Property investors have recently turned toward one-million dollar plus homes to flip. Developing a luxury home is much different than fixing and flipping a traditional home simply because it is more expensive and takes a lot more time, considering many of these homes are much larger in scale. Let’s take a look at how to make the most of your luxury home renovation.
Luxury Homes are Marketed
When a luxury home goes on the market, you can expect for the home to be marketed widely. This is partly because people are willing to pay to market their million-dollar properties and also partly because luxury homes do not come on the market as frequently. This makes it a tad bit more difficult as there may be more competition to purchase the home to fix and flip it simply because they are exposed to a greater audience and the inventory is lower. Traditional homes that are foreclosed on may not be marketed as prominently which is why they are usually easier to purchase.
Highly Consider the Neighborhood
With high-end luxury homes, you can expect high-end communities. Safety and being within a gated community with high security is important to consider when buying and flipping a luxury home. If you are planning to spend hundreds of thousands on a home flip, the last thing you want is for the home to be broken into or to end up losing out on potential revenue because people aren’t willing to pay top dollar for a home that is not within a gated community.
Luxury Rehabs Take Less Work
Sometimes with traditional flips, you will have to fix major structural damages because the quality of the original materials used was subpar. With luxury homes, the renovations are often less cumbersome because these homes were originally built using high-quality materials. However, if these quality materials were damaged and need to be replaced, you can expect to pay a high expense to replace or fix these items.
Think About Property Values Within the Neighborhood
When you are searching for a luxury home to rehab, you want to consider what it will take to build to the property values in the neighborhood. If you do too much and go overboard with the renovation, you may not be able to sell the home at the price to make a profit. No buyer is going to be willing to pay hundreds of thousands of dollars over the next highest price home just because you have flipped it.
You Can Make a Higher Profit
One of the most positive things about flipping luxury homes is that you have the potential to make a very high profit – more than you can flipping homes in an average price range. Keep in mind that you will also spend more in the renovation process. It is pretty common to spend over $100,000 on a million-dollar home flip, but when you sell the home for $1.5 million+, you can turn a decent profit.