What should you keep in mind for luxury real estate investments?
- Types of luxury real estate investments
- Importance of studying the market
- Appropriate design is key
Luxury homes in the Philippines are not common. In fact, luxury real estate is something that only the most elite can get themselves involved in. Whether you’re selling a luxury home or putting it up for rent, it will be difficult to find potential clients.
If it were regular real estate, the level of difficulty won’t be as high. However, since you’re dealing with deluxe homes for sale in the Philippines, you also need an increased level of expertise in order to go through with a sale.
The thing is, regular real estate is way different from luxury real estate. It’s important that the proper steps and strategies are implemented in order to ensure that a house is sold in a timely fashion and at a fair price!
Types of Luxury Real Estate Investments
When it comes to real estate, more often than not, your goal will always be to make money; to earn a return on your investment. For luxury real estate, you can earn a profit through the following means:
Real Estate Appreciation
The most common way to make money off of luxury real estate is when the property increases in value over time or due to a change in the real estate market. This usually happens when the land around your property becomes scarce or the area near or around you is bustling with activities (such as a commercial center being built next door). It can also increase in value when you implement upgrades to the estate. However, you will only get a profit when you make a successful sale.
Cash Flow Income
With this type of real estate investment, you can focus on collecting rent from luxury homes, condominiums, or apartments. You will be the one to operate on it for simple things such as housekeeping. The cash flow will start when you begin to have tenants. This kind of real estate investment is more reliable than when you use real estate appreciation.
Real Estate Related Income
This kind of endeavor is usually done by professionals of the real estate industry. That would include brokers and agents that make money through commissions from buying and selling properties. This also includes real estate management companies that get a percentage of their rents in exchange for running day-to-day operations for the property.
The Importance of Studying the Market
Luxury real estate, as its name implies, will never be cheap. Investing in it will cost a large sum of money. However, when you do your homework correctly, the gains will be well beyond what you put into it.
That’s why it’s incredibly important for you to be careful when you do your research. Be mindful not just about the people that you’ll be planning to sell to, but also about the place where the luxury home is located.
These two factors, along with the quality of the property itself, are the major considerations that most people look at to appraise the value of estates. The better you appeal to their needs and wants, the more they’ll be willing to pay you for it.
Make sure that you understand the surroundings of the estate or the luxury house that you’re selling. Use that as the main selling point of the luxury home. For example, the place may be near a popular commercial district, or it’s in an exclusive community, or it might even be in an area that’s isolated, giving off a surreal and private feeling.
Appropriate Design is Key
You may have a property in an incredibly ideal location. However, what it looks and feels like is probably far from what the market wants. Chances are, they won’t even consider buying your property unless you are willing to drastically change its whole appearance.
That being said, both interior and exterior design are vital in making sure that a property that you’re selling meets the standards of your potential customers. That means not only making sure that it’s exterior is aesthetically appealing and functional, but the interior is fully furnished with the best possible equipment that they might need as they live in it.
Think of luxury real estate investments as more lavish and expensive real estate investments. You’ll be dealing with mansions, estates, penthouses, and sometimes even giant plots of land. When it comes down to it, however, buying and selling luxury homes in the Philippines is the same as any other real estate purchase.
The key here is that there’s a wholly different market, market value, and price boundary—which can either be advantageous or disadvantageous to you depending on how your own investments pan out.
That being said, luxury real estate investment can be great as a secondary or your primary source of income as long as you know the ins and outs of what you’re doing.