More than just a lifestyle project, luxury real estate provides a means for people to live out their passions.
A common thread across the globe among the wealthy is their increasing emphasis on investing in luxury properties through passion investing, as per the Barnes International Realty report.
What is passion investing? Investments are not just about stocks, bonds, etc. Apart from such traditional options, an increasing number of people are investing in non-traditional assets such as luxury properties, art, fine wines, vintage cars, etc.
PASSION AND MONEY
These investments are items that people are passionate about and cherish. Investing in such assets will also help them make money at the same time, as the value of these items appreciates over time. Investing in assets like luxury properties that one is passionate about is termed passion investing. Passion investing is an ideal way to create long-term investment strategies that could be rewarding for the investor.
WHY INVEST IN LUXURY PROPERTIES?
In addition to long-term capital gains, successful people look to make a statement through their residences. So much so, that such residences become a landmark in their cities (think Antilia). For the swish set, a home is an experience that must be lived every day. It is the space that fills one with passion, vigour, and a new zeal each morning.
Time management is the key, and successful people do so by managing their activities and businesses remotely from their smartphones or tablets while spending time with their families and partaking in leisure activities right in their luxurious properties.
PLENTY OF INVESTING OPPORTUNITIES
Luxurious properties acrossthespectrumalsooffer ample opportunity for passion investments, beitproperties with a distinctive character, chalets, villas, estates, or hotels. You’ll find an increasing number of Indian entrepreneurs investing in hotels and villas across the country, or even abroad. They invest in a broad panel of luxury real estate opportunities and where possible, they transform these assets into revenue streams through the rental of residential assets and via their operation for more entrepreneurial projects.These properties, which can be more than one in number, serve as a showcase for their art collection, their wine cellar, or their vintage cars, while also being used as locations for their public relations events and operations.
OVERALL STRATEGY FOR PASSION INVESTING
For these investors, luxury real estate is not something static. Their investments are part of an overall entrepreneurial strategy that has enabled them to make their fortunes. For people who are constantly on the move, flexibility is vital, including in the luxury sector. In the eyes of these innate investors, the acquisition of luxury real estate has taken on a new character as a short medium or long-term investment.
Luxury real estate has emerged as one of the most viable options for passion investing for one more compelling reason, which is it can be difficult at times to predict the value of individual pieces of jewellery or art.
LACK OF LIQUIDITY
Luxury goods also suffer from a lack of liquidity, especially if the item in possession is not the flavour of the season. Investors will also incur substantial commission costs from outlets such as auction houses and will be prone to taxation. For art pieces, the value is in the brand, the artist, the history. Furthermore, branded goods such as luxury watches and jewellery lose much of their value the moment the buyer steps out of the shop.
No doubt, luxury real estate is also subject to market fluctuations, but if carefully chosen and given enough time to appreciate, their returns are usually handsome.
“Passion investing goes way beyond money and returns. All of us want to enjoy the finer things in life, and it’s an added advantage if the enjoyment gives financial returns as well. That’s what Luxury Real Estate does; it increases wealth and makes you a tad bit richer, says Yuvraj S Rajan, Director, Raiaskaran Group in CNBC TV18 Article “Passion or Investing” and The Free Press Journal article on “Passion investing is all about property and art”.