A profitable investment that can be diversified
Who has never dreamt of being the lucky owner of a futuristic property or a middle-aged castle? Luxury real estate appears today as the most profitable, but also the most lifestyle investment!
While generating significant rental income in the short term and capital gains in the medium and long term, the purchase of a luxury villa, even more than a financial investment, gives you access to the luxury "Holy Grail".
Because of the strong emotional charge conveyed by a prestigious property, upmarket real estate embodies one of the rare sectors where a simple "crush" can lead to a sale while thwarting price predictions. A sumptuous view, a designer swimming pool, a cocooning room, magnificent living spaces... among these many reasons, only one of them can seduce, and thus lead to the act of buying.
In luxury real estate, it is sometimes possible to double one's stake and become a multimillionaire. By accessing his investment immediately, we come out, no matter what happens, a winner of this investment.
Courted by private bankers from all over the world, the restricted circle of UHNWI appears accessible thanks to luxury real estate. Indeed, it is the favourite investment of millionaires owning two to three prestigious properties, according to a study carried out by Coldwell Banker Global Luxury, which is part of one of the most prestigious agencies at the national level but also worldwide.
A fun investment, a risk-free investment
Which person would like to display their stock portfolio on social networks? Today, no one wants to. A beautiful property is to live in every day, it is shared on the networks but also with family and friends. Indeed, through luxury real estate, the investment reaches a more human image, where fortune becomes perceptible.
According to Laurent Demeure, President of Coldwell Banker France & Monaco "Although luxury real estate is considered stable, the secret of success lies in the moment when the purchase is made within a market circle [...]. It is essential to ask a specialist for historical data on a specific location, but also on everything that is happening in the city or neighbourhood".
In real estate, it is easy to assess the risks and the potential for profitability. Indeed, the sector's data is public and easily accessible, so it will help anticipate price corrections.
A profitable investment in the short, medium and long term
It is essential that an investor is aware of the length of time he wishes to keep his investment.
In the short term, i.e. 3 to 4 years, the investment should be made in areas with high potential for expansion, with returns ranging from 15% to 25%.
In the medium term, i.e. 5 to 10 years, the investment is made with the aim of creating a real estate portfolio with rental income and a potential for resale at the end of the cycle.
Over the long term, i.e. 15 to 30 years, the investment enables the consolidation of the estate for the purposes of family transfers.
However, vigilance with regard to the objectives and the resulting analysis: sought-after spots such as New York, London or Paris are considered attractive for the purchase of luxury goods and the preservation of wealth; however, inheritance tax is extremely high there.