A Simple Guide to Investing in Luxury Real Estate
Luxury real estate often comes with a high price tag. A luxury real estate property is marked by elegant features, high-end amenities, unique designs. More importantly, luxury homes promote an exclusive living experience. While luxury real estate can range from an apartment to a fully furnished mansion, the differences mainly lie in the location, appeal, and luxury features that come with the property.
Prices of luxury properties have increased significantly over the past decade. In 2019, real estate prices were at an all-time high, with the most expensive luxury residential real estate in Manhattan selling for $240 million. Even though real estate prices in most cities went down during the pandemic, experts still saw a sudden increase in investments in luxury holiday homes.
Before investing in luxury real estate, it is important to first understand the market and the types of properties that suit the needs of different buyers. Generally, high-end property buyers look for areas close or with easy access to luxury shopping destinations, dining, and other luxury homes. However, others may prefer properties set amidst nature and with gorgeous views of mountaintops or the city’s skyscrapers. One common factor, however, is security. Luxury real estate buyers want properties with privacy and top-notch security measures.
One of the common ways to invest in luxury real estate is by flipping. Renovating an existing luxury home by adding sale-worthy elements that fit within the budget can be profitable. This includes changing the furnishings, architecture, and appliances inside a property. While competition is high for this strategy (considering most newly built luxury homes usually come fully furnished), flipping is still a great choice, especially for beginners.
Renting a luxury real estate property is another effective way to invest as a beginner. Some homeowners live in their luxury homes for a few years and eventually look for other places to move to. This is an opportunity to rent out a luxury home to people who want a taste of luxury without making a huge purchase. Renting also provides continuous income, as long as the property is well-maintained.
Luxury condominiums have also become popular in the past decade. Luxury condominiums are equipped with expensive interiors, high ceilings, and spacious balconies. The buildings also feature exclusive amenities, such as swimming pools, fitness centers, and hotel-style services. Luxury condominiums, especially those strategically located in major metropolitan cities, attract the lifestyle of modern elites.
Customizing a luxury real estate property is viable for investors who do not have time constraints. Building a luxury home is based entirely on the creative ideas and design of the investor. To ensure that the custom-built luxury property is easy to market for rent or sale, investors should add the most luxurious amenities catering to the needs of their target customers.
Investors can also look at the international luxury real estate market to identify new or untapped opportunities and diversify their investments. For instance, luxury vacation rentals are popular among people who enjoy traveling and experiencing a luxury lifestyle away from home.