Considering the surge in demand for condominiums, investing in a luxury condo can be lucrative, as condos offer a great return on investment. But not every condo in the market fits the bill. If it's poorly managed or inappropriately located, it probably won't offer the best bang for your buck. Keep reading for a few tips on investing in luxury condos.
Choose the Best Location
Location is a significant factor to consider when investing in a luxury condo. It's the one thing that remains constant about a property, and it can either drive or detract from the condo's value. For instance, if a condo is in an area undergoing industrial growth, it'll probably appreciate in value over the next several years as more real estate investors scramble for a few properties and more investors, entrepreneurs, and job-seekers move to the area.
However, suppose a rental condo is only a short drive from the city center and major attractions, but it's surrounded by other rental properties tenants could pick, or it has superb amenities, but it's next to a noisy highway. The demand for it won't be as high as it could otherwise be. That is why it's essential investors choose a premium location.
Consider the ease of accessibility to a condo's location. It should be close to major routes and public transportation options and, if possible, be in a neighborhood with desirable community spaces and landscapes. Consider the exact lot location, too, as future neighbors such as commercial properties, new parks, other housing options, etc., could affect the condo's value.
Look for Prime Amenities
Most people invest in condos not just for their luxurious feel and sense of communal living but also because they're often in condo communities with excellent amenities to offer. So, whether investing in a luxury condo to live in or to convert into a rental, consider the amenities available.
Properties with amenities such as a swimming pool, fitness center, balcony access, or huge yard spaces are often attractive to buyers, increasing demand during resale. Also look for features such as condos with rooftop pools, high terraces, private roof decks, tennis courts, and other prime amenities to distinguish a condo property from those around it. These will make it more attractive to potential renters, drive value, and speed the closing process when it's time to sell since it'll have high demand.
Decide if You Want to Rent
There are multiple ways to make money off a condo as a rental investment. If it's in a location popular with tourists, one can always rent it out as a short-term vacation rental. Condos can also be marketed as long-term rentals to tenants looking for a primary residence.
Short-term condo rentals, especially in a prime location, can offer excellent profits and give owners the luxury to access the property as needed, such as for a vacation. However, running a condo as a short-term vacation rental means demand may be lower during the off-peak season. For instance, the demand will typically be seasonal in a beach location, as most tourists prefer beach vacations in the summer. Also, the owner typically needs to be a hands-on landlord or hire a good property manager, since guests change often. This can be time-consuming and taxing if one has never managed property before.
On the other hand, long-term condo rentals provide a more stable source of passive income, since most people looking to rent a condo for a home are often willing to sign a longer lease. On the downside, owners cannot access the property as they wish. So, before investing in a luxury condo, buyers should consider whether they'll rent it out or not and, if so, whether a short-term vacation rental or a long-term one would suit better. Both strategies can yield enough rental income to cover maintenance costs and offer excellent profits with careful investing.
Views Drive Value
Views are everything when it comes to condos. This is because when someone buys a condo, they're essentially paying for the interior space and the view, as the exterior areas are typically association-owned. That means if purchasing a condo in a high-rise condominium block, the view it offers will be the key driver of its resale value in a few years, as all condos in the building may share the same amenities. A condo with amazing skyline views can be worth far more than even condos in the same building with lesser views.
So strive to get a luxury condo with great views and find out if the view is protected. This is essential because if commercial or other residential properties start coming up, they may obstruct the view, consequently affecting value. Another great way to invest in luxury condos is by looking for properties with excellent view potential and renovating them with features such as large floor-to-ceiling windows or an open deck to create unobstructed views.
Make Smart Luxury Condo Investments
Investing in a condo property comes with a few added advantages over other real estate investments. For instance, maintenance is often a breeze since an association handles much of it. Condo communities also feature shared amenities that foster a sense of community. Since there are association rules, chances of buying next to noisy, annoying neighbors are pretty low. Most importantly, condos are generally more affordable than other housing types and offer quite attractive returns. However, to reap such benefits and make a smart investment, one needs to prioritize factors like location, amenities, and views a condo has to offer.
The Ashton Real Estate Group of RE/MAX Advantage
The #1 RE/MAX team in the World!