While the elaborate designs and dazzling amenities of a luxury property are appealing, buying a luxury home includes the same number of pros and cons that you'd weigh when buying a more modest piece of real estate. Before you set your sights on owning a lavish living space, take a moment to consider a few of the things luxury real estate homeowners face.
Luxury homes are often highly customized and cater to specific interests. Fabulous features like at-home basketball courts, theaters, gourmet kitchens, multi-car garages, separate guest wings, and rooftop entertainment areas are highly desirable. Many of these homes are also ripe for customization, allowing the buyer to transform nearly any room into the space of their dreams. Simply put, luxury homes offer amenities that standard single-family homes and condos simply cannot offer.
Those who purchase a luxury estate often do so for the quality of life it affords. Many luxury homes are located within communities that feature their own world-class amenities like resort-style pools, golf courses, private beach access, fitness centers, restaurants, athletic fields, and so on. These communities are also often located within close proximity to highly desirable shopping, dining, and entertainment destinations. Keep in mind that when you buy luxury real estate, you buy a lifestyle. Private roof decks, swimming pools, common spaces with fitness centers, and maid service or hotel-style services distinguish luxury real estate.
High Cost/Loss of Value
Maintaining a luxury home can be a costly affair. Interior cleaning, exterior upkeep, and repair costs can all add up to tens of thousands of dollars over a few years. These are in addition to yearly property taxes, community fees, and other mandatory expenses. Luxury homes are not immune from the volatility of the real estate market. During unfavorable years, these properties can lose their value. There are also ways to lose your investment, even in a healthy market. There are a number of expensive upgrades or renovations that you may choose to complete that may not give you a noticeable return on investment.
The goal of investing in any real estate is to earn a return on your investment. When you choose luxury properties, consider the outcome that you want. For example, if you hope to turn a quick profit, you might focus on flipping. If you want long-term income, you might consider a luxury apartment or vacation home that you could profitably rent out.
Owning a luxury home is the ideal living situation for some families. For others, it can be a headache and ultimately a bad investment. High-end buyers desire many of the same features that all buyers want but on a grander scale. They want privacy and security, sometimes to the point of seclusion. They want beauty inside and out and can afford custom architecture, custom design, over-the-top attention to detail, and opulent finishes.
For more information, consult with a luxury real estate professional in our office.