It is not mandatory to have a home, there is nothing wrong with living for rent, each one must decide what is best for them.
While buying the dream home is a more emotion-driven decision, real estate investment is purely financial.
And the main issue is location, location, location.
The other things in the properties can usually be modified, but the location cannot be improved.
It may even happen that a good location gets worse or vice versa, but usually, in big cities, location is essential.
Another aspect is that small properties allow more diversification and usually have more liquidity and are easier to rent.
As a rule, it is better to have three one-bedroom apartments than to have a three-bedroom apartment.
Having three if one is empty, you have the other two to pay the costs in addition to having a larger potential population to rent and buy if you need to sell.
Of course, city and neighborhood conditions must be assessed, but smaller apartments are usually better for investment.