Buying luxury real estate can be better than having money in the bank
If you’re investing in a good area, buying luxury real estate will always provide you with a good capital gain making it a wiser choice then leaving your money in the bank. Enlist luxury house builders in Melbourne to construct a brand-new home with all the comforts or buy an established home in your chosen-up market area. Either way, the potential for a substantial profit is great.
Beyond monetary growth, buying a high-end property will enable you to enjoy several lifestyle benefits such as a pool, a five-star kitchen or a bathroom that will rival any top hotel. Entertaining and hosting extended family and friends is made more pleasurable when you’re in a home with all the luxuries.
A luxury home will also yield a greater rental return if you choose to purchase a high-end property as a rental investment. It also typically attracts an upmarket tenant who’s likely to look after and maintain the property well.
A luxury home can be the key to a comfortable retirement
For many, building a real estate portfolio is crucial in achieving a comfortable retirement. It’s estimated for a couple in Australia to enjoy a reasonably comfortable retirement they’ll require about $640,000 in savings. For those who wish to live a more elaborate lifestyle or leave their children an inheritance, they’ll obviously require a greater nest egg.
For many, this is not going to be achieved through super and employee savings alone and investing in luxury property may be the key. In a situation where you’ve purchased a high-end home in a well sort after area known for its growth, you could make enough to live comfortably during your later years.
When you near retirement, selling the property may give you ample profit to purchase a smaller home and cover the cost of living when you retire. If your kids are lucky, they may even enjoy a generous inheritance out of the sale.
Buying a luxury real estate investment all comes down to timing
It’s easy to see why high-end purchases like luxury double storey homes have the potential of being a great investment. Quality products typically retain their value over a greater period than average or poorly made products.
Take a car for example, a European car with a great brand and constructed of quality parts is more likely to achieve a higher resale price down the track than a cheaper made vehicle. Same goes for furniture, homeware goods, jewellery, and clothing.
But timing plays a huge part in whether investing in luxury real estate will pay off. You need to ensure you don’t over-extend yourself so you can hold onto the property during any volatile times. If you’re forced to sell a property during a market down turn, you may suffer a financial loss. Making sure your finances are in check and you’re purchase in the more attractive, established areas will help ensure your luxury real estate investment is a good one.
Interesting thoughts there.
We don’t invest in real estate (anymore) but we did used to live in a luxury house. It was a three-story deep-water waterfront with a dock and everything. We only stayed there a few years when decided to downsize when our daughter left for college. When we sold it we had enough equity to pay cash for something smaller.
From that experience we realized 1) even at the same appreciation rates, you of course gain a lot more in actual dollars over time from a higher priced home and 2) “luxury” homes seem to appreciate faster than lower-priced homes. There aren’t as many of them so supply-and-demand works toward the owner’s favor.