An efficiency apartment is one of the smallest and least expensive apartment rental options on the market. Also called a studio apartment, it's an open space concept design that incorporates the sleeping and living space into one area. The other two main features of an efficiency apartment are an enclosed bathroom and a kitchenette -- a small, open kitchen area. Occasionally, efficiency rentals have no kitchen at all.
The biggest advantage to renting an efficiency apartment is the relatively low cost. The cost savings over a one bedroom apartment can be anywhere from 15 to 30 percent. Energy costs can be slightly lower too. The rental or lease agreement involved can be a standard yearly lease or run from month to month. Even week-to-week rentals on furnished spaces are available in some areas.
Choosing a studio apartment or "efficiency" over another option is typically a cost cutting move, and it won't appeal to everyone. Floor plans can vary significantly from city to city and building to building, as can the number of closets and the overall square footage. Some units may come with additional storage in a basement or garage space too, making them slightly more flexible.
Renters who are just starting out may have fewer belongings and be able to adjust to the limited accommodations best. For recent grads, it may be a particularly good choice. A living space that doesn't need much in the way of furniture may be ideal for a while. Renters who entertain regularly or have accumulated their fair share of stuff may discover that the space is too restrictive.