly depending on the number of bedrooms. Studio apartments and 1-bedroom units tend to offer higher yields, while larger properties—even with higher absolute prices—generate lower percentage returns. This happens because rental demand for small units is more elastic and tenant turnover is more frequent, which allows prices to be adjusted more quickly to inflation and market demand.
However, "profitability" is not just yield. You also need to consider capital appreciation, vacancy, maintenance costs, and, very importantly, your ability to leverage debt. A 3-bedroom property that yields 4.5% but appreciates 3% annually may be a better investment than a studio that yields 6.5% but does not appreciate.
What yield do studios and 1-bedroom units offer in Montevideo?
| Neighborhood | Sale Price | Rent | Yield |
|---|
Studios and 1-bedroom units offer yields between 5.5% and 7.5% depending on the neighborhood, the highest in the Montevideo market. They are the thermometer of gross profitability: while we do not have current data in the tables for this month, these products have historically offered those returns because the monthly rent is relatively high in relation to the purchase price.
Pros:
- Higher yields: the rent-to-price ratio is more favorable
- Lower vacancy: there is constant demand from young professionals, couples, and international students
- Simpler and more affordable maintenance
- Easier access to properties in premium areas (Pocitos, Centro) with a lower initial investment
- Greater liquidity: they sell faster
Cons:
- Slower appreciation: being less expensive, they increase less in absolute dollar terms
- Greater wear from tenant turnover (4-5 changes every 10 years vs. 2-3 in larger units)
- Demand more sensitive to economic recessions
- Fewer opportunities for returns through renovations or improvements
What yield do 2-bedroom units offer in Montevideo?
| Neighborhood | Sale Price | Rent | Yield |
|---|
2-bedroom units yield between 4.5% and 5.5% depending on the neighborhood and are the workhorse of the Montevideo market. It is the property type with the highest tenant demand (couples with children, young families) and the most balanced between profitability and appreciation.
Demand profile:
- Young families with 1-2 children
- Couples who need a home office
- Professionals who want more space than a studio but do not need 3 bedrooms
- Tenants with greater job stability (lower turnover)
Yields in this category typically range from 4.5% to 5.5% depending on the neighborhood. They are not the highest, but demand is predictable and tenants tend to renew leases. Liquidity is excellent: it is the most purchased and most rented category in Montevideo.
Liquidity and profitability combined: A 2-bedroom unit in an intermediate area (La Blanqueada, Pocitos, Punta Carretas) may not have the spectacular yield of a studio, but it sells in 60-90 days, has low vacancy, and demand is predictable. That is worth money.
Is it worth investing in 3+ bedroom units?
| Neighborhood | Sale Price | Rent | Yield |
|---|
3+ bedroom units yield typically between 3.5% and 5.0%, lower than smaller units: it is worth it if you are looking for long-term stability and capital appreciation, not maximum gross yield. They are a different kind of bet, with a higher entry ticket but lower tenant turnover.
Market characteristics:
- Yields typically between 3.5% and 5.0% (lower than smaller units)
- Higher entry ticket: from USD 150,000 to USD 400,000+ in premium areas
- More selective tenant demand: established families, high-income foreigners
- Lower turnover: a tenant in a 3-bedroom home typically stays 5-7 years
- Higher maintenance and utility costs
When buying large makes sense:
- You have more than USD 200,000 to invest and want to reduce risk by concentrating in a single property
- You are looking for capital appreciation over 10+ years (not annual profitability)
- You want a stable and reliable tenant
- You might use the property yourself at some point
When it does NOT make sense:
- You need consistent monthly returns
- Your available capital is less than USD 150,000
- You cannot handle 2-3 months of vacancy between tenants
Where to put USD 100,000?
With USD 100,000, a studio or 1-bedroom unit can give you a gross yield of 7.0% to 8.4% annually, a 2-bedroom between 4.8% and 5.4%, and with leverage on a 3-bedroom you reach 6.9% to 9.3% on your capital. Let's simulate how far that capital goes depending on what you buy:
Scenario 1: Studio or 1-bedroom unit
With USD 100,000 you can buy a studio or 1-bedroom unit in neighborhoods such as Centro, Cordón, La Blanqueada, or the Tres Cruces area. Average listing price: USD 80,000 to USD 110,000. If the rent is USD 600-700 per month, your gross yield would be around 7.0% to 8.4% annually. Expected annual return: USD 7,000 to USD 8,400 (before management fees, taxes, and maintenance). After deducting expenses, expect a net return of 5.5% to 6.5%.
Scenario 2: 2-bedroom unit
With USD 100,000 you can buy a 2-bedroom unit in more modest neighborhoods (Malvín, Punta Carretas, La Blanqueada, Tres Cruces area). Listing price: USD 95,000 to USD 130,000. Expected rent: USD 800-950 per month. Gross yield: 4.8% to 5.4%. Annual return: USD 4,800 to USD 5,400 before expenses. Expected net return: 3.5% to 4.2%.
Scenario 3: 3-bedroom unit with leverage
With USD 100,000 you cannot buy a 3-bedroom unit outright (they cost USD 180,000+), but you can put down 40% and leverage with financing. If you buy a property worth USD 250,000 with USD 100,000 down, financing USD 150,000 at 5% annually (USD 625/month), the rent would be USD 1,200-1,400. After paying the loan installment, your net monthly cash flow is USD 575-775. On your invested capital (USD 100,000), that is 6.9% to 9.3% annually. But you carry leverage risk: if the property is vacant, the expenses keep coming.
Conclusion
There is no single answer. It depends on your profile:
If you are an investor with limited capital (USD 50K-120K), low risk tolerance, and want predictable monthly returns: 2-bedroom units are your best option. They do not have the yield of a studio, but demand is more stable, they sell faster if you need to exit, and tenants stay longer.
If you are young, aggressive, and want to maximize yield even with more turnover: Studios and 1-bedroom units in high-demand neighborhoods (Pocitos, Centro, Cordón). Net yields of 6-7% are achievable.
If you have significant capital (USD 200K+) and a 10+ year horizon: A 3-bedroom unit in an established neighborhood (Pocitos, Carrasco, Punta Carretas) gives you more predictable appreciation, less operational hassle, and better risk diversification.
The trick: In Montevideo, the best strategy is often to buy 2-bedroom units with partial down payments across 3-4 different properties (diversification) rather than putting everything into a single 3-bedroom unit. You reduce tenant risk and multiply appreciation opportunities across neighborhoods.
You can explore more about where to invest in the best neighborhoods to invest in Montevideo and read our price vs. profitability comparison by neighborhood.
Frequently asked questions
How often is this data updated?
It is recalculated every month based on the current real estate supply in Montevideo, so it reflects the state of the market for the current month.
Where do these prices come from?
From INGAR's own survey of public sale listings in the Montevideo market, not from closed transactions: these are listing prices, a thermometer of what is being asked for today in the market.
Want to invest with data, not intuition? See how to invest in Uruguay, appraise a property online, or contact us on WhatsApp.
This data is part of the INGAR Index, the monthly index of the Montevideo real estate market, with a data sheet for each neighborhood and a public methodology.
Updated: July 2026. Source: INGAR analysis based on the current real estate supply in Montevideo.