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Investment Opportunities in Luxury Real Estate

It’s no secret that the luxury real estate market is a dynamic one—and the most successful real estate professionals are the ones who are prepared to adapt to changes as they occur.

Currently, the market is seeing an influx of high-net-worth individuals who are looking for prudent investment opportunities in luxury real estate. Specifically, affluent consumers are turning to real estate to diversify their portfolios as a long-term investment strategy.

As a real estate professional, you’ll want to make sure you’re prepared to best serve this buyer segment so you can make more sales and grow your sphere of influence in this competitive market.

Reasons People Are Investing in Luxury Real Estate

So, why exactly are high-net-worth individuals looking to buy luxury real estate? According to a Coldwell Banker Real Estate report released in October of 2022, the top reasons for investing in the luxury market include:

  • Diversifying portfolios (46.7%)
  • Long-term investment (46.1%)
  • Financial gain from rental income (45.9%)
  • Inheritance for children (45.3%)

It’s also worth noting that of the participants in this survey, 77% of consumers reported that they currently owned an investment property—and nearly 66% owned two or more properties. For luxury real estate professionals, this means that the opportunity to make a sale is greater than ever.

What Types of Properties Are Buyers Looking For?

There are several types of luxury properties that these affluent buyers tend to be looking for. These include:

  • Multi-family homes – properties that include multiple living units, typically with their own separate entrances. These are ideal for renting out as vacation properties because each unit can bring in its own revenue stream.
  • Single-family homes – properties that are designed as single-dwelling units. These properties are usually stand-alone detached, and can be a great option for those looking to bring in rental income or pass on a property to a beneficiary down the road.
  • Apartments and condominiums – large properties with multiple units, often governed by an HOA or a similar board. These make for excellent investment properties because they tend to come with some included maintenance, such as landscaping and exterior repairs.
  • Townhomes and duplexes – single-family homes that share at least one wall with another home. These properties are often at least two floors and tend to have their own entrances.

By having a solid understanding of the…

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By: the Institute


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