Investing in real estate is always a good move and choosing a luxury property is like a cherry on top. However, buying a dream home requires meticulous planning and responsibility. A responsibility to invest in the best for which you need to be very careful and demanding.
When investing, the affluent investor class considers several factors, including location, connectivity, proximity to the business center, potential return on investment (ROI), and regional development.
If you are also planning to buy a dream home or simply want to add a luxury property to your investment portfolio, here is a list of key things to consider before investing in a luxury property:
1. Location is key
Let’s make it clear. Luxury real estate investment requires a lot of money and HNIs do not lack that. However, while making a selection for this soft and high-end property, the wealthy class is looking for a prime location and an elegant atmosphere. A dirty and underdeveloped locality will be a strict No-No for investors. The luxury property should be located in a prime location with developed physical infrastructure, electrical facilities and a business environment. Connectivity to business centers and airports would be advantageous in this regard. Also, because money is not a constraint, research and ROI projections must be the foundation of such high net worth investments.
2. Connectivity quotient
The ultra-rich do not hesitate to spend money on a property with potential. However, the ROI potential of a property is highly dependent on a lot of factors and connectivity is one of the main ones. Luxury property owners belong to the affluent class of society and prefer to be in a prosperous and all-inclusive place. Adequate road connectivity, airport and railway station links and metro links are a sine qua non for luxury property owners. In fact, the very high price of the property is directly related to its excellent connectivity quotient with the main landmarks of the city.
3. Objective of the investment
There is no doubt that luxury property comes at a high price. Even if the investor has money to spare, the purpose of investing in a luxury property should be clear. It must be clearly defined that the property is being bought for own occupation or for rental income. If buying for self-occupation, factors such as social infrastructure and amenities must be up-to-date as this will directly affect the quality of life of the residents. If the property is bought for rental purposes, it should be close to business centers and the connectivity should be perfect. If the purpose of the purchase is clear, the investment journey would be smooth and the one consistent asset that consistently produces the highest ROI is real estate.
There is no denying that luxury real estate investors have deep pockets and a high budget at their disposal. Despite this, money cannot be wasted and should be invested wisely. Even if the investor has surplus money, he might want to make use of cheaper credit to buy a particular property. As banks are liberal with HNIs due to their good financial standing, they disburse loans almost instantly. The investor must have a plan to finance their prized possession.
In addition to the financial arrangement, the investor can also ask for the right price. Just because you have money you can’t buy at any price. In fact, you will get it at the right price and it can save you a few million on luxury property deals. Be aware of price trends in the region and trade accordingly.
In conclusion, luxury real estate investing is no cakewalk and requires thorough research as there is a lot of money at stake. If luxury factors such as location, connectivity, ambiance, physical infrastructure and social amenities are studied well in advance of investment, you may end up owning a luxury property that generates more ROI.
-Atul Goel, MD, Goel Ganga Group