What You Need to Know About Luxury Real Estate
Luxury real estate prices are continuously rising in some parts of the world. It doesn’t take a rocket scientist to figure out that it’s a big industry that’s still ripe for the picking for those who are willing to take a leap. Whether you’re thinking of renting luxury villa rentals in St. Barts or premium rental properties in New York, luxury real estate is definitely worth considering as an investment.
It is important, however, that you know what you’re getting into. There are many resources on the Web that discuss luxury real estate in great detail. This might overwhelm you, so we have prepared a brief yet informative list of things that you have to keep in mind before you invest in high end real estate.
You have to understand what a luxury property is before you start investing in it. In the most basic terms, it’s a property that’s unique, high end, and exclusive in the most positive way. You are likely going to rent this property to businesspeople and wealthy retirees who are making or have made at least six figures or more. There’s an occasional tourist that’s interested in splurging for a weeklong trip they’ve been saving up for, as well.
The exclusivity contributes much to the price tag of a luxury property. If anyone can get what you’re offering from two or more places, the mystique falls apart. If the property can’t benefit from the surrounding landscape, then you have to find innovative ways to make it stand out. You can provide irregular amenities that boost customer experience or feature architecture and design that won’t be seen elsewhere.
Mansions and Villas
If you’ve bought a luxury property in the form of a mansion, turning it to a rental villa can allow you to make more money compared to a one time profit after flipping your property. Having a rental villa in a tourist destination will provide you with a guaranteed income on a season-by-season basis.
You also have the benefit of talking directly to potential customers where you can bounce ideas off of for future additions to the villa. The only downside to this is that you have to compete with services such as Airbnb that outsource their locations.
Renting out a luxury condominium is different from renting out a regular condo. Most luxury condo owners add their own perks on top of the services already provided by the condo’s association. This may include cleaning services, high tech appliances, a full service kitchen, and laundry services. Due to the nature of high rise condos, it’s important that you look at the value of the property and try to predict its trajectory 5 years at a time.
A luxury condo in the middle of a busy city might sound like you’ve found gold, but you’re going to have a tough time finding someone to rent it out to if the transportation options are limited.