Investment StrategiesHow to Make Money by Investing in Luxury Properties by Ahmad Shukri May 23, 2018May 15, 2018 by Ahmad Shukri May 23, 2018May 15, 2018The real estate industry is built on the need of individuals to call something their own. Real estate investors are constantly looking for lucrative opportunities to invest in. At some point in their career, most real estate investors would own at least one rental property, whether commercial or residential. The huge misconception about investing in rental properties comes from associating owning such properties with wealth. That’s not the case in most scenarios as most successful real estate investors are looking to be investing in luxury properties.Investing in luxury properties has become more popular as the demand for such properties increased. Like other types of property, it is a safe investment and a great addition to your investment portfolio.Related: Investing in Luxury Properties: Does it Make Sense?What defines luxury properties?At a certain point in time, luxury properties were connected to the zip code they were located in. That’s not the case anymore, as wealthy individuals are expanding out of such zip codes to find new areas that best fit their personal preferences. When trying to define luxury properties, you must keep in mind four factors: location, value, size, and design. As real estate investments, a real estate investor who’s considering investing in luxury properties must factor in all the above to come up with the magical formula that makes luxury properties as enticing and appealing as advertised.Among other investment strategies, investing in luxury properties can be very rewarding for the real estate investor when done right. To help property investors recognize luxury properties, these are the factors that differentiate them from other property types:Location: Investing in luxury properties doesn’t require a certain location for it to be successful. It can be the downtown of a metropolitan city or in a secluded, forested area or even a beach property. A question any real estate investor must ask him/herself is, “Do people yearn or desire to live in such an area?” If the answer is yes, then you have the right location for a luxury property.Price and Value: The value and price of such investment properties are higher than other real estate properties. This can be directly connected to the location and size of the property. A real estate investor must be aware that a highly-priced property is going to generate a high rental income in return.Related: 7 Ways to Find an Investment Property for Maximum ReturnsSize: If you’re considering investing in luxury properties, square footage can affect the price of the property and, most importantly, the ambiance of it. The bigger the property, the more amenities it will have. This can be important as size affects fitting a pool in the property, for example, and ensures that it has amenities most people won’t have in their homes.Design: The design of a luxury property is very important. Nowadays, many luxury properties have modern architecture exteriors and high-end finishing to create expensive looks that inspire comfort. A real estate investor must make sure that the finishing is done with the crème de la crème of materials.Ways to make money through luxury rentals:Luxury properties as vacation home rentalsKnowing how to make money in real estate through luxury properties can be tricky. A real estate investor must know where to invest in real estate and determine how the property will generate an income. A profitable way to use luxury real estate is vacation rentals. Having a beautifully designed property in a popular vacation destination can generate a high rental income. Consider learning about the nature of luxury rentals and how to best advertise your property properly before buying an investment property; this can help you as a real estate investor in coming up with the best rental strategy for your property.Listing such rental properties on websites like Airbnb or HomeAway can be a great way to keep the occupancy of your property at high levels. Most successful real estate investors who are investing in luxury properties use them as vacation rentals especially in locations that have warm winters.Related: Vacation Home Rentals: All You Need to Know as a Real Estate Investor.Long-term rentalsInvesting in luxury properties can be a liability to the real estate investor if not occupied enough to generate a substantial income. Making money in real estate through luxury properties doesn’t have to be done in a specific way. You can tailor an investment plan and customize a rental strategy to go with it.For investors looking for ease of mind generated by stable monthly or yearly income, using luxury properties as long-term rentals can be appealing. The ideal tenant for such properties would be a high-income individual that can take good care of a larger space. It is true that the real estate investor might miss out on profit by the end of the year, but the assured income makes this approach a suitable option.Multi-purpose venueBeing able to do creative real estate investing is a must for all individuals in the field. Luxury properties come in all shapes and sizes and what might work for one property might not work for another. This method of generating an income through luxury properties is unconventional but effective. A substantial undiscovered market is investing in luxury properties as private event space and wedding venues. This can generate a substantial income for the real estate investor and can even offer more personalized services for an extra charge.Is investing in luxury properties the right move for you?Investing in luxury properties has proven to be a lucrative money-making machine for some real estate investors. Using such investment properties as vacation home rentals can have great benefits but add running costs such as utilities, daily cleaning, gardening and general maintenance. A real estate investor must decide whether to rent his/her property as a long-term rental or a short-term rental. The most important thing to keep in mind before investing in luxury properties is utilizing the space for maximum gains and exploiting features of such rental properties to their best use.To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here. Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Ahmad ShukriAhmad is Content Writer at Mashvisor with a degree in marketing. He enjoys writing about everything related to real estate and especially the top markets for investment properties. 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