Holly Welles

How to Budget for Luxury Property Upgrades
by Holly Welles

Investing in real estate is always a little risky. If the market has a sudden downturn or something changes in the neighborhood, you could have trouble leasing units and wind up losing money. However, adding luxury properties to your existing investment portfolio gives you a rental option that isn't as dependent on the current economy or shifts in the local housing market. 

Like any market, luxury investments have their ups and downs. But careful planning and some market savvy can go a long way in protecting your investments. Here are some ideas for investing in a luxury property without risking your financial health.

1. Choose the Amenities That Matter Most

Spend time touring other multi-unit luxury buildings in your area and then put your own unique design twist on your upgrades. If you're on a tighter budget, you may want to go with finishes that look similar to the European style — wide-plank floors and sleek appliances — but are more local and therefore cheaper to import and install. 

When upgrading units, it’s important to carefully choose the luxury touches that make the most impact. Focus on the kitchen and bathrooms to create a high-end look. It’s here that flooring, lighting and other features will capture the attention of potential renters.

2. Become Pet-Friendly

People adore their pets, and offering pet-friendly features can take your luxury offerings from so-so to in-demand. It’s more common now to see deluxe dog walking areas within an apartment building. You might even find pet washing stations in a common area. 

Not only can you think about adding a pet fee or deposit to manage risk, but you can make design choices that protect your property from damage. Floors that are durable and easy to clean, for example, are attractive to pet owners and guard your investment. 

3. Focus on the Neighborhood

The trend of millennials and others migrating to urban centers is still underway. If you’re looking for a property to buy and revamp into luxury accommodations, look for older buildings near the city center that can be upgraded for a fraction of the price of building new. 

Pay attention to how close to transportation lines the building is located and if it is within walking distance of restaurants and nightlife. Experts suggest that the millennial generation increasingly place value on the 10-minute bubble, meaning they can access many of their needs within ten minutes of their apartment complex. How can you market the neighborhood to potential tenants?

4. Create Common Areas

Another feature people look for in luxury living is common areas where they can interact with their neighbors. Consider incorporating community space into your building, such as a lounge where event programming can take place. To add utility, you could even add in printing, package collection and other services that create value for busy professionals.

Also, consider a rooftop garden, fitness center and laundry amenities for your tenants. While you may not have the time or budget to implement all of these ideas, an increased focus on common spaces can help you provide more value where it counts.

5. Incorporate Smart Technology

Adding smart features to your units doesn't have to cost a lot of money, but it adds an element of technical savvy that's attractive to high-end buyers. Invest in the best wireless Internet you can find - fiber optic is fastest and then install smart features in your apartments, such as smart thermostats and lights.You can even offer a free smart system with leases and set it up for new residents.

Some security systems now tap into the Internet of Things (IoT) as well and make a nice addition that adds another level of protection to residents. For busy professionals working late hours and living alone, security features add peace of mind. 

Budgeting for Luxury Property Upgrades

Set your budget for the upgrades that make the most sense for your building and location and shop for the best rates. Since you're outfitting a larger building, you may be able to negotiate on the cost of flooring, countertops and other features if you keep the design the same throughout the building. 

You can create a luxury apartment complex while still remaining profitable if you put the time and effort needed into researching the trends people most want and finding the best prices on quality materials. 

Holly Welles
Holly Welles is a freelance real estate writer & blogger covering property management, investment and market trends. She's the editor of The Estate Update, a residential real estate blog for renters and homeowners alike.

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