Most of the time, real estate investing programs teach us to stick to midrange homes. Some investors even focus on the cheaper end of the market with lower-priced properties. They do this since the costs are more manageable, and thus the probability of finding potential buyers is higher.
However, we believe that the best opportunities are in the higher end of the market. Flipping luxury homes is a significant window of opportunity to bigger and easier investing profits! Although it may come with numerous challenges, the pros outweigh the cons. To elaborate, here are reasons why flipping luxury properties is a lucrative idea.
Luxury properties are better-maintained than midrange homes.
Luxury homes tend to be better-maintained and more protected compared to mid-range non-luxury homes. Thus, you are less likely to spend a hefty amount on rehabilitation costs. Furthermore, you would also need a shorter preparation time since the house is already in good shape.
You can find luxury properties in high-end communities.
Properties in bankrupt communities and run-down neighborhoods do not make a good investment, so you should stray away from them. You can typically find luxury homes and condominiums in the more comfortable areas of town. These communities are more attractive and are more financially secure. Thus, you can assure that you are making your transactions in the safer communities in the state.
Luxury homes have a higher aesthetic appeal.
Luxury properties are major eye candy. They give off an elegant and sophisticated feel which attracts potential buyers. Luxury homes often come with enticing features such as hardwood floors, gorgeous exteriors, and backyard pools that make them appealing.
Moreover, the media and magazines often pick up luxury homes and give them ample exposure, which widens their reach. The beauty of luxury homes makes them faster to flip and easier to sell.
Luxury homes perform better on the real estate market.
The real estate market is volatile, meaning unpredictable and sudden price movements often happen in the industry. The market can become unstable over periods, causing a majority of the homes to be affected.
Luxury homes are the least affected properties by this volatility. They are the last properties to suffer due to foreclosures and defaults in payment. Moreover, they are also the ones first to experience value appreciation when the market situation starts improving.
Luxury homes have less competition.
As mentioned, several investors focus on low-end and mid-range properties. They rarely flip luxury properties since doing so is much riskier and challenging. Thus, you would have less competition if you focus on luxury homes. Having less competition gives you an excellent edge since you can easily stand out and come on top of the market. Flipping luxury homes is a high-risk, high-reward situation that you can easily use to your advantage.
Are you on the hunt for luxury homes in the South Pasadena and Sunland/Tujunga communities? You are in luck, for we offer the highest level of integrity, expertise, and service in Pasadena real estate. Contact us today, and we would gladly bring you the luxury home of your dreams.