Purchasing and renting luxury goods creates strong positive emotions in people from all walks of life. It can boost self-esteem and offer feelings of authenticity and contentment.
That's why luxury homes are such a good investment. You'll find renters looking to improve their image and their quality of life with nice living spaces.
Read on to learn why you should expand your real estate investment portfolio with high-end properties and how you can start buying them.
Why Invest in Luxury Homes?
Luxury homes don't just keep you competitive enough to guarantee rental. They serve as a great hedge against inflation because of their tangible nature.
Luxury homes are intrinsically valuable for their features and amenities. They'll always be lucrative as long as you keep them in good shape. No banking institution or political turmoil can decrease their value.
This makes them a great risk management opportunity, so they're ideal for portfolio diversification.
Luxury homes also let you charge a higher rental rate than lower-end alternatives. The average New Orleans investor can expect a 25% cash-on-cash return for a studio apartment, but this becomes even higher with luxury properties.
This is partly because you can divide them up and rent them to multiple people. However, even if you don't want to do that, landlords can reasonably charge rent based on the property value of their investment.
Between 0.8% and 1.1% of the overall home value is the standard. When your home is worth $1 million - a low figure for high-end properties - renting to a single family can bring in $10,000 worth of rent on its own.
Finding New Orleans Luxury Investment Opportunities
New Orleans estates can be hard to identify on your own. You would need to use expensive high-end tools and resources to analyze the market and find competitive investment opportunities. This can take a long time and leaves a lot of room for error since you'll have thousands of properties to look at.
Condition, location, size, and amenities will alter the cost of purchase and rent you can charge. No two investments are equal.
Luckily, a quality property management company has the knowledge and tools needed to accurately assess investments. You'll be able to quickly identify opportunities and snap up great homes to rent out.
Maximizing Your Luxury Real Estate Returns
Hiring a Louisiana property manager also maximizes returns after identifying investments that can meet your goals. They do this by:
- Constantly researching market trends
- Setting fair rental rates that increase your passive income
- Drafting up and negotiating leases
- Keeping tenants happy with timely maintenance
- Providing pre-vetted maintenance and cleaning services
- Helping you diversify and meet new goals
This would be challenging to do independently since you're unlikely to have the extensive knowledge and tools needed.
Manage New Orleans Estates the Right Way
While real estate is always a great long-term investment, choosing luxury homes can generate higher returns over time. Now that you know some benefits of buying elegant homes in New Orleans, Louisiana, it's time to begin looking into high-end properties for sale.
Our team is committed to assessing the local real estate market and finding luxury homes that fit your budget and goals. Contact PMI to discuss your objectives as a landlord and get a free rental analysis to project how much money you can make off your portfolio.
