Planning to buy your dream home? Four key things to consider before investing in a luxury property

Investing in real estate is always a good move and picking a luxury property is like a cherry on the top. However, purchasing a dream home requires meticulous planning and responsibility. A responsibility to invest in the best for which one needs to be extra careful and choosy.

While investing, the rich investor class considers a variety of factors including location, connectivity, proximity to business centre, return on investment (ROI) potential, and regional development.

If you are also planning to buy a dream house or just want to add a luxury property to your investment portfolio, here's a list of key things you must need to consider before investing in a luxury property:

1. Location is the Key

Let’s put it straight. Luxury property investment requires a huge sum and the HNIs do not lack this. However, while making a selection of that suave and high-end property, the rich class look for a prime location and classy ambience. A filthy and underdeveloped locality will be a strict No-No for the investors. The luxury property must be situated at a prime location with developed physical infrastructure, power facilities and a business ambience. Connectivity with business centres and airports would be advantageous in this regard. Moreover, as money is not a constraint, the research and ROI projections must make the basis of high-net-worth investments of this kind.

2. Connectivity Quotient

The ultra-rich class does not hesitate in spending money on a property with potential. However, the ROI potential of a property is highly dependent on a bunch of factors and connectivity is one of the foremost of them. The luxury property owners belong to the affluent class of society and prefer to lie in a prosperous and all-inclusive locale. Proper road connectivity, linkages with the airport and railways station and metro links are a sine qua non for luxury property owners. In fact, the very high price tag of the property is directly related to its superb connectivity quotient with leading landmarks of the city.

3. Goal of Investment

There is no doubt that luxury property comes with a heavy price tag. Even if the investor has money to spare, the purpose of investment in a luxury property must be clear. It must be well-defined that the property is being bought for self-occupation or for rental income. If it is bought for self-occupation, factors such as social infrastructure and amenities must be up to date as this will directly affect the living quality of the residents. If the property is purchased for rental purposes, it must be near the business centres and connectivity must be seamless. If the purpose of purchase is clear, the investment journey would be hassle-free and the only constant asset that consistently produces the highest ROI is real estate.

4. Finances

There is no denying the fact that luxury property investors do have deep pockets and they have a high budget at their disposal. Despite this, money cannot be wasted and must be invested prudently. Even if the investor has surplus money, he might want to avail of cheaper credit to buy a certain property. As banks are liberal with HNIs due to their sound financial condition, they disburse loans almost instantly. The investor must have a plan to finance his prized possession.

In addition to the arrangement of finances, the investor can also ask for the right price. Just because he has money he cannot buy at any price. In fact, you will get it for the right price and might save a few crores in luxury property deals. One must be aware of the price trends in the region and bargain accordingly.

Conclusively, luxury property investment is not a cakewalk and requires thorough research as a lot of money remains at the stake. If luxury factors such as location, connectivity, ambience, physical infrastructure, and social amenities are researched well before the investment, you might be the owner of a more ROI generating luxury property.

-Atul Goel, MD, Goel Ganga Group