Investing in real estate is always a good idea as it is the only constant asset, which has proven to give the highest returns on investments consistently. 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. Here are a few tips that will let you reap better benefits from your prized investment in the long run, especially if you want to add luxury properties to your investment portfolio.
Lifestyle quotient
Like every field of life, goal setting is very important before investing in a luxe 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
You must not splurge just because you can spend. Period. Though you are searching for a prized property and you might have deep pockets, 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 be unreasonable. 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 will depend. A luxury villa without proper infrastructure, a classy neighbourhood and with 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 and move ahead
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.
The writer is Director, Goel Ganga Development.
