The Impact of Luxury Real Estate on Cost of Living Explained

The down side to living in a big city is its steep prices for real estate. Dubai, London, New York, Hong Kong, Singapore and Mumbai are some of the world’s busiest cities and commercial hubs in their regions. The outstanding connectivity in commerce makes these cities the most desirable in the world to dwell in. Add to that, the emerging real estate hubs in Central America, Europe and other parts around the globe. When spoilt for choices, how does an investor decide which real estate to choose from?

Residential real estate investors are of different kinds – the ones who use the property for themselves, home owners; the ones who invest to let out, passive income earners and lastly using the property for commercial purposes such as serviced homes for corporate guests or extended home stay.

Whatever the type of investor they may be, it is important to understand the behavior of the person residing in the property. Ultimately, it’s the choices they make is what generates financial advantage to the home owner (who can also be the end user). Here are some frequently asked questions about choosing a home.

What is it that makes a person choose a particular house as their home?

• Neighborhood, location, amenities, school, hospitals, restaurants and shopping areas.

How is this an advantage?

• Neighborhood: A well maintained community will ensure your area is clean and desirable.
• Location: Quick access to public transport and amenities keeps you stress-free.
• Amenities: Recreation, playgrounds, gym, swimming pool in the area means easy to access them
• School: Young children need constant attention and proximity to home is the key to their safety.
• Hospitals: Terminal illnesses and emergencies need healthcare round the clock, closer to home.
• Restaurants: Fast food joints, Fine dining are great for a take-out or occasional dining in.
• Shopping areas: Groceries, vegetables, fruits and other common supplies need to be handy

Do more amenities mean higher costs?

• There is a certain cost to bear when living in an all-inclusive community. There will be property cost, maintenance costs and a premium for the location. However, one cannot discount the fact that such conveniences come at a price. When infrastructure is created by a larger player such as a developer or the government, the economies of scale work better than individual investments to recreate the same. Regular maintenance means you have outsourced the additional responsibility to building management, on a bigger scale. You will not be 100% free from maintenance issues though.

What other advantages are there if you invest in an expensive property?

• Expensive property by itself is not advantageous if you purchased an over-priced villa or apartment. You need to consider the resale value as well. Buying the right sized home is a good investment strategy. A small or medium sized home is easily sellable even in a down market. Large properties on huge plot sizes work well only if you intend to use it as your prime residence or lease it out for commercial activities such as film shooting, leasing out to high networth individuals or corporates to conduct in-house events. However if the house was expensive because of its location and beauty of its surroundings you are in for a treat!

For example, Downtown Dubai is a glamorous area especially in the night when the city lights up and the waterfront properties and fountains add to the aura! Walking here is like being on a permanent vacation. You can take plenty of pictures and the setting is unlike any other place in the world. The tall buildings with unique architecture makes you wonder every time you see them. Beachfront properties are even more alluring as the sands and shores invite you for watersports of every kind. With so many amenities and scenic beauties, travelling costs can be reduced significantly, especially during your busy schedule.

 If you are smart about it, even a shoe-string budget will make your life a beautiful when living in a city with outstanding infrastructure.