Before we go any further, this article is not pitching a get rich quick scheme. Instead, it will outline some simple strategies that the average person on the street can invest in real estate. Keep in mind, these strategies might not be for everyone and if you have a hard time controlling your finances then the you might want to read this article on how to simplify your home budget.
Now that we have that out of the way, let me explain why you might want to consider investing in luxury real estate. For starters, it is a hard asset and one that is usually well-positioned to withstand an economic reversal.
Second, the legion of the world’s richest is continually growing. I know it might not feel that way when you drop your kids off at school but you never know which one of those parents is a successful business person or investor.
That being said, there are five important things that you need to know about investing in something like luxury condos. Ok, maybe a sixth, as a small piece of advice is that just not all luxury properties cost $1 million. In fact, many properties are considered ‘luxury’ due to their location or some other characteristic which helps it to stand out from the crowd.
- Find & Flip
Now, this approach does require some work – both research potential properties and to get them ready for resale. But you want to know a secret, even ‘rich’ people run into problems with money every now and then. When that happens, many will choose what is known as a strategic default and this opens the opportunity to buy what would normally be an expensive property on the cheap.
However, there is a lot of skill to this approach and if you are considering getting into the flipping game, then you will want to take some time to study the market and to build up your contacts. This could include connections in the property tax office, local banks, and even with the contractors who will help you to get a market ready for resale.
In addition, you should be willing to do much of the dirty work yourself as this will reduce how much money you will need to invest in a property – leading to more profit for you.
- Consider Condos
For starters, condos are smaller than homes, so if you find the right property it will probably cost to prep for resale than a home. Also, these condos tend to be in well-managed buildings in prime locations and this will and tens of thousands to the sale price. Another item to consider is that these buildings generally tend to have many services for their tenants including gyms, restaurants, even a dry cleaner all on site.
A final thought about condos, all the work will be inside. This means you don’t need to worry about expensive roofing projects or landscape gardening. Not only does this reduce the time needed to prep a property but it also means that it is easier for you to scope out the work that will need to be done.
- The Grass IS Always Greener
Let me explain. We live in a global world and there is no law that you can only invest in luxury properties in your hometown or even your own country. In fact, investment in an exotic location might have a lower upfront cost than anything you can find closer to home.
There are several things that you will need to consider. First, is whether the country you have targeted allows foreign property investment. You see some emerging markets restrict the right of foreigners to own property. As such, you don’t want to make the mistake of investing in a country where you will need a dodgy, and complicated, legal structure own a property.
The second thing that you will need to consider is how you can find, and repair, the property you have in mind. Fortunately, the internet can help with targeting but construction being what it is, you will need to find a way to be on site during the renovation phase. If not, the costs will sky rocket and your project will never be completed.
- Find a Partner
Maybe you have a friend who is already investing in real estate, or maybe it is known developer with a track record of success. Either way, there are plenty of ways to invest in real estate without owning the entire property, and I am not talking about timeshares either.
- Buy & Upgrade
‘Luxury’ has less to do with the property’s cost and more to do with the amenities and the location. As such, you can look for opportunities to buy and upgrade a property. Who knows you might be able to sell it or you could let it out on Airbnb or similar sites.