No investment portfolio is complete without at least a few pieces of real estate. Investors have a lot of options when it comes to strategy, though. They can buy commercial properties or residential homes, mid-range apartments, or luxury townhouses. Read on to find out why luxury rental units are the best option for most investors.
Easier to Rent Out
The purpose of having a rental property is to generate a consistent stream of income. Luxury properties are easier to rent out than mid-range homes or apartment buildings. The right property will already include all the upscale amenities, finishes, and appliances that appeal to young business professionals and other wealthy renters, so as long as investors work with good property management teams, they should have no trouble keeping the units full.
Lower Renter Turnover Rates
Dealing with a revolving door of renters can be a huge hassle for property managers and can cut into investors’ bottom lines. Apartments or townhouses must be thoroughly cleaned and sometimes renovated between rentals, and if the market isn’t right, they could go empty for weeks or months before the property manager finds a new renter. Luxury units attract better tenants that are more likely to put down roots and stay for longer, especially if the property offers them all the amenities they need.
Luxury rental units are always located in prime urban locations. That’s good news for renters and investors, alike. It means renters will be more likely to pay premium prices for their accommodations and that investors will be able to make more money if they decide to sell the properties later down the line.
The options available from NRIA span the East Coast. They range from Philadelphia to Brooklyn and from New Jersey to Florida. This gives investors who choose to work with the firm plenty of options in terms of where they want to put their money to best lay a foundation for future growth.
A Stable Investment
Solid real estate investments are stable and safer than stocks, currency, or even gold. This makes luxury real estate investing a good way to diversify just about any portfolio since it acts as a hedge against inflation and stock market volatility.
Make More Money
The luxury real estate market has steeper ups and downs than other types of rental properties, but that’s not a bad thing. Savvy investors who choose wise points to buy within the market cycle stand to make a lot of money. They just need to be prepared to hold onto the properties for long periods to ride out any potential market volatility.
Multiple Forms of Income
Even if market downturns force investors to hold onto their luxury rentals for longer than anticipated, they’ll still be making money. Housing is a necessity, not a luxury, so business professionals and others committed to maintaining a certain lifestyle will always need to have accommodations. The combination of rental income and property equity creates a perfect solution for just about any investor.
The Bottom Line
Luxury real estate investing is a great way to diversify a portfolio and reduce the risks associated with the stock market or currency investing. Those who are new to the industry need to find investment firms they can trust and should plan to hold onto the properties for some time to ensure their financial futures.