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Why Luxury Homes are Such a Great Investment

April 7, 2015 By Mark Hunke

Home InvestmentWe live in a society where many people live above their means, putting themselves in debt that becomes damaging to them in the long run. Knowing that, many people often choose to err on the side of frugality, avoiding a major purchase if they don’t absolutely need it. This is a very good strategy in many cases, but one that might be worth breaking when it comes to luxury real estate. A luxury home is more than just a purchase – it’s an investment.

Homes are Long-Term

Of all the different investments you might have, nothing has the long-term staying power like a luxury home. Cars come and go, student loans get paid off, and most possessions wear down over time. Real estate, especially residential homes, do not have this problem. The property you buy will probably be standing decades or generations from now. In addition, the house doesn’t become worthless if it suffers damage or needs an upgrade. Instead, anything you do to the property increases the amount of equity in the home, which means that you get a bigger return on your investment down the road. Houses are lifetime investments, so going slightly out of your price range isn’t necessarily a bad long-term move.

Property Values Usually Increase Over Time

When you buy a home at a high value now, you can expect to get a huge return on your investment later on. Even if you don’t make many major changes to the home, the simple process of maintaining your property is usually enough to increase the house site value over the course of several years. If you are planning to sell in the future, you can keep an eye on market trends and make sure you unload the home when the demand of luxury properties is at its highest. Even if you don’t plan to sell the home later on, having a luxury home increases your overall assets, which can be a huge benefit for your credit score and can help you get future luxury purchases as you get more liquid assets.

It’s Easier to Grow into a Home than out of one

This is especially true if you are young and have a growing family. As you settle into a luxury home, it’s easier for you to expand your living habits to meet a larger space than it would be to make due with a cramped home that doesn’t fit all of your diverse needs. There’s no reason you necessarily need a spacious mansion, but luxury homes offer enough room to make sure everybody has a bedroom with space left over for day to day comforts like an office, exercise room, or play room for the kids. When deciding your needs, remember to think about how your hobbies might expand in the future and make sure your home has enough room to fit those needs.

You should definitely keep your budget in mind when shopping for luxury homes. However, if the home you want is just out of your reach, give some serious thought as to whether it’s worth going a little above your price range in exchange for a long-term investment.

Filed Under: Real Estate

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