Investing in real estate has long been considered a rewarding and exciting opportunity. Even for those that have been in the property game for a while and have built up a respectable property investment portfolio, now might be the ideal time to move up to the next level. With the right level of experience, upping your game with an investment in luxury real estate could be the single step you take this year that sets you up for financial success.
As with any investment, naturally there are risks involved, leading some to believe that luxury real estate is not a worthwhile investment opportunity. However, for those able to navigate these risks effectively, and invest smart, they’ll find a wealth of opportunity and high returns.
While there is no ‘one size fits all’ strategy to luxury real estate investing, there are a number of important aspects to bear in mind to help set you up for success. Here, we outline just what they are, as well as exploring why luxury real estate is not just a good, but a great investment choice.
Despite all that happened in 2020, luxury property prices remained strong across a variety of different property types.
Those that invested in UK country homes found particular success, with a 7.9% increase in value year on year, according to data from Knight Frank. And even with the Coronavirus still playing a prominent part in our lives, these rising property prices are set to continue. One report from Dexters expects a rise in demand from overseas and domestic buyers alike – with a property value increase to boot. For example, estate agent Rightmove estimates an increase of 4% in their latest report for 2021.
The location of luxury real estate is arguably one of the most important factors that can impact its price in the long run, so it’s well worth doing your research. For those with little experience in high-end property, it can be easy to imagine that the best luxury real estate is only available abroad. While investing abroad is an option, it does require knowledge of the housing markets in the countries you wish to invest in.
In addition, you’ll need to have a good understanding of the location itself; after all, unless you are well-versed in the intricacies of overseas housing markets, it can be difficult to determine how likely the property will be to generate a good return on investment.
The alternative is to invest closer to home. If you live in the UK, there are plenty of luxury investment property opportunities available. You just need to have a good grasp on where in the UK offers the best chance of securing a property at a good price, in an area that is likely to appreciate over time.
Naturally, London is a popular choice with both overseas and domestic property investors. The borough of Islington has seen the biggest average price increase across the UK in 2020 (13.4%). For those that prefer things to be a bit quieter, there’s no lack of exciting UK locations that would be a perfect investment choice to create your luxury real estate portfolio.
Once you’ve decided on a location, the next big decision you’ll need to make is whether to buy a pre-existing investment property and work with a property developer to improve its value or start from scratch with a bespoke new build.
As for which is better, that largely comes down to not just how much money you’re willing to invest, but also how much time. Going the bespoke route will naturally take much longer. But, while the upfront costs will likely be higher than upgrading an existing property, building your own could see you make more profit when it comes to resale.
Regardless of your choice, you will still need to look at ways to help increase the value of your investment property over time. One of the best ways is through adding additional elements and features to make it even more luxurious.
We’ve previously spoken about how the addition of a games room can add an additional layer of luxury to a property, but what you choose to add is ultimately only limited by your imagination. A heated outdoor swimming pool? A home cinema, perhaps? Or maybe you have sustainable living in mind, and want to opt for an eco refit with renewable energy sources?
Whatever inspires you, investing in your property is a great way to help ensure a successful return on your investment. And, of course, if you find yourself lacking in inspiration, you could always rely on the advice and support from a trusted property developer.
Moving into the world of luxury real estate can feel like a big leap from other forms of investing, but those prepared to put in the time can enjoy greater returns as a result of their investment.
Interested in finding out more? Whether you’re looking to purchase an existing investment property or are looking for a bespoke build, our team at Aspire is here to help you every step of the way. Contact us today for more information.