Abode2 How2 – Investing in Luxury Property

Investing in real estate is always a good idea as it is the only constant asset which has usually given the highest returns on investments. When a serial investor is looking to diversify his portfolio, they are extremely careful about the micro markets, product and pricing of the projects under consideration to be able to seek high returns on the same.

Gunjan Goel, Director of Goel Ganga Developments, offers 5 top tips to reap higher returns from your priced investment in the long run and add luxury property to your investment portfolio:

Clarity about the Investment Purpose

Like every field of life, goal setting is very important before investing in a lux property. Ask yourself the pertinent questions. Is it for the return on investment (ROI) purpose or for self-use? Do you wish to earn a rental income from the property? If you wish to make a quick buck, location becomes very important and you might have to invest in a more popular location. However, if you wish to reside in a luxury property, does it have all the amenities and infrastructure suiting your lifestyle?

Asking the right questions might help you identify the right property, at the right price and at the right location.

Money Matters and Financing

You must not splurge just because you can spend. Though you are searching for a priced property and you might have deep pockets but it is always advisable to set your finances in order. You must be clear with the source of money. You might want to use the surplus money or you might avail of bank credit to buy the concerned property. It must be clear in your mind. If the purpose of your investment is resale, you might avail of a short-term loan, renovate the premise and resell it. Short-term loans are easier to get and repay than traditional loans. However, the rate of interest might be high.

Additionally, you must bargain. Just because you have the money does not mean the price should not reasonable. After all, it is an investment and money saved is money earned. Bargain professionally and grab the best deal.

Location is Paramount

It is a given that in all property investments, locations remain the second most important factor after finances. It is the location on which the ROI potential of the property depends. A luxury villa without proper infrastructure, classy neighbourhood and civic problems will remain a liability and will fetch very poor or negative returns, even after years. Choose the location of the luxury property wisely as in high-end realty transactions, location decides the present and resale value of the property.

It must be ensured that the luxury property is closer to the city (Closer the better) and the neighbourhood matches the class you aspire to live with. A palatial villa in an underdeveloped location is nothing more than a liability.

Research Before You Invest

Herd behaviour can be very risky in cases of luxury property investment. Just because your dear friend is investing in a location without research does not mean you should too. You must perform comprehensive research about the previous property appreciation trend and future expectations from the region. An upcoming metro line can be beneficial, but an upcoming airport might lead to land acquisition by the exchequer. After all, it is an investment, a pocket-heavy one and you must be clear with all the nitty-gritty involved.

Brand Value is Key

When it comes to luxury, we are well aware that one does not mind paying an extra premium for a branded product. This is because it comes with a huge amount of trust in quality and longevity of the product. Similarly, one must not be carried away by lucrative steal offers or discounts when it comes to investing in luxury homes. One must evaluate the brand value of the developer and trust those who have a track record of consistent delivery and quality. Conclusively, the luxury property investment is a pocket-heavy decision and being doubly sure of the location, pricing and amenities might go a long way in determining the ROI potential of the property.

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