It doesn’t matter what is happening to the economy as there will always be a market for luxury properties. In fact, this is one of the reasons why investors love these properties. Maybe it’s a multi-million-dollar house in Marbella, a stunning apartment in Monaco, a pre-war duplex overlooking Central Park. These properties have and always will be hot and here are six reasons why investors love luxury properties.
Status
Nothing says you’ve made it more than a multi-million-dollar home. Sure, you could buy a $2,000 suit or a Hermes handbag but there is no better way to tell the world that you’ve made it than to live in a luxury home. Not only is it because of the spacious grounds and the amenities but a luxury property is the ultimate status symbol.
Beyond the home itself there comes the status of living in an elite zip code (or postal code depending on the country) as well as the conveniences of a town with everything you could want to live out your version of lifestyles of the rich and famous. Just imagine owning a spacious home on the Connecticut coast and then going down to town for an espresso, fresh-baked French bread, or spending the afternoon in a designer boutique.
There are also financial rewards as high-end properties tend to appreciate in value faster than other properties. Granted these homes are starting from a higher base, but if you want to make money with luxury properties then buy high and sell higher.
One trick to make this happen is to purchase a less-than-stunning property in a luxurious destination and then work with a contractor to build the home of your dreams. Just make sure your contract keeps good records including construction time cards as this will ensure you spend your money on amenities and not the contractor’s profits.
Accouterments
The word just sounds luxurious, doesn’t it? Accouterments mean the added touches which help to make a home or an outfit. In the case of luxury homes, this means having all of the comforts of home and then some. Want a kitchenette in the master suite, you’ve got it. An outdoor kitchen for legendary barbecues, it’s not a problem. More bathrooms than you can count and all of the storage space you could ever need. This is what the luxury in luxury properties is all about.
But it doesn’t end there. When it comes to luxury real estate the finishing is everything. As such, corners are square, moldings are true, and the fixtures are the best that money can buy. After all, when you are already spending more than $1 million, or $2 million, or $10 million, for the home of your dreams what is a few thousand more to get everything right.
Imagine a home too big for Wifi but with a mesh network which will allow you to work seamlessly by the pool or in your bedroom. Remember time is money and the investors who buy luxury properties don’t have the patience for losing their internet connection – even for a moment.
Security
A home is your castle and for that reason, you will want to feel safe in your luxury hideaway. As such, investors make sure that their top-of-the-line homes also have the best security systems available. This includes redundant power supplies, sensors, cameras, and even the ability to monitor the home remotely.
In some cases, developers create villages of high-end homes and then offer added security as part of the value proposition. This is especially true in emerging markets where the gulf between the rich and everyone else is as big as the Grand Canyon.
The Company You Keep
While the only thing that matters when buying a luxury home is the number of zeroes in your bank account; the price tag alone sets a high bar to cross. Let’s face it, the cost of a luxury property is too high for most people and while this isn’t a guarantee that you will get an invitation to Davos, living in neighborhood full of luxury homes will expand your network.
Outsized Returns
The rich and famous will always need a place to live and for this reason, luxury properties tend to be immune from the ebb and flow of the broader economy. As such, investors love these properties – assuming they can get them for the right price.
One way to make this happen is to acquire a property that needs work in the right location and then bring it up to date. This approach will not only give you a chance to customize your home, but it will accelerate the resale value of the property. What better way is there to achieve an outsized return?