Are You Ready To Buy A High-End Property?
Affordable may be the most-used term in India's real estate these days, but there is not a dearth of admirers of luxury either. Those moving up the social ladder are acutely aware that the sizes of their homes must to grow accordingly; the amenities in these bigger houses must be different, too. For instance, most real estate projects these days offer buyers the luxury of a swimming pool, a gymnasium and a tennis court. Hence, these amenities are more of a common feature than a luxury in the current scenario. A rooftop terrace that gives you the luxury to throw fun-filled parties, on the other hand, is not a common amenity. So are not VIP rooms or glass elevators or fancy kitchens.
However, it is not only the high price tag that a luxury property comes with, there are many other associated costs involved. And, lovers of luxury have to be mindful of that.
To begin with, you may find it hard to find someone who shares your taste for good things and is willing to pay a premium for it, in case you want to sell the property at a later stage. This is a trend seen worldwide. Landlords of premium properties in UK capital London, for instance, are facing similar issues.
"Luxury-home owners in London are turning to companies such as Airbnb and brokers like Xenyos to secure income as their properties languish on the market. Others are trying to boost leasing income with shorter contracts after long-term rents in the most expensive districts fell 5.1 per cent in the year through February. For overseas landlords, the devaluation of the pound is also hurting their returns and prompting them to look for ways to generate revenue,” says a Bloomberg report.
Across the globe, it is the middle class that drives real estate markets and they naturally go for affordable housing. This also means that this is the segment where property values quickly rise, precisely the reason why high-net-worth individuals with an eye on earning quick bucks park their money in the affordable segment. On the other hand, expectations of quick appreciation in value of a luxury property might also end in disappointment.
However, there is also the surety of earning a good rental yield with such properties. Those who cannot afford luxury otherwise would certainly try to rent it, as is evident from the London example. Data show while affordable properties generate an annual rental yield between two and three per cent, it could go as high as five per cent in case of a premium property. So, as long as you are investing in a luxury property to live a king-size life or earn a good monthly rent, it is a brilliant idea. The property value would also appreciate with time and patience would be the key to reap the full benefits of this change.