Whether you’re buying an apartment to rent or flipping over a house, real estate has always been seen as a safe investment. That same logic applies when investing in luxury properties. The only concern with luxury investments is the higher financial outlay and potential costs.
And that means for many high-end investors, there is a slight trepidation when buying luxury properties. Is it worth it? What are the risks that I’m taking? What should I expect when investing in luxury real estate?
To calm down any nerves you’re feeling, we have created this ultimate guide on why luxury properties are well worth the investment.
Your Guide To Investing in Luxury Real Estate
What is Luxury Real Estate?
One thing that must be said about luxury real estate is that being expensive doesn’t make it luxurious. The property must be unique, exclusive and perceived as superior to others. Only then can it be considered a luxury property.
Significantly, the property should be in a local hotspot, whether that is in the heart of the city’s downtown or obscure in the suburbs. It should be close to luxury activities and amenities, such as high-end shopping, dining and the arts. Or it can be hidden away in a lush meadow that offers peace. The property or building has to be in a spot where it’s desirable for many high-end individuals, not just placed somewhere special.
High-end investors and buyers want everything that regular properties offer – only better and on a grander scale. The likes of privacy and security, customized architecture and design, top-of-the-line detail and high-quality finishes and living standards are a must.
For apartments, investors also want amenities that make their lives easier: pools, fitness and gym facilities, dog washing stations – the list goes on and on. The apartments must have the latest appliances, all in the confines of a stylishly designed floor plan.
If you ever drive through Eagle Ridge, Roxboro or St. Andrews Heights in Calgary, Canada, you’ll see what we’re talking about when we mean opulent properties. As for apartments, check out The Metropolitan as a prime example of a luxury apartment.
What are the Benefits of Investing in Luxury Real Estate?
There are a few key reasons why investing in luxury properties – homes or apartments – is worth it. Read our list below:
- You invest in a desirable lifestyle. You’re not just investing in the property; you’re investing in the lifestyle that comes with it. For many people, that’s the biggest drawcard. It’s not always about the property, but what living in the property can do for them. It’s why luxury properties are such a wise choice for many.
- You have the best of everything. Why wouldn’t you make money down the line if everything that is part of your home is top of the line? High-end and high-tech amenities and appliances, idyllic locations and surroundings, amenities and services that cater to your every need are what luxury buyers want. Having the best of everything means your property becomes the one that everyone wants.
- A better return on investment. The above two points highlight the importance of the third: a bigger and better ROI. While real estate always tends to be a riser in value and a safe investment, luxury properties follow the same logic – only, of course, bigger. Luxury real estate tends to have a steeper rise in price gains and lower drops. As you’re targeting a particular market (high earners), you’re more likely to be able to make money compared to common properties.
- Ongoing cash flow options. It’s not all about the selling either. You can use your house or apartment for rent. Placing your luxury property on the rental market is a great way to maximize its potential, as you’ll earn a steady cash flow and income. In many cases, you can exclusively rent it out as a luxury trip (AirBnB style) during the peak seasons. The best thing: its value and quality mean you’ll get the money you ask for without hassles!
Bottom Line: Should I Invest in Luxury Real Estate? YES!
Investing in property, as we mentioned at the start of this article, is a safe investment. With luxury properties, it’s even more safe, secure and valuable.
Its tangible nature means that you can secure your investment for decades, slowly increasing its value, before selling it for a profit (if you want to, of course). As the above benefits highlight, luxury properties are well-worth investing in.
When considering your investment, take the time to do some research into the property itself and speak to a realtor specializing in luxury properties. They’ll be able to guide you on your journey to becoming the owner of a luxury property.