Purchasing real estate has long been considered a wise and secure investment. And with the wealth of the world’s richest growing and a boom in demand for high-end housing, the luxury sector has become increasingly attractive. However, compared to real estate in general, luxury comes with a distinct set of requirements.
Whether it’s securing the right type of mortgage that will allow you to purchase a high-end property or defining what luxury actually is, it’s important to bear some tips in mind before making any purchase:
1. Secure a mortgage designed for luxury
Before you invest in a high-end property, you must first figure out how much luxury you can actually afford in order to secure the right type of mortgage. Talk to your financial advisor and an experienced mortgage broker before making a decision. Based on this, you can start looking for a home in your price range. One of the most common ways to buy a high-end property is with a jumbo mortgage. While a jumbo mortgage will allow you to exceed conforming loan limits, it also comes with unique requirements: A higher down payment, having an excellent credit history, and a specific income level. Before you dive in, make sure you take a well-informed approach and set realistic expectations.
2. Size up the market
Another very important step in your due diligence process is to carefully analyze the market where you’re investing. Good location is important, but there are plenty of other factors, such as the cost of living, the sales value of comparable properties, the job market, and the median household income in the area that are crucial to your investment’s success. For instance, boasting one of the highest median incomes in the country and a more than double increase in luxury home sales this past year, the Ottawa luxury real estate market is becoming more and more attractive for homebuyers and investors alike.
3. Find a premium location
Location is one of the main factors that add value to a luxury home. Most high-end buyers are looking to be close to high-end activities, such as exquisite shopping, fine dining, and quality entertainment while still living in a secure, desirable location with convenient access to transportation, good schools, and amazing views. Luckily, there’s no shortage of high-end properties in Canada, whether you’re looking for a home in the heart of the city or in a luxurious ski resort with stunning views of the nearby mountains.
4. Find a local real estate agent specialized in luxury
Look for a real estate agent with experience in the local high-end market. A good agent should be able to provide all the data on the homes that you want to see, location quality, and the value of a property. Determining the price of luxury properties can be difficult, but with the help of a luxury real estate agent, you will be able to make the best deal. An experienced agent will also be able to identify any problems that you might not notice, saving you the trouble of having to fix them after such a big purchase.
5. Set the bar high with luxury amenities
Luxury is a lifestyle, and amenities such as swimming pools, top-quality custom finishes, fitness centres or hotel-like services will distinguish your property from the rest. For example, if you’re looking to buy a condo, either for yourself or for rental income, make sure it’s located in a luxurious building that offers an array of premium amenities. The same goes if you’re looking to buy a vacation property. Top-notch facilities will ensure your investment pays off.
If you’re ready to dive into the luxury market, here’s a study by Point2 Homes that’ll give you an overview of the concentration of luxury properties in Canada’s 50 largest cities: