Home property renovation is always a tricky business. Things get even trickier in the luxury residential market. Renovating to sell a luxury property is not a typical fix and flip. Luxury buyers don’t have the time to design their home’s details, but they still want the quality touches standard in a high-end home. In this scenario, renovators have to look at luxury property renovation in a different light to attract the buyers in this niche market.
What luxury buyers want
A high-end home delivers a superior quality of life for the buyer. For most properties, a clean, fresh design that provides a blank slate for the luxury buyer to put their unique stamp works best. Of course, buyers will want the high-end appliances typical of a luxury property in their kitchen and bathrooms.
It can be tempting for a renovator to go overboard and install expensive touches like floor-to-ceiling marble in a master bathroom. Just because they are a high-end buyer, doesn’t always mean they are willing to pay a high-end price tag. Luxury buyers want top quality at an affordable price. The more spent on a renovation, the more a renovator stands to lose.
Home location and the comps
When selecting a luxury home renovation, location is key. Carefully consider the comps and determine if other properties in the neighborhood are being remodeled. Avoid upgrading with home to price it significantly higher than others in the neighborhood. This could hurt the home’s ability to selland cause it to remain on the market for much longer than expected.
Tailored Decision Making
With a luxury property, the buyer pool is smaller. However, this does not mean you are marketing to all buyers in the luxury market. Think about what kind of buyer is most likely to purchase the home and tailor the renovation accordingly. Is the home located in an upscale family neighborhood? The buyer might want multiple bedrooms, a pool, and a backyard for entertaining their children. Perhaps the property is a luxury penthouse condo close to a major thoroughfare in proximity to an International Airport. The ideal buyer may be a busy jet-setting professional who wants a home that is sleek, clean, and easy to maintain.
Luxury homes are starting to linger longer on the market as more properties come online. Time is always of the essence in a fix and flip scenario, it’s increasingly competitive for high-end homes. Now luxury buyers can shop around for the features they want. Can you afford to wait 150, 200, or more days to close a contract?
The right financing is key to securing, renovating and floating a luxury property renovation. Be smart about balancing upgrades with the budget to avoid the property waiting unnecessarily on the market. No renovator wants to make price cut after price cut. In Los Angeles, luxury homes that didn’t sell within the first 180 days, averaged 708 days on market. A bridge loan can be the right solution to funding a luxury property renovation.