What’s the difference between somebody making good money and prosperity? Sure is it having money change hands. A Fortune 1000 CEO will make millions. A millionaire will score a fat quarter. A nation’s greatest athlete will win the world champions. But what is the difference between these individuals and the average Joe? In real estate, it’s the quality of the land. Why are some people rich and some poor?
Land is where it’s at. Real estate has always been the safest route to riches for the big companies because once you buy a home and then a piece of land it is fairly safe for either a corporation or a small business owner. The corporation or business is the long term holder of the property and the land is only a piece of land today and sometimes will be between the corporation and the house.
Luxury real estate is the investment that many people find when contemplating the purchase of a second home, retirement property, or even a life estate. A sure investment, but you have to stay clear of the pitfalls associated.
First you must ask yourself did I buy a home only for personal enjoyment or rental? Did the house spin out of control? Don’t buy a home that is financially out of your ability to pay off because you wont be able to ever sell the house for enough to pay off the mortgage. Not look for your dream home, but stay within the area you will most like to live in. If you purchase a large home you will be able to rent it out in the future if you chose the right type of home in a private community.
What did you pay for it and why? Only look at homes that are within your means to pay for the mortgage. If you fall in love with the house and feel you will stay there a very long time, go ahead, but I think it is best to control the home early. You want to be the new owner and be able to take out the home mortgage as soon as you can afford. If you find that the home is too expensive for you, you can always put it up for sale and make a nice profit on the home.
Don’t buy a home that will require you to constantly be busy in order to take out the mortgage. I know many people that buy homes that really do not have any use for the space. Now we are talking about luxury homes here, but the idea here is only look at the benefits those homes bring you. So we are not going to go over home appliances, which everyone has, but we are going to go over the pure price of the home. You may have all the space in the world but if it is all you will ever be able to afford you won’t be happy with it. If you fall into this category you will need to take a look at short sales and foreclosures, as selling a home ahead of the mortgage and any repairs you will have to make is a great way to make some money. The worst feeling in the world is to have to move your family because you cannot afford to pay for a home that is too expensive, yet you fall in love with it. It is better have to arise from situations like this, than delay them seeing all of the potential that a great home has to offer.
As I said earlier though, the most successful in this line of business have multiple streams of income working for them. It is often all that little extras you will be able to take out of the home that will make the difference with your bottom line.
Take a look around your neighborhood and see what other homes are selling for their actual value. If you find a home that is priced very high, chances are it is over priced. You should also know that you are in the home of your dreams. The lawn is green and mowed and you have the big back yard you always wanted that is in the perfect location, but the price is just out of reach, and that is where you will start to run into potential problems.
The best way to keep yourself safe and secure in purchasing luxury real estate is to be certain that you have multiple streams of income.